What are some disadvantages of the STI ETFs?

I think one of the main disadvantages would be the low returns of the STI (blue line), especially when compared against the S&P500 (red line). All of them started off the around the same post 0'8 crisis, but their difference as of today is quite stark. You can tell a significant increase from the S&P, but the STI index has hardly moved, merely making similar gains and losses such that the net effect is eliminated.

If you had put your money in the S&P, which has a much more diversified base than the STI (with much of its weight on the banks), you would have clearly done much better. The S&P is not heavily weighted too much on a certain company (as compared to STI), and many of these companies have got huge international exposure like Apple, Shell etc. From a risk diversification point of view, the S&P seems stronger.

I think Isaac really hit the nail on its head with the proven lower returns from '08 to present day.

To elaborate on Zann's last point, I believe its not so much so extreme as to when SG's competitiveness is diminished but rather the dependency of core businesses in our country to foreign exports. Disregarding Bank Stocks + ComfortDelGro, local SG companies of scale are intertwined some form of Global Operations and heavily influenced by foreign markets while also not sharing the full upside during US/China booms (possibly due to lower volume and liquidity of SGX markets in general). Therefore this resulted in a somewhat stagnant STI returns from the course of '08 till today.