Tracking STI ETF Performance is part and parcel of a value investor. We all know that STI ETF still plays an essential part in our value investing portfolio. As mentioned in my earlier post, owning a part of your stock portfolio in STI ETF will be good for longer term investments. Moreover, the top 30 SGX stocks forming the constituents of STI will also give us a quick glance of the local stock market performance.
STI ETF Performance in comparison with regional index in 2017
STI maintains one of the region’s highest dividend yields, with 2017 year-to-date distributions boosting the STI’s total return to over 14%. Reflecting the domestic economy’s robust performance and brighter outlook, Singapore’s benchmark Straits Times Index (STI) has chalked up a total return of 14.1% in the 2017 year-to-date, outperforming Taiwan’s 12.5%, Hong Kong’s 12.1%, Malaysia’s 9.9%, Indonesia’s 6.5% and Japan’s 4.4%. In fact, Singapore GDP is forecasted by our MTI to grow over 2% in 2017 due to strong growth in manufacturing and electronic sectors. This is really good news for existing STI ETF investors.
What about our various STI ETF performance so far?
List of SGX Stocks To Track For STI ETF Performance
It is quite obvious to see that most of the STI stocks are performing well in 2017 with Yang Ji Jiang Shipping Holding being the top performer. Global logistic Properties (GLP) is the second top STI stock performer. And I personally have invested this hidden champion substantially way before the announcment of the confirmed largest buyout of GLP in the entire SGX history.
You can also see some of the legendary darling stocks like Wilmar and Golden Agriculture are negative in growth. This could be due to the poor commodity market demand. Stocks like SPH, and Comfort Delgro were also not performing well due to technology disruption and consumer trend. These corporate giants must react to the market fast to avoid being ousted by the market.
|Name||SGX Code||Date||Confirmed/ Estimated||Period||Price $||Price Change YTD %|
|Singapore Press Hldgs||T39||7/14/2017||Confirmed||Q3 17||2.980||-15.6|
|CapitaLand Commercial Trust||C61U||7/19/2017||Confirmed||Q2 17||1.750||18.2|
|Hutchison Port Hldgs Trust||NS8U||7/19/2017||Confirmed||Q2 17||0.450||3.4|
|Keppel Corp||BN4||7/20/2017||Confirmed||Q2 17||6.580||13.6|
|CapitaLand Mall Trust||C38U||7/21/2017||Confirmed||Q2 17||2.030||7.7|
|SIA Engineering Co||S59||7/25/2017||Confirmed||Q1 18||4.060||20.5|
|Oversea-Chinese Banking Corp||O39||7/27/2017||Confirmed||Q2 17||11.090||24.3|
|Singapore Airlines||C6L||7/27/2017||Confirmed||Q1 18||10.260||6.1|
|Ascendas REIT||A17U||7/27/2017||Confirmed||Q1 18||2.680||18.1|
|Singapore Exchange||S68||7/27/2017||Confirmed||Y 17||7.510||4.9|
|United Overseas Bank||U11||7/28/2017||Confirmed||Q2 17||23.980||17.5|
|Jardine Cycle & Carriage||C07||7/28/2017||Estimated||Q2 17||41.860||1.5|
|Hongkong Land Hldgs||H78||8/3/2017||Confirmed||S1 17||7.600||20.1|
|Sembcorp Industries||U96||8/3/2017||Confirmed||Q2 17||3.290||15.4|
|Genting Singapore PLC||G13||8/3/2017||Confirmed||Q2 17||1.125||24.3|
|DBS Group Hldgs||D05||8/4/2017||Confirmed||Q2 17||21.480||23.9|
|Yangzijiang Shipbuilding Hldgs||BS6||8/4/2017||Estimated||Q2 17||1.345||65.0|
|Jardine Matheson Hldgs||J36||8/4/2017||Confirmed||S1 17||63.670||15.2|
|UOL Group||U14||8/4/2017||Confirmed||Q2 17||7.920||32.2|
|Global Logistic Properties||MC0||8/8/2017||Confirmed||Q1 18||3.320||50.9|
|Wilmar International||F34||8/10/2017||Confirmed||Q2 17||3.370||-6.1|
|City Developments||C09||8/11/2017||Confirmed||Q2 17||11.050||33.5|
|Singapore Telecommunications||Z74||8/11/2017||Estimated||Q1 18||3.910||7.1|
|ComfortDelGro Corp||C52||8/11/2017||Estimated||Q2 17||2.290||-7.3|
|Golden Agri-Resources||E5H||8/11/2017||Estimated||Q2 17||0.385||-10.5|
|Singapore Technologies Engineering||S63||8/11/2017||Estimated||Q2 17||3.770||16.7|
|Thai Beverage PCL||Y92||8/11/2017||Estimated||Q3 17||0.930||9.4|
Source: SGX StockFacts & Bloomberg (data as of 21 July 2017).
Note prices and price changes are in USD for Hutchison Port Hldgs Trust, Hongkong Land Hldgs and Jardine Matheson Hldgs.
Should you invest STI ETF now if you have not done so?
My personal preference is to go for lump sum investments at one time. This is because I can buy undervalued stocks at a much cheaper price and yet with a higher margin of safety. I can also enjoy greater capital appreciation on top of the recurring annual dividends. If you had invested in STI ETF 5-10 years ago, you can expect reasonably good profits and returns now.
Below is the Nikko AM STI ETF performance chart, the current higher index level may be quite challenging for growth. Although Singapore GDP forecast adjusted slightly higher to 2.7% in 2017, we can see that the current market is a flat market. It may likely to drop very fast if the market get panic over some bad news.
Another aspect of STI ETF investment is to consider the yield after the deduction of sales charge and its usual fund expenses. The risk will be higher when the market is weaker.
Perhaps, we can look out other ETFs to invest by looking at their current PE Ratio and growth potentials. iShare China Large Cap ETF, i.e. FX can be one of the good choices as per pointed out by our value investing masters in our value investing community. This ETF is formed by top performing China stocks and you can expect at least some positive growth due to strong China market potentials. The battle ground is not always necessarily to be in Singapore. We can certainly look far beyond it.
Of course, i am not saying that investing STI ETF is bad for now. The other school of thought is to invest such STI ETF through regular saving plans with their bank. This is good with the objective of doing dollar cost averaging to generate STI ETF returns over a period of say 5-10 years or beyond. Historical STI ETF performance will show us that the result is positive over time.
Investing in ETF is one of our key topics for the continual learning of our value investing graduates. Attend our free seminar to know how you can join the largest value investing community in Singapore to kick start your own value investing journey.