Asked by Anonymous

Updated on 18 Apr 2019

Which S-Reit ETF would you recommend for stable dividends?

Of the 3-4 S-Reits ETF out there, which one will you recommend if an investor wants to buy for keeps and just collect dividends? thanks


Answers (1)

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Sandra Teo
Sandra Teo,
Level 6. Master
Answered on 28 Mar 2019


The three S-REITS ETFs are Lion Global S-REIT ETF, Phillip APAC SGX REIT ETF and Nikko AM Straits Trading Asia ex-Japan REIT ETF. Here is a quick chart comparing the three REITS ETF.

As of Oct 2018, the 1-Year Returns (including distribution) are

  1. Lion-Phillip S-REIT ETF: -0.30%
  2. Nikko AM Straits Trading Asia Ex-Japan REIT ETF: 0.75%
  3. Phillip SGX REIT ETF: -0.74%

The dividend yields are:

  1. Lion-Phillip S-REIT ETF: 0.96%
  2. Nikko AM Straits Trading Asia Ex-Japan REIT ETF: 1.08%
  3. Phillip SGX REIT ETF: 5.01%

S-REITS ETF are relatively young, listed only for 1-2 years, thus it is hard to determine which ETF will yield stable dividends. To determine which REITS ETF to invest in you could consider the diversification of the REITS ETF. For instance, Lion-Phillip only invest in Singapore-listed REITs whereas Nikko AM only has 60.5% of its portfolio listed in S-REITS.

However, I would like to bring up the point of high recurring management fees. All 3 REITS ETF have recurring management fee, with Lion-Phillip and Nikko AM at approximately 0.5% per annum annualised. To put this into context, the popular S&P500 indexes and Vanguard's S&P500 ETF charges an expense ratio of 0.1% and 0.05% respectively. This management fees are in addition to the fees charged by the REIT manager. By investing in a REIT ETF, you not only have to pay fees to the REIT Manager, Property Manager and trustee at the REIT level but also the fund manager and the trustee again at the ETF level.