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The 3 Main Indices in Singapore

StockMarketBoardWhen people on the streets talk about the Singapore stock market, they are most probably referring to the STRAITS TIMES INDEX (SGX: ^STI), generally known as “STI”. However, STI only represents the 30 largest companies in market value out of a total 776 listed companies on the Singapore Exchange. There are also the other 2 common Indexes known as FTSE ST Small Cap Index (SGX: FSTS) and FTSE ST Mid Cap Index (SGX: FSTM).

Let’s take a look on what defines the 3 Main Indexes and how they have performed so far.

STRAITS TIMES INDEX (SGX: ^STI)

This index comprises of the largest 30 companies by full market capitalisation that meets stated eligibility requirements in terms of liquidity, size, and free float weighting (how many shares are readily available for trading).

Some of the heavyweight blue chip names you are likely to have heard of include SingTel (SGX: Z74), CapitaLand Limited (SGX: C31), and Singapore Exchange (SGX: S68). After increasing by around 10+% since the beginning of the year, the slide recently has resulted in the STI giving back almost all of its gains, ending up with a 1.47% increase to-date.

FTSE ST Mid Cap Index (SGX: FSTM)

This index comprises the next 50 companies by full market capitalization that meets stated eligibility requirements. M1 (SGX: B2F) and SuperGroup (SGX: S10) are two examples of mid caps which look to be on their way to become established blue chips. The year-to-date returns are a measly 0.08%, nothing to rave about.

FTSE ST Small Cap Index (SGX: FSTS)

Here comes the smallest of them all! The Small Cap Index is made up of constituents within the top 98% of the SGX Mainboard by full market capitalization. They will also need to meet the stated eligibility requirements, but are not constituents of the STI and the FTSE ST Mid Cap Index. The FTSE ST Small Cap Index landed year-to-date returns in positive territory up 0.45%, outperforming the Mid Cap Index.

Foolish Bottom-Line

There are still many toher indices created via different categories such as their geographical location – FTSE ST China Index (SGX: FSTC) or even sector – FTSE ST Real Estate Index (SGX: FSTAS8600). The indices have been designed for various purposes: the creation of structured products, index tracking funds, ETFs or as performance benchmarks. Most importantly, it allows investors to zoom in to see how the particular index is performing and what actions can be taken.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.