How Phillip SING Income ETF compares to other ETFs in SG!
The Phillip SING Income ETF debuted in 29oct2018 and this is an update for April 2020 after COVID-19 has hit!
It invest into Singapore shares on a diversified approach and gets you a 5% dividend yield.
The market crash did not spare it but now may be where it is showing good value as a dividend investing tool.
Below is a snapshot of the 1yr performance of this ETF.
History and strategy of Phillip SING Income ETF
At launch in 2018, Banks are 31%, REITS are 24% and telcos are 17% of the ETF.
But substantial changes can be seen.
Below is a quick snapshot of ETF allocation at launch.
Since Oct 2019, Banks are 38%, REITS are 17% and telcos are 16% of the ETF.
What we can see also is SGX has shot up to be the number 2 allocation of 9.78%.
SGX happens to be the only share in the index still positive at start 2020 amidst the market crash.
Above Top 10 allocation is from Oct2019 Factsheet
Investment approach
The ETF seeks to replicate Morningstar® Singapore Yield Focus IndexSM.
It aims to track the performance of top 30 companies based on a quality in- come strategy using the proprietary factors that underpin the successful Morningstar DYF family of Indices.
Unlike the STI ETF which buys the biggest companies listed in SG, the Phillip SING Income ETF selects and invests for you based on some factors.
Their composite factor scores to examine which company to invest for you comprises the
1) quantitative moat score (kind of how operationally stable the business is)
2) financial health factor (kind of how financially stable the business is)
3) trailing 12-month dividend yield (which is how much dividend the company pays).
This is a "Smart Beta approach". Click here to read description.
The Phillip Sing Income ETF will have a management fee of 0.4% per year, with the expense ratio capped at 0.7%.
Dividends of Phillip SING Income ETF vs Lion-Phillip S-REIT ETF
The management fee for both ETF is about the same.
Click here to read the Lion-Phillip S-REIT ETF
It pays closer to a 6% dividend yield which is about 1% more than the Phillip SING Income ETF
That's because allocations are fully to Singapore REITS.
For the Lion-Phillip S-REIT ETF, dividends would be paid semi-annually at the manager’s discretion.
But you are expected to received dividends every June and December for the Phillip SING Income ETF.
Some key thoughts
The Phillip Sing Income ETF is a good investment tool for dividends. Dividend is paid semi-annually.
It has more REIT allocation vs STI ETF which may be good or bad.
But the SMART BETA approach seems to be useful, at least to me.
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Last updated on April 16th, 2020 at 03:40 pm
Hi Weilun, can’t quite see your reply/analysis