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Dividends boost STI return to 5.1% in YTD

My Gateway (92 x 92)The Straits Times Index (SGX: ^STI) has extended its year-to-date total return to 5.1%. This is attributed by a 3.5% price return plus dividend distributions. Total returns over the same timeframe were 1.2% for the Dow Jones Industrial Average, a 10.5% decline for the Nikkei 225 and a 0.1% decline for the Hang Seng Index. Of the 30 stocks that make up the STI, 25 stocks have issued dividends in the year thus far.

Like its constituents, the STI is investable through the STI ETFs listed on Singapore Exchange or via Regular Shares Savings (RSS) Plans. The STI ETFs attempt to track the performance of the STI benchmark. The 30 blue-chip companies that make up the STI represent as many as 14 different sectors under the Industry Classification Benchmark (ICB) with the majority of companies generating international revenues. The ETF thus provides these diversified aspects into a single security. RSS Plans further simplifies investment by automating the investment to a fixed dollar amount on a fixed day every month.

STI ETF performance YTD

There are two (ETFs) listed on SGX that track the STI, the SPDR STI ETF (SGX: ES3) and the Nikko AM Singapore STI ETF (SGX: G3B). The two ETFs have different board sizes and thus maintain different minimum transaction requirements.

With each unit valued at S$3.207712, at the end of 2013, a $10,000 position in the SPDR STI ETF would have grown to S$10,489.44. This would have included S$0.043 cents in semi-annual dividend distributions made in February. The Net Asset Value (NAV) for each unit in the SPDR ST I ETF is now S$3.321709. With a minimum investment size of 1000 units – assuming a trading price of S$3.32, the minimum investment size of the SPDR STI ETF would be S$3,332 not including transaction fees or the total expense ratio.

Similarly, the Nikko AM Singapore STI ETF NAV at the end of Dec 2013 was S$3.2176. A $10,000 position in the Nikko AM Singapore STI ETF would have grown to S$10,495.71. The Net Asset Value (NAV) for each unit in the Nikko AM Singapore STI ETF NAV is now S$3.3771. With a minimum investment size of 100 units – assuming a trading price of S$3.38, the minimum investment size of the Nikko AM Singapore STI ETF NAV would be S$338 not including transaction fees or the total expense ratio. Note that the NAV for the Nikko AM Singapore STI ETF is higher than the SPDR STI ETF as the former has not distributed accrued dividends in the year thus far.

STI stocks YTD

Of the 30 STI stocks, 19 stocks have generated a positive total return in the 2014 year to date. As noted above, of the 30 stocks that make up the STI, 25 stocks have issued dividends in the year thus far.

Total returns among the 30 STI stocks have averaged 7.7%.  With the STI total return of 5.1%, this average return insinuates there have been outperformances in the stocks that maintain a smaller index weight.  Indeed – the three best performing STI stocks over the first 21 weeks of 2014 were Olam International (SGX:O32), Jardine Cycle & Carriage (SGX:C07) and Noble Group (SGX:N21) and together these stocks maintain a combined STI weighting of 4.5%. The full list of STI stocks, index weightings and year to date performances are detailed in table below.

Name SGX Code % Index Weight Mkt Cap S$B Px Chg Pct YTD % Total Return YTD % Dvd Ind Yld %
DBS Group Holdings Ltd D05

10.6

41.6

-0.6

1.1

3.4

Singapore Telecommunications Ltd Z74

10.2

61.2

4.9

4.9

4.4

United Overseas Bank Ltd U11

9.6

35.2

5.2

8.0

3.1

Oversea-Chinese Banking Corp Ltd O39

9.5

33.3

-5.0

-3.3

3.5

Jardine Matheson Holdings Ltd J36

6.6

52.6

15.7

17.7

2.3

Keppel Corp Ltd BN4

5.5

19.5

-4.3

-1.6

3.7

Hongkong Land Holdings Ltd H78

3.7

20.9

19.1

21.3

2.5

Jardine Strategic Holdings Ltd J37

3.6

49.8

9.9

10.5

0.7

Global Logistic Properties Ltd MC0

3.0

13.4

-2.8

-2.8

1.6

Genting Singapore PLC G13

2.9

16.3

-11.0

-10.4

0.8

CapitaLand Ltd C31

2.9

13.7

5.9

8.6

2.5

Wilmar International Ltd F34

2.4

20.6

-5.8

-4.3

2.5

Singapore Press Holdings Ltd T39

2.4

6.8

2.4

4.2

3.6

City Developments Ltd C09

2.2

9.5

9.4

10.2

0.8

Thai Beverage PCL Y92

2.2

15.2

12.0

14.3

2.6

Singapore Technologies Engineering Ltd S63

2.1

11.8

-4.0

-1.0

1.8

Singapore Exchange Ltd S68

2.1

7.4

-4.5

-3.4

4.0

CapitaMall Trust C38U

1.9

7.1

7.1

10.1

5.0

Singapore Airlines Ltd C6L

1.9

12.1

-1.0

-1.0

2.1

Noble Group Ltd N21

1.8

8.7

22.4

23.6

0.9

Sembcorp Industries Ltd U96

1.7

9.6

-1.6

1.5

2.8

ComfortDelGro Corp Ltd C52

1.7

5.1

18.4

20.7

2.9

Hutchison Port Holdings Trust NS8U

1.7

7.9

5.8

10.6

8.0

Jardine Cycle & Carriage Ltd C07

1.6

16.1

26.1

29.2

3.0

Golden Agri-Resources Ltd E5H

1.3

7.4

5.5

6.4

1.9

Sembcorp Marine Ltd S51

1.2

8.4

-9.4

-7.6

2.7

CapitaMalls Asia Ltd JS8

1.2

9.2

19.9

20.8

1.5

Olam International Ltd O32

1.1

5.5

45.9

45.9

1.8

StarHub Ltd CC3

0.9

7.1

-3.5

-1.1

4.8

SIA Engineering Co Ltd S59

0.4

5.5

-2.2

-2.2

4.0

Source: Bloomberg (data as of 23 May 2014)

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.