Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

Asia High Yield Bond Index / Equity Bottom-Up

<ul>
<li>In a low yield environment, Fixed Income ETFs enable investors to diversify portfolios across a basket of bonds at a low cost.&nbsp; In the first five months of 2020, SGX’s five bond ETFs have drawn total net inflows of S$49.7M. Monthly turnover has also risen 13.1% YoY to S$22.5M. &nbsp;</li>
<li>In the 12M to 4 June, the five fixed income ETFs have averaged an annualised total return of 6.3%. Five SGX-listed fixed income ETFs have recorded 12M div yields between 2.0% and 6.2%, depending on the average rating of their underlying bonds over the past 12M. &nbsp;</li>
<li>ABF Singapore Bond Index Fund and Xtrackers II Singapore Government Bond UCITS ETF, which average a AAA credit rating, generated the highest annualised returns at 10.4% and 10.2% respectively.</li>
</ul>
Fixed income ETFs are listed funds designed to track the performance of a specific bond market index. The fixed income ETFs listed on SGX have a total fund size of nearly S$2 billion, and seek to replicate the returns of major bond market indices across Asia and Singapore. The five fixed income ETFs on SGX that offer investors portfolio diversification are: &nbsp;
<ul>
<li><a href="https://www.nikkoam.com.sg/files/documents/funds/fact_sheet/abf2_fs.pdf" target="_blank" rel="noopener">ABF Singapore Bond Index Fund</a></li>
<li><a href="https://etf.dws.com/en-sg/LU0378818560-singapore-government-bond-ucits-etf-1c-kv4/" target="_blank" rel="noopener">Xtrackers II Singapore Government Bond UCITS ETF</a></li>
<li><a href="https://www.nikkoam.com.sg/files/documents/funds/fact_sheet/sgd_ig_corp_bd_etf_fs.pdf" target="_blank" rel="noopener">Nikko AM SGD Investment Grade Corporate Bond ETF</a></li>
<li><a href="https://www.blackrock.com/sg/en/literature/fact-sheet/n6m-ishares-j-p-morgan-usd-asia-credit-bond-index-etf-fund-fact-sheet-en-sg.pdf" target="_blank" rel="noopener">iShares JP Morgan USD Asia Credit Bond Index ETF</a></li>
<li><a href="https://www.blackrock.com/sg/en/products/251722/ishares-barclays-usd-asia-high-yield-bond-index-etf" target="_blank" rel="noopener">iShares Barclays USD Asia High Yield Bond Index ETF</a></li>
</ul>
 Fixed income ETFs allow investors to diversify their portfolio across a basket of bonds at a low cost, offering additional investment choices in the current low-yield environment. SGX-listed fixed income ETFs have recorded 12-month dividend yield between 2.0% and 6.2%, depending on the underlying bond’s average credit rating, and options range from AAA-rated investment grade bonds to high yield bonds.
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2020-06/Capture_14.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">12M Dividend Yield</div>
In the YTD, the five bond ETFs have drawn total net inflows of S$49.7 million. Their monthly turnover has also risen 13.1% YoY to S$22.5 million.
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2020-06/Capture1.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">Monthly Turnover for Five fixed income ETFs</div>
In past 1Y, these five fixed income ETFs have averaged an annualised total return of 6.3%. ABF Singapore Bond Index Fund and Xtrackers II Singapore Government Bond UCITS ETF, which average a AAA credit rating, have generated the highest returns at 10.4% and 10.2% respectively. The average YTD, 3Y and 5Y annualised total returns for the five bond ETFs stand at 1.9%, 3.1% and 3.4% respectively.
<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2020-06/Capture2_0.PNG" class="editor-image img-responsive"></figure>
<div class="content-caption">YTD &amp; 1Y Annualised Total Returns for five fixed income ETFs</div>
The tables below detail the five fixed income ETFs listed on SGX, sorted by YTD total annualised returns. &nbsp;
<table class="table table-striped">
<tbody>
<tr>
<td>
Name
</td>
<td>
Stock Code
</td>
<td>
Trading Currency
</td>
<td>
YTD Total Annualised Return (%)
</td>
<td>
1Y Total Annualised Return (%)
</td>
<td>
3Y Total Annualised Return (%)
</td>
<td>
5Y Total Annualised Return (%)
</td>
<td>
12M Div Yld (%)
</td>
</tr>
<tr>
<td>
XTRACKERS II SINGAPORE GOVERNMENT BOND UCITS ETF^
</td>
<td>
KV4
</td>
<td>
SGD
</td>
<td>
6.3
</td>
<td>
10.2
</td>
<td>
4.4
</td>
<td>
4.1
</td>
<td>
NA
</td>
</tr>
<tr>
<td>
ABF SINGAPORE BOND INDEX FUND
</td>
<td>
A35
</td>
<td>
SGD
</td>
<td>
6.1
</td>
<td>
10.4
</td>
<td>
4.5
</td>
<td>
3.8
</td>
<td>
2.0
</td>
</tr>
<tr>
<td>
NIKKO AM SGD INVESTMENT GRADE CORPORATE BOND ETF
</td>
<td>
MBH
</td>
<td>
SGD
</td>
<td>
1.1
</td>
<td>
4.4
</td>
<td>
NA
</td>
<td>
NA
</td>
<td>
2.0
</td>
</tr>
<tr>
<td rowspan="2">
ISHARES J.P. MORGAN USD ASIA CREDIT BOND INDEX ETF
</td>
<td>
QL2
</td>
<td>
SGD
</td>
<td rowspan="2">
-0.7
</td>
<td rowspan="2">
5.0
</td>
<td rowspan="2">
4.1
</td>
<td rowspan="2">
4.6
</td>
<td rowspan="2">
3.8
</td>
</tr>
<tr>
<td>
N6M
</td>
<td>
USD
</td>
</tr>
<tr>
<td rowspan="2">
ISHARES BARCLAYS USD ASIA HIGH YIELD BOND INDEX ETF
</td>
<td>
QL3
</td>
<td>
SGD
</td>
<td rowspan="2">
-3.4
</td>
<td rowspan="2">
1.4
</td>
<td rowspan="2">
2.7
</td>
<td rowspan="2">
4.6
</td>
<td rowspan="2">
6.2
</td>
</tr>
<tr>
<td>
O9P
</td>
<td>
USD
</td>
</tr>
<tr>
<td>
Average
</td>
<td>
&nbsp;
</td>
<td>
&nbsp;
</td>
<td>
1.9
</td>
<td>
6.3
</td>
<td>
3.1
</td>
<td>
3.4
</td>
<td>
2.8
</td>
</tr>
</tbody>
</table>
<table class="table table-striped">
<tbody>
<tr>
<td>
Name
</td>
<td>
Stock Code
</td>
<td>
Trading Currency
</td>
<td>
Expense Ratio (%)
</td>
<td>
Fund Size (S$M)
</td>
<td>
YTD Net Inflow ($SM)
</td>
<td>
Underlying Index
</td>
</tr>
<tr>
<td>
XTRACKERS II SINGAPORE GOVERNMENT BOND UCITS ETF^
</td>
<td>
KV4
</td>
<td>
SGD
</td>
<td>
0.2
</td>
<td>
136.5
</td>
<td>
-4.3
</td>
<td>
FTSE Singapore Government Bond Index^
</td>
</tr>
<tr>
<td>
ABF SINGAPORE BOND INDEX FUND
</td>
<td>
A35
</td>
<td>
SGD
</td>
<td>
0.3
</td>
<td>
968.7
</td>
<td>
20.3
</td>
<td>
iBoxx ABF Singapore Bond Index Total Return Series
</td>
</tr>
<tr>
<td>
NIKKO AM SGD INVESTMENT GRADE COMPANY BOND ETF
</td>
<td>
MBH
</td>
<td>
SGD
</td>
<td>
0.3
</td>
<td>
529.0
</td>
<td>
33.1
</td>
<td>
iBoxx SGD Non-Soverigns Large Cap Investment Grade Index
</td>
</tr>
<tr>
<td rowspan="2">
ISHARES J.P. MORGAN USD ASIA CREDIT BOND INDEX ETF
</td>
<td>
QL2
</td>
<td>
SGD
</td>
<td rowspan="2">
0.3
</td>
<td rowspan="2">
63.6
</td>
<td rowspan="2">
3.5
</td>
<td rowspan="2">
J.P. Morgan Asia Credit Index - Core
</td>
</tr>
<tr>
<td>
N6M
</td>
<td>
USD
</td>
</tr>
<tr>
<td rowspan="2">
ISHARES BARCLAYS USD ASIA HIGH YIELD BOND INDEX ETF
</td>
<td>
QL3
</td>
<td>
SGD
</td>
<td rowspan="2">
0.5
</td>
<td rowspan="2">
166.4
</td>
<td rowspan="2">
-2.9
</td>
<td rowspan="2">
Bloomberg Barclays Asia USD High Yield Diversified Credit
</td>
</tr>
<tr>
<td>
O9P
</td>
<td>
USD
</td>
</tr>
<tr>
<td>
Total
</td>
<td>
&nbsp;
</td>
<td>
&nbsp;
</td>
<td>
&nbsp;
</td>
<td>
&nbsp;
</td>
<td>
49.7
</td>
<td>
&nbsp;
</td>
</tr>
</tbody>
</table>
&nbsp;Source: SGX &amp; Bloomberg (Data as of 4 June 2020)
^Dividends are reinvested Investing in ETFs ETFs are investment funds listed and traded intraday on a stock exchange. The majority aim to track the performance of an index and provide access to a wide variety of markets and asset classes, including local stocks, international securities, bonds, commodities or money markets. Each ETF gives investors access to the performance of the asset that comprises the underlying index. Investing in the ETF is also less costly if one was to build a similar portfolio by buying the individual stocks. It also provides exposure to international markets and asset classes that may be inaccessible to individual investors. To find out more about ETFs, click&nbsp;<a href="https://www.sgxacademy.com/home/infographics/what-you-need-to-know-about-investing-in-etfs/?utm_source=Research&amp;utm_medium=MU&amp;utm_campaign=ETFs&amp;utm_term='08062020&amp;utm_content=Market%20Update" target="_blank" rel="noopener">here</a>.&nbsp;&nbsp;


In a low yield environment, Fixed Income ETFs enable investors to diversify portfolios across a basket of bonds at a low cost.&nbsp; In the first five months of 2020, SGX’s five bond ETFs have drawn total net inflows of S$49.7M. Monthly turnover has also risen 13.1% YoY to S$22.5M. &nbsp;
In the 12M to 4 June, the five fixed income ETFs have averaged an annualised total return of 6.3%. Five SGX-listed fixed income ETFs have recorded 12M div yields between 2.0% and 6.2%, depending on the average rating of their underlying bonds over the past 12M. &nbsp;
ABF Singapore Bond Index Fund and Xtrackers II Singapore Government Bond UCITS ETF, which average a AAA credit rating, generated the highest annualised returns at 10.4% and 10.2% respectively.

Fixed income ETFs are listed funds designed to track the performance of a specific bond market index. The fixed income ETFs listed on SGX have a total fund size of nearly S$2 billion, and seek to replicate the returns of major bond market indices across Asia and Singapore.  The five fixed income ETFs on SGX that offer investors portfolio diversification are: &nbsp;

ABF Singapore Bond Index Fund
Xtrackers II Singapore Government Bond UCITS ETF
Nikko AM SGD Investment Grade Corporate Bond ETF
iShares JP Morgan USD Asia Credit Bond Index ETF
iShares Barclays USD Asia High Yield Bond Index ETF

 Fixed income ETFs allow investors to diversify their portfolio across a basket of bonds at a low cost, offering additional investment choices in the current low-yield environment. SGX-listed fixed income ETFs have recorded 12-month dividend yield between 2.0% and 6.2%, depending on the underlying bond’s average credit rating, and options range from AAA-rated investment grade bonds to high yield bonds.

12M Dividend Yield
In the YTD, the five bond ETFs have drawn total net inflows of S$49.7 million. Their monthly turnover has also risen 13.1% YoY to S$22.5 million.

Monthly Turnover for Five fixed income ETFs
In past 1Y, these five fixed income ETFs have averaged an annualised total return of 6.3%. ABF Singapore Bond Index Fund and Xtrackers II Singapore Government Bond UCITS ETF, which average a AAA credit rating, have generated the highest returns at 10.4% and 10.2% respectively. The average YTD, 3Y and 5Y annualised total returns for the five bond ETFs stand at 1.9%, 3.1% and 3.4% respectively.

YTD &amp; 1Y Annualised Total Returns for five fixed income ETFs
The tables below detail the five fixed income ETFs listed on SGX, sorted by YTD total annualised returns. &nbsp;




Name


Stock Code


Trading Currency


YTD Total Annualised Return (%)


1Y Total Annualised Return (%)


3Y Total Annualised Return (%)


5Y Total Annualised Return (%)


12M Div Yld (%)




XTRACKERS II SINGAPORE GOVERNMENT BOND UCITS ETF^


KV4


SGD


6.3


10.2


4.4


4.1


NA




ABF SINGAPORE BOND INDEX FUND


A35


SGD


6.1


10.4


4.5


3.8


2.0




NIKKO AM SGD INVESTMENT GRADE CORPORATE BOND ETF


MBH


SGD


1.1


4.4


NA


NA


2.0




ISHARES J.P. MORGAN USD ASIA CREDIT BOND INDEX ETF


QL2


SGD


-0.7


5.0


4.1


4.6


3.8




N6M


USD




ISHARES BARCLAYS USD ASIA HIGH YIELD BOND INDEX ETF


QL3


SGD


-3.4


1.4


2.7


4.6


6.2




O9P


USD




Average


&nbsp;


&nbsp;


1.9


6.3


3.1


3.4


2.8








Name


Stock Code


Trading Currency


Expense Ratio (%)


Fund Size (S$M)


YTD Net Inflow ($SM)


Underlying Index




XTRACKERS II SINGAPORE GOVERNMENT BOND UCITS ETF^


KV4


SGD


0.2


136.5


-4.3


FTSE Singapore Government Bond Index^




ABF SINGAPORE BOND INDEX FUND


A35


SGD


0.3


968.7


20.3


iBoxx ABF Singapore Bond Index Total Return Series




NIKKO AM SGD INVESTMENT GRADE COMPANY BOND ETF


MBH


SGD


0.3


529.0


33.1


iBoxx SGD Non-Soverigns Large Cap Investment Grade Index




ISHARES J.P. MORGAN USD ASIA CREDIT BOND INDEX ETF


QL2


SGD


0.3


63.6


3.5


J.P. Morgan Asia Credit Index - Core




N6M


USD




ISHARES BARCLAYS USD ASIA HIGH YIELD BOND INDEX ETF


QL3


SGD


0.5


166.4


-2.9


Bloomberg Barclays Asia USD High Yield Diversified Credit




O9P


USD




Total


&nbsp;


&nbsp;


&nbsp;


&nbsp;


49.7


&nbsp;




&nbsp;Source: SGX &amp; Bloomberg (Data as of 4 June 2020)
^Dividends are reinvested  Investing in ETFs  ETFs are investment funds listed and traded intraday on a stock exchange. The majority aim to track the performance of an index and provide access to a wide variety of markets and asset classes, including local stocks, international securities, bonds, commodities or money markets.  Each ETF gives investors access to the performance of the asset that comprises the underlying index. Investing in the ETF is also less costly if one was to build a similar portfolio by buying the individual stocks. It also provides exposure to international markets and asset classes that may be inaccessible to individual investors.  To find out more about ETFs, click&nbsp;here.&nbsp;&nbsp;

Five Fixed Income ETFs Average 1Y Annualised Return of 6%