In this new series, we demystify investing terms for beginners.
Previously, we looked at what an ETF is. Now, let’s find out more about the Straits Times Index (STI).
So, what exactly is the STI about?
The STI, which has a history going back to 1966, consists of the 30 largest and most liquid companies listed in Singapore. By “liquid”, it means that they must have a certain volume of trading activity in the stock market.
The top 10 constituents of the STI take up around 69% of the index. Those 10 stocks are (data as of 29 November 2019):
| Constituent | Sector | Market capitalisation (S$' million) | Weight (%) |
|---|---|---|---|
| DBS Group Holdings | Banks | 45,392 | 15.56 |
| Oversea-Chinese Banking Corp (OCBC) | Banks | 36,350 | 12.46 |
| United Overseas Bank (UOB) | Banks | 33,132 | 11.36 |
| Singapore Telecommunications (Singtel) | Mobile Telecommunications | 25,118 | 8.61 |
| Jardine Matheson | General Industrials | 16,364 | 5.61 |
| Keppel Corporation | Oil Equipment Services & Distribution | 9,610 | 3.29 |
| CapitaLand | Real Estate Investment & Services | 9,175 | 3.14 |
| Ascendas Real Estate Investment Trust | Real Estate Investment Trusts | 8,731 | 2.99 |
| Thai Beverage | Beverages | 8,717 | 2.99 |
| Hongkong Land Holdings | Real Estate Investment & Services | 8,701 | 2.98 |
| Total | N/A | 201,289 | 68.99 |
In terms of performance, the STI has produced a total return (comprises capital gains and dividends) of 14.7% over the past five years.
The STI is reviewed regularly. If any of the index stocks become ineligible to continue being part of the STI, it would be replaced by those on the STI reserve list.
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