New ETF offers access to high-dividend funds
Another exchange-traded fund is being added to market offerings here - one that gives investors a rare exposure to South-east Asia's leading high-dividend stocks.
The US-dollar Stoxx Asean Select Dividend 30 Index ETF, which starts trading on the Singapore Exchange today, tracks the 30 best regional stocks in terms of dividend payout and liquidity.
"They are the 30 stocks selected with liquidity of over US$2 million (S$2.8 million), and 12-month average dividend of around 50 per cent to 80 per cent (of profit)," said chief executive Pote Harinasuta of fund manager One Asset Management.
The make-up of the underlying index - created by the European provider Stoxx - will be reviewed annually and the stock weightings quarterly to ensure even exposure.
Stocks from six Asean countries are on the index now, including Singapore-listed stocks such as Singtel, OCBC, Venture Corp and Yangzijiang Shipbuilding. Reits are excluded.
Regional heavyweights such as Indonesia's Bank Pembangunan Daerah Jawa Timur and Gudang Garam, and Malaysia's CIMB and Sime Darby are also in the portfolio.
"This is Singapore's first ETF that provides the opportunity to diversify to the most liquid and best dividend stocks across the region," Mr Pote told The Straits Times.
He added: "We're looking at at least 8 per cent to 10 per cent return for the fund in 2017."
The fund price is about US$2.90 per unit, and retail investors can trade in multiples of 100 units. The management fee is currently set at 0.50 per cent.
One Asset Management is a pioneer of fund products in Thailand, and is the country's biggest non-bank asset management firm. Its latest launch here marks its maiden foray into Singapore.