Is STI-ETF really a bad investment strategy?

It's not a great investment strategy for the following reasons

1) Serious lack of diversification

2) Huge opportunity costs, even relative to if you want to invest strictly in indices only

3) Low yields

4) High risk for the yield that you're getting (low risk-return ratio, even though the beta isn't very high - the yield is even lower).

There are some common reasons why people stiil insist on the STI ETF or tout it as a good investment (or worse, a safe investment) - to look at it objectively. 1) Lack of Forex Risk, which is common with better performing indices

2) Lack of withholding tax

3) Low costs

4) Local market exposure with companies whose information is readily available and whose services you utilize (which creates a sense of security and generally decreases the odds that the stock will plunge horribly, being a consumer)

5) Convenient investment instrument - in relation to both accessibility (how you can invest and how quickly) and liquidity (how quickly you can sell your shares if required).

I'd advise people to aim higher because you can, which I can help with - but it's not a horrible investment strategy, I just wouldn't go as far as saying its a good one.

You can always drop me a PM if you'd like exposure to instruments that are both safer and higher yielding. https://www.facebook.com/luke.ho.54

For at least the last 10 years, YES, an underperformer (however nobody can know the future), maybe S-REIT ETFs are a better way to invest into Singapore equity

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If you are looking for growth, look elsewhere. The US and China market are so much larger and provide better opportunities for growth.
Personnally, I allocate 2.5% of my portfolio to STI ETF. At the end of day, need to have some skin in the game in my home country.

STI is made up of Singapore's top 30 largest market capitalisation companies. And as what the article depicted, top 5 counters (3 of which are banks) constitute 50% towards the value of STI.

You can find the constituents of STI Index here

https://sginvestors.io/analysts/sti-straits-tim...

Hence it is rather skewed in a way and not an actual representation of the entire Singapore's market as opposed to other markets which has a relatively good mix of industries tapping on various sectors etc.

Is it a bad strategy? Not necessarily.

S&P 500 rose 17% YTD

STI rose 11.9% YTD

Calculating the beta of STI (with S&P as the main market index), STI's beta is 0.69.

In good times, S&P 500 moves up by $1, STI would move up $0.69. However, if S&P 500 falls by $1, STI would only fall by $0.69.

With risk comes reward, vice versa.