Yesterday, Lion Global Investors Limited and Phillip Capital Management (S) Ltd jointly launched Singapore’s first exchange-traded fund (ETF) dedicated entirely to Singapore real estate investment trusts (REITs). The ETF will be called Lion-Phillip S-REIT ETF and it will be listed on the Mainboard of the Singapore stock market.
Here are 10 things about the Lion-Phillip S-REIT ETF that you may be interested to know:
1. The ETF will track the performance of Morningstar’s Singapore REIT Yield Focus Index.
2. The index is one of Morningstar’s strategic beta indexes and uses a proprietary three-factor rules-based investment methodology that emphasises on 1) business quality; 2) financial health; and 3) dividend yield.
3. The ETF will consist of 23 high-quality Singapore-listed REITs, and the weight of each REIT will be capped at 10%.
4. The portfolio will be rebalanced in June and December each year, and the ETF will pay out a distribution semi-annually (in February and August).
5. As at 31 August 2017, the price-to-book ratio of the index was 1.03, and the trailing 12-month dividend yield stood at 5.75%.
6. The top five constituents of the index, as at 31 August 2017, were CapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Suntec Real Estate Investment Trust (SGX: T82U), Mapletree Commercial Trust (SGX: N2IU), and Keppel REIT (SGX: K71U). For the full list of the index’s constituents and their respective portfolio weights, you can head here. You can also view the historical returns of the index at the same link.
7. The top three sub-sectors of the index are office at 34%, followed by retail and industrial at 26% each.
8. The management fee will be 0.5% per year of the ETF’s net asset value.
9. The initial offer period for the ETF opened at 9 am on 2 October 2017 and will close at 11 am on 20 October 2017. The issue price of each unit during the initial offer period is S$1.00.
10. During the initial offer period, investors may only purchase units through the participating dealers – Phillip Securities Pte Ltd, DBS Vickers Securities (Singapore) Pte Ltd, Commerzbank AG, and UOB Kay Hian Pte Ltd – at a minimum application unit size of 50,000 units, or in excess at multiples of 1,000 units. The participating dealers may set a lower minimum amount for retail investors.
After the initial offer period, investors may purchase or sell units of the ETF either through the participating dealers or through the local stock exchange, just like any other stock, at a minimum trading board lot size of 100 units.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of Capitaland Mall Trust. Motley Fool Singapore contributor Sudhan P owns units of Capitaland Mall Trust and CapitaLand Commercial Trust.