SPDR Straits Times Index ETF (Exchange Traded Fund) invests in a portfolio of stocks that are on the list of the Straits Times Index (STI). As such the fund gets dividends from these companies and it then distributes them out to investors of SPDR STI ETF twice a year.
Prices of SPDR STI ETF moved in nearly lockstep with the STI.
Below is a table showing the distribution history of SPDR STI ETF from 2010 to 2017.
|Date||Distribution ($)||NAV* ($)||Yield (%)|
|* NAV = Net Asset Value|
The average distribution yield was 2.8% per year for eight years above. This beats the interest rate offered for the CPF Ordinary Account of 2.5% p.a.
By investing in SPDR STI ETF, one gets to be invested in Singapore stocks. You need not spend time to research and pick specific stocks for your own portfolio. Based on my past experience, I had hits and misses. Another idea to consider – set up a Regular Savings Plan (RSP) to invest in a STI ETF on a regular basis. You pick more units of STI ETF when the index is down and you get lesser units when the index is up. This is called Dollar Cost Averaging. You need not time to enter the market.
(Note: There are other similar kinds of RSP.)
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