Most of us know we should invest to grow our savings, but few know exactly how to get started. If you've been diligently saving but wonder if there’s
Most of us know we should invest to grow our savings, but few know exactly how to get started. If you’ve been diligently saving but wonder if there’s more you could do with that cash, here’s a straightforward option: invest in ETFs, or exchange-traded funds.
Understanding ETFs in Singapore
For beginners, ETFs are investment funds that track a collection of stocks, bonds, or commodities. They’re designed to replicate the performance of a particular market index or asset group. This guide will walk you through some popular ETFs in Singapore, outlining each fund’s focus and its associated costs.
Top 10 ETFs to Consider in Singapore
Below are some well-known ETFs in Singapore, each offering different types of market exposure and risk levels. Here’s a summary of some popular choices:
ETF What It Tracks Expense Ratio
SPDR STI ETF Top 30 companies on SGX 0.30%
Lion-OCBC Securities Hang Seng Tech Top 30 tech companies on HKEX 0.45%
SPDR Gold Shares ETF Price of gold bullion 0.40%
iShares USD Asia High Yield Bond Index Asian high-yield bonds 0.50%
Nikko AM STI ETF Top 30 companies on SGX 0.30%
Lion Phillip S-REIT ETF High dividend Singapore REITs 0.50%
Each ETF brings distinct benefits and risk levels, from the stability of bond-focused ETFs to higher-growth options like tech and REITs.
ETFs vs Unit Trusts
ETFs are often more affordable and accessible than unit trusts, which are actively managed and typically charge higher fees. ETFs, by contrast, are passively managed, meaning they aim to mirror a specific index with lower management involvement and lower fees.
How to Start Investing in ETFs
Starting with ETFs is relatively simple. You only need investment funds and a brokerage account, with SAXO or POEMS being popular choices for their competitive fees. If you’d like an easy, beginner-friendly option, regular savings plans like DBS Invest-Saver or OCBC Blue Chip Investment Plan allow you to start with just $100 per month without a brokerage account.
Conclusion
ETFs offer a straightforward and cost-effective way to invest in diversified assets. They’re ideal for long-term investors seeking gradual growth with lower costs. As with all investments, be prepared for fluctuations, especially in the short term. With ETFs, it’s all about patience and a steady approach to building wealth.
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