The FTSE Value-Stocks ASEAN Index uses a proprietary screen to identify value stocks listed in ASEAN.
A recent report from SGX provides more insight. The FTSE Value-Stocks ASEAN Index consists of 50 value-stocks that are listed across five markets, namely Singapore, Indonesia, Thailand, the Philippines and Malaysia. As it turns out, 10 Singapore-listed companies made the cut for the value-based index. The index has returned 6.6% annually over the past 10 years, however these 10 Singapore constituents has returned a staggering 155% total return, or 9.9% annually.
As we take a closer look, we noted that there are two sectors make up the bulk of the 10 Singapore-listed companies in the index. We will be comparing the companies within each sector next (figures as of 13 Aug 2018, unless otherwise stated).
1. Real Estate Investment Trust (REIT)
The first sector that has three companies included in the FTSE Value-Stocks ASEAN index is the REIT sector. Mapletree Industrial Trust (SGX: ME8U), Mapletree Logistics Trust (SGX: M44U) and Ascendas Real Estate Investment Trust (SGX: A17U) made the cut.
The table below provides a snapshot of the returns over the past 10 years as well as its current price-to-book (PB) ratio, and distribution yield.
As seen from the table above, Mapletree Industrial Trust was the top performer among the REITs that were included in the index. The industrial-based REIT returned an astounding 258.5% over the past 10 years. Mapletree Logistics trust was not far behind in terms of returns with
If investors purchased an equal amount of all three REITs a decade ago, their returns, as a whole, would be a satisfying 211.2%. The REITs offer an average distribution of 6%, and are trading at an average PB ratio of 1.2.
2. Banking on Banks
The second industry with three Singapore companies in the FTSE Value-Stocks ASEAN Index is the banking sector. Singapore’s biggest local banks, DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corp Limited (SGX: O39), and United Overseas Bank Ltd (SGX: U11) were included in the index. The table below summaries its performance over the past 10 years together with its PB ratio and dividend yield.
From the table above, we see that the best performer among the banks was DBS Group with returns of 139.7% over the past 10 years. The other two banks are not far off, with OCBC and UOB delivering returns of 111.1% and 103.5%, respectively.
Investors who invested in the three banks 10-years ago would have enjoyed an average return of 118.1%. The banks are currently trading at an average PB ratio of 1.23, and offer a dividend of 3.8%.
Comparing the two sectors which make up six of 10 companies in the index, it becomes clear that REITs within the index has rewarded investors handsomely over the past 10 years. The three REITs, on average, have delivered returns that were over 90% higher than the Singapore’s banking sector. While that was the case 10-years back, the past is may not always be a good indicator of the future.
As such, investors should study the different sectors, and pick out the companies which can reward them handsomely over the next 10 years.
For more investing insights and to keep up to date on the latest news in the world of finance, you can sign up now for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore. Written by David Kuo, it will teach you how you can grow your wealth in the years ahead.
Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.
The Motley Fool Singapore contributor Esjay contributed to this article.
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 shares of Singapore Exchange, Mapletree Industrial Trust, United Overseas Bank, and DBS Group. Motley Fool Singapore writer Chin Hui Leong owns shares in Singapore Exchange and Mapletree Logistics Trust. Motley Fool Singapore contributor Esjay does not own any of the shares mentioned.