SPDR Straits Times Index ETF vs Nikko AM STI ETF

Both exchange traded funds (ETF) are traded on Singapore Stock Exchange.

The SPDR Straits Times Index ETF seeks to generate returns that closely correspond to the performance of the Straits Times Index (STI).

This fund invested in 30 FTSE Straits Times Index component stocks at varying percentages of total net assets.

Nikko AM Singapore STI ETF: The investment objective of the Fund is to replicate as closely as possible, before expenses, the performance of the FTSE Straits Times Index.

Both funds select stocks from 30-stock FTSE STI but at different proportions from each other. Their net asset value per unit ratios (NAV per unit) differ from each other. See table below for a comparison.

SPDR STI ETF * Nikko AM STI ETF **
Inception date 17 Apr 2002 24 Feb 2009
Fund size $379m $126 m
NAV per unit $3.24 $3.3224
Price at 15 Aug $3.24 $3.30
Board lot size 1000 100
Expense ratio 0.3% 0.28%
Dividend distribution Semi-annually At least once a year
Distribution yield 2.62% 2.14%

* as at 15 August 2013
** as at 30 June 2013/14 August 2013

On 15 August 2013, STI was at 3220.92 points level, Price of SPDR STI ETF was $3.24, Price for Nikko AM Singapore STI ETF was $3.30. NAV per unit for Nikko STI ETF was higher than SPDR STI ETF ($3.3224 vs $3.24).

Fund size for SPDR STI ETF was three times bigger than Nikko’s. SPDR STI ETF was established earlier in 2002 and Nikko’s about seven years later.

Distribution yield for SPDR’s was 2.62% and Nikko’s was 2.14%.

Please note:

SPDR STI ETF is still treated as Specified Investment Product (SIP) by Monetary Authority of Singapore while Nikko AM Singapore STI ETF is no longer an SIP (non-SIP product). Any retail investor can trade freely on Nikko’s STI ETF without pre-conditions to be eligible to do so. To trade SPDR STI ETF, you will need to be assessed as being eligible to trade in SIP.

In order to get a piece of action on Singapore stocks, both ETFs allow you to do so at a fraction of the costs as opposed to actually owning 30 component stocks of the STI. I am watching STI ETF for price movement and buying more units using SRS money or with cash (when the price is acceptable to me).

Note: POSB introduced Invest-Saver plan recently. At $100 a month, the scheme will invest in Nikko AM Singapore STI ETF for the investors.

Copyright © 2013, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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11 Responses to SPDR Straits Times Index ETF vs Nikko AM STI ETF

  1. John says:

    Hi, may I know if I can buy into either ETFs under CPFIS? Possible to do it via the banks (DBS,UOB,OCBC) or only through a brokerage firm? Thanks!

    • limkimtong says:

      SPDR STI ETF is a Specified Investment Product (SIP) and therefore you must be pre-qualified to invest in this. No such restriction on Nikko AM STI ETF. Trade on Nikko AM STI as if it is like shares. I believe CPFIS money can be used to buy Nikko AM STI ETF or SPDR STI ETF (if you are pre-qualified for the latter).

  2. Ferns says:

    Hi, POSB has an Invest-Saver plan that allows you to apply Dollar Cost Averaging by investing a fix amount every month. From your table, it has an expense ratio of 0.28%. It also says that there is a 1% sales charge for every transaction. Does that mean the expense ratio is actually 1.28%?

    So if I opt to invest $1000 every month, I’m actually paying $12.80?

    • limkimtong says:

      Expense ratio is charged by managers of ETF within the yearly profit and loss performance of ETF. It is ultimately priced into the price of ETF which affects all holders of ETF. As to sales charge, check with POSB.

  3. momo says:

    Dear Lim Kim Tong, Nikko AM does not implement a Total Expense Ratio. Their TER in the initial years/half-years was >0.50% if I remember correctly. The last 2 years was 0.40 and 0.39% from the latest annual report. This is one thing bad about Nikko AM. They are managing ETFs like Unit Trusts; no TER. Uniquely Nikko AM. Unacceptable if you ask me. Again, hope you can create more awareness about this. Thanks.

  4. limkimtong says:

    Visit http://www.nikkoam.com.sg/etf/sti for latest Total Expense Ratio info.

    • momo says:

      To clarify, I meant Nikko AM does not have a cap to their expense ratio because they do not spell out their fees as TER, unlike what most other ETF managers do. Eg SPDR STI ETF has TER of 0.30%, while Nikko AM only says management fee of 0.20% and trustee fee of 0.08%. Any their expense ratio? 0.39% for the latest FY. Like I said, their initial ERs were >0.50%. How can such a thing happen? Simply because Nikko AM does not have a cap on their ER. Unique indeed, but disappointing. Misleading if you ask me.

  5. Mich says:

    Hi, I am currently doing homework before making my first purchase of SPDR STI ETF.

    Noticed that it made a dividend payout of 0.107 in Jan 2016 – basically the full dividend of the entire year for the previous few years.

    Is there a change in dividend payout policy or the likes that you could share?

    • limkimtong says:

      SPDR STI ETF pays out dividend twice in a financial year called interim dividend and final dividend.
      For 1-year financial results to 30 June 2015 (1 Jul 2014 to 30 June 2015):
      Interim dividend paid on 17 February 2015 = $0.048
      Final dividend paid on 20 August 2015 = $0.049
      In a new financial year ending 30 June 2016, interim dividend paid on 18 February 2016 was $0.051.
      Please refer to web pages of SPDR STI ETF for the above information.

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