AUM in Reit ETFs via digital platforms up 7 times in 3 years
AS SINGAPORE’S Reit ecosystem matures, the shelf of Reit exchange-traded funds (ETFs) listed on the SGX has also grown from three ETFs with combined assets under management (AUM) of S$357 million just three years ago to five ETFs with combined AUM of S$867 million as at Mar 31, 2023.
The five Reit ETFs (in order of AUM size) are NikkoAM-StraitsTrading Asia ex Japan Reit ETF, Lion-Phillip S-Reit ETF, CSOP iEdge SReit Leaders Index ETF, UOB APAC Green Reit ETF and Phillip SGX APAC DIV Reit ETF.
While total AUM doubled over the three-year period, the proportion of AUM holdings by institutional investors was overtaken by retail investors. Retail investors currently account for 41 per cent of the AUM in the five Reit ETFs while institutional investors make up another 40 per cent. In March 2020, institutional investors held 56 per cent and retail investors 35 per cent.
With the rise of digital investment platforms, the proportion of AUM holdings in robo-advisory portfolios and regular savings plans tripled from 4 per cent back in March 2020 to 13 per cent as at March 2023. This translates to over seven times growth in value, from S$16 million to S$114 million across the period. The proportion of AUM holdings via the Supplementary Retirement Scheme (SRS) and the CPF Investment Scheme (CPF-IS) has also grown from 4 per cent to 6 per cent across the same period.
In terms of sector performance, the local iEdge S-Reit Index, which gained 4.3 per cent in total returns in Q1 2023, outran the global FTSE EPRA Nareit Developed Index, which ended the quarter flat. Similarly, the two Reit ETFs with 100 per cent exposure to the S-Reits sector (Lion-Phillip S-Reit ETF and CSOP iEdge SReit Leaders Index ETF) averaged 5.1 per cent total returns over the period, outperforming the other three ETFs which saw 1 per cent average declines.
The Lion-Phillip S-Reit ETF tracks the Morningstar® Singapore Reit Yield Focus Index SM and was the best performer in Q1 2023 with 5.4 per cent total returns and a dividend yield of 5.2 per cent. This was followed by the CSOP iEdge SReit Leaders Index ETF, which tracks the iEdge SReit Leaders Index, with 4.5 per cent total returns in Q1 2023 and a dividend yield of 4.9 per cent.
The NikkoAM-StraitsTrading Asia ex Japan Reit ETF, which has exposure to Asia ex-Japan Reits, saw total returns of 1.4 per cent and boasts the highest dividend yield among the five at 5.5 per cent. On the other hand, the Phillip SGX APAC DIV Reit ETF and UOB APAC Green Reit ETF saw respective declines of 0.9 per cent and 3.6 per cent. SGX RESEARCH
The writer is a research analyst at SGX. For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly SReits & Property Trusts Chartbook
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