Lion-Phillip S-REIT ETF (SGX: CLR) is Singapore’s first exchange-traded fund (ETF) that is dedicated entirely to Singapore real estate investment trusts (REITs). It debuted on our local stock exchange in October 2017. As of 31 May 2018, the REIT ETF’s benchmark index, Morningstar Singapore REIT Yield Focus, had a distribution yield of 5.27% and a price-to-book ratio of 1.06.
Lion-Phillip S-REIT ETF tracks the performance of the Morningstar’s Singapore REIT Yield Focus index, as mentioned earlier. The index is one of Morningstar’s strategic beta indexes and uses a proprietary three-factor rules-based investment methodology with an emphasis on 1) business quality; 2) financial health; and 3) dividend yield.
The ETF portfolio will be rebalanced in June and December each year, and the ETF will pay out a distribution semi-annually (in February and August).
ETF investors must keep an eye on the expense ratio of the ETFs they are invested in. This ratio considers an ETF’s total annual operating expenses such as administrative, compliance, and management fees. The lower the ratio, the better it is for investors. Lion-Phillip S-REIT ETF carries an expense ratio of around 0.6% per year. In comparison, the SPDR STI ETF (SGX: ES3), which tracks the Straits Times Index (SGX: ^STI), has an expense ratio of 0.3% per annum.
The top five constituents of the Lion-Phillip S-REIT ETF’s benchmark index, as at 31 May 2018, were CapitaLand Mall Trust (SGX: C38U), Mapletree Commercial Trust (SGX: N2IU), Ascendas Real Estatement Investment Trust (SGX: A17U), CapitaLand Commercial Trust (SGX: C61U) and Suntec Real Estate Investment Trust (SGX: T82U). CapitaLand Mall Trust had a weight of 10% while Suntec REIT took up 8.69% of the index.
The following shows the performance of Lion-Phillip S-REIT ETF as compared to its benchmark index, as of 30 April 2018 (date of latest available information):Source: Lion-Phillip S-REIT ETF factsheet
Other REIT ETFs listed in Singapore include Phillip APAC SGX REIT ETF (SGX: BYJ) (SGX: BYI) and Nikko AM STC Asia REIT ETF (SGX: CFA). The former was listed in October 2016, and the latter went public in March 2017.
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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, Mapletree Commercial Trust, CapitaLand Commercial Trust and Parkway Life REIT. Motley Fool Singapore contributor Sudhan P owns units in Lion-Phillip S-REIT ETF, CapitaLand Mall Trust and CapitaLand Commercial Trust.