Singapore REIT ETFs: Nikko AM-Straits Trading and Philips-SGX APAC REIT ETFs compared

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Investors keen for a Singapore-listed REIT ETF with exposure across the Asia-Pacific region now have two options.

Nikko Asset Management and Straits Trading have now entered the fray, announcing the Nikko AM-Straits Trading Asia ex Japan REIT ETF teaming in early March 2017.

This ETF is slated to list on the Singapore Exchange (SGX) on 29 March the same year, and has estimated dividends of about 5% per annum based on distribution of the components REITs.

It joins the Philips SGX APAC Dividend Leaders REIT ETF, which was listed in October 2016.

But which REIT ETF should you choose given the subtle, but important nuances between the two Singapore REIT ETFs in terms of diversity, geographical coverage, and property types?

The following table gives a summary of the similarities, but more importantly the differences between the two REIT ETFs.

REIT ETF Nikko AM-Straits Trading Asia ex Japan REIT ETF Philips SGX APAC Dividend Leaders REIT ETF
Tracks FTSE EPRA/NAREIT Asia ex Japan Net Total Return Index SGX APAC ex Japan Dividend REIT Index
Constituents 23 30
Fee (per annum) 0.5% 0.5%
Economies Hong Kong, Malaysia, Singapore Australia, Hong Kong, Singapore
Largest constituent Singapore's Ascendas REIT (10.28%) Hong Kong's Link REIT (11.21%)
Listed March 2017 October 2016
Primary property type Retail REITs Industrial REITs

(This information is correct as at the time and date of publishing)

In summary, both ETFs will feature the same annual management fee of 0.5% per annum.

Secondly, investors looking for greater diversification in terms of geographical coverage are probably better suited for the Philips SGX APAC Dividend Leaders REIT ETF, given a significant number of REIT constituents with exposure to the Australian market, on top of a greater number of REIT constituents.

Its counterpart, in comparison, is largely exposed to markets in Asia.

And thirdly, the Philips SGX APAC Dividend Leaders REIT ETF is more exposed to the industrial sector as compared to the Nikko AM-Straits Trading Asia ex Japan REIT ETF, which is relatively more retail-heavy.

Investors looking to capitalise on the growth in middle-class spending in the Asian region, may be better poised with the latter.

Full constituents of the two REIT ETFs are given in the tables below:

Nikko AM-Straits Trading Asia ex Japan REIT ETF

REIT Country Type Capped Index (%)
Ascott REIT Singapore Hospitality 2.15
Hui Xian REIT Hong Kong Diversified 3.2
Spring REIT Hong Kong Industrial + Office 0.84
Yuexiu REIT Hong Kong Retail 1.93
CapitaLand Retail China Trust Singapore Retail 1.71
Mapletree Greater China Commercial Trust Singapore Retail 4.15
Champion REIT Hong Kong Industrial + Office 4.14
Link REIT Hong Kong Retail 9.68
Fortune REIT Hong Kong Retail 5
Lippo Malls Indonesia Retail Trust Singapore Retail 1.78
First REIT Singapore Health 1.49
Sunway REIT Malaysia Retail 2.18
Pavilion REIT Malaysia Retail 1.27
IGB REIT Malaysia Retail 2.13
Mapletree Commercial Trust Singapore Diversified 6.67
CDL Hospitality Trust Singapore Hospitality 2.08
Mapletree Logistics Trust Singapore Industrial 3.56
Keppel REIT Singapore Office 4.43
Mapletree Industrial Trust Singapore Industrial 4.77
Ascendas REIT Singapore Industrial 10.28
CapitaLand Commercial Trust Singapore Office 7.03
Suntec REIT Singapore Retail + Office 9.62
CapitaLand Mall Trust Singapore Retail 9.88

Philips SGX APAC Dividend Leaders REIT ETF

REIT Name Weight (%) REIT Listed In
Link REIT 11.21 Hong Kong
Scentre Group 10.3 Australia
Stockland 8.65 Australia
Westfield Corp 8.23 Australia
Vicinity Centres 7.48 Australia
GPT Group 5.97 Australia
Mirvac Group 5.82 Australia
Goodman Group 5.66 Australia
Ascendas REIT 4.47 Singapore
CapitaLand Mall Trust 3.52 Singapore
Suntec REIT 3.14 Singapore
CapitaLand Commercial Trust 2.47 Singapore
Mapletree Industrial Trust 1.93 Singapore
Mapletree Greater China Commercial Trust 1.88 Singapore
Investa Office Fund 1.76 Australia
Keppel REIT 1.69 Singapore
Mapletree Commercial Trust 1.56 Singapore
Mapletree Logistics Trust 1.55 Singapore
Charter Hall Group 1.38 Australia
Champion REIT 1.28 Hong Kong
Charter Hall Retail REIT 1.22 Australia
Shopping Centres Australasia Property 1.19 Australia
BWP Trust 1.06 Australia
Cache Logistics Trust 1.05 Singapore
Ascott Residence Trust 1.03 Singapore
Cromwell Property Group 1.02 Australia
Starhill Global REIT 0.97 Singapore
Frasers Centrepoint Trust 0.92 Singapore
CDL Hospitality Trust 0.88 Singapore
Abacus Property Group 0.71 Australia
Share.

About Author

Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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