European asset manager Amundi, Endowus launch low-cost index fund tracking STI
The Amundi Singapore Straits Times Index Fund offers an all-in-one fee and is under an institutional share class
[SINGAPORE] European asset manager Amundi and wealth adviser and investment platform Endowus on Wednesday (Jul 16) launched the Amundi Singapore Straits Times Index (STI) Fund.
This marks the first unit-trust-based index fund tracking the STI by a global asset manager in Singapore.
It will be available exclusively on the Endowus platform to both institutional and retail investors, at an all-in-one fee under an institutional share class.
“With no sales charges and low management fees, the fund offers another option for investors seeking growth with relatively lowered volatility compared to usual equity markets in their wealth journey,” noted the statement.
The Amundi Singapore STI fund has a total expense ratio of 0.15 per cent, to further expand the low-cost indexing investment solutions available for STI investors, said Albert Tse, chief executive of Amundi South Asia.
The fund does not incur additional trading costs, brokerage fees and exchange-traded expenses, he added.
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It aims to replicate the performance of the STI, which is driven by Singapore’s banking, real estate, telecommunications and industrial sectors.
In 2024, the STI delivered total returns of 24.3 per cent, achieving its best performance in a decade, both Amundi and Endowus noted.
The index maintained an average dividend yield of around 3.8 per cent over the 18-year period from January 2008 to June this year, with yields generally between 3 and 5 per cent.
This positions the fund as an option for investors seeking stable income or defensiveness, while maintaining exposure to the long-term growth potential of Singapore’s economy, they noted.
Other exchange-traded funds (ETFs) on the Singapore Exchange (SGX) which track the STI include the Nikko AM Singapore STI ETF – managed by Nikko Asset Management Asia – and the SPDR STI ETF which is managed by State Street Global Advisors Singapore.
Aligning with MAS efforts
The launch of the Amundi Singapore STI Fund also aligns with broader efforts by the Monetary Authority of Singapore (MAS) to strengthen the local equities market.
It is designed to complement various policy initiatives and incentives by attracting additional capital to benefit local enterprises, said Tse in an interview with The Business Times.
“Amundi has also been in constant dialogue with both MAS and SGX to collaborate and contribute towards increased capital inflows into Singapore equity markets,” he added.
Tse shared that the asset manager has submitted its proposal to participate in the S$5 billion Equity Market Development Programme (EQDP) that was announced by MAS in February this year.
He attributed this decision to Amundi’s “interests to contribute towards the improved market liquidity of Singapore-listed stocks at SGX and making Singapore a more attractive destination for new IPOs (initial public offerings) and fundraising”.
The EQDP will channel funds to asset managers with a “strong investment track record” and a focus on Singapore-listed equities. It is expected to encourage more funds and products to come to the local market.
Tse said: “We are proud to be the first global asset manager since the global financial crisis to launch a fund of this nature, leveraging our longstanding expertise in indexing solutions and trusted partnership with a home-grown financial platform like Endowus to deliver this to Singapore investors for SG60.”
Wong Wei Kong, editor-in-chief of the English, Malay and Tamil Media Group at SPH Media, said: “We’re delighted that the Straits Times Index will be the benchmark for Amundi’s innovative new fund. As the STI looks forward to being 60 next year, it is truly an integral part of the nation’s economic, business and market development.”
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