Singapore’s First REIT ETF – Should I Add Some to My Portfolio?

Philip capital has announced the public listing of its first REIT ETF on 20 October. It claims to “provide investors transparent and low cost access to the diverse basket of quality Asia Pacific REITs which offer stable dividend income”.

The REIT has a heavy Australian weightage (59%), and a heavy retail weightage (47%).

Phillip SGX APAC Dividend Leaders REIT ETF Breakdown

reit-components

compoenent

Source: Philip Capital – REIT Prospectus

 

Is it Worth Adding to My Portfolio?

Here are some considerations:

  • There is a relatively high management fee of about 0.5% annually, which might go down as the AUM of the ETF increases.
  • There is a 15% withholding tax on Australian assets, which will lower the overall yield.
  • There is a 17% corporate tax which further lowers the yield, but there is a possibility they might do away with that, and if that happens, could act as a positive catalyst for the ETF price.
  • Overall, the net yield is about 4.5%, which is pretty decent, and if prices continue to slide, we might be able to average a higher yield on subsequent purchases.
  • This provides good diversification without the hassle of having to manage and monitor multiple counters, which is in line with my hands-off portfolio strategy.

After much consideration, I have decided to add some to my portfolio, and it will be reflected in my next monthly portfolio update for the month of October. As with all purchases, the quantity and timing is of utmost importance.

 

Useful links

General information – http://www.phillipfunds.com/home/banner_link4
Prospectus – http://phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Prospectus.pdf
Product Highlight Sheet – http://phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Product_Highlight_Sheet.pdf
Product Summary – http://www.phillipfunds.com/uploads/funds_file/Phillip_SGX_APAC_Dividend_Leaders_REIT_ETF_Product_Sheet_Oct_10.pdf

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About the author

Spencer Li is a self-made millionaire trader & investor, who achieved financial freedom at 27, having to date accumulated a diversified portfolio of properties, stocks, REITs, and 10+ businesses across different industries. As a professional trader, he has over 10 years of market experience, and has been featured on more than 20 occasions in the media.

 

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