SGX Launches ETF Tracking APAC Financial Sector
The Singapore Exchange (SGX) recently launched the Lion-OCBC Securities APAC Financials Dividend Plus ETF. This exchange-traded fund (ETF) targets the financial sector across the Asia-Pacific (APAC) region.
SGX Launches ETF – About the ETF
The ETF is a joint effort between OCBC Securities and Lion Global Investors. They will use their expertise to offer investors exposure to the financial sector in APAC. The ETF delivers stable dividends from high-performing financial institutions. It tracks the iEdge APAC Financials Dividend Plus Index, which includes 30 of the largest financial companies based on free-float market capitalisation.
Benefits For Traders
This ETF launch will offer significant benefits to traders and investors:
Diversified Exposure
This ETF offers diversified exposure to a key economic area. It balances stability and growth potential by covering the top 30 financial institutions across diverse APAC markets. Investors can tap into different segments of the financial industry—from banking to insurance—without analysing individual stocks, reducing research time and complexity.
Dividend Income
This ETF attracts income-focused investors by promising stable and attractive dividend yields. The financial institutions in this index are selected for their strong dividend history, with a minimum dividend payout of 5% per annum for the first two years. This provides a predictable income stream.
Growth Opportunities
Investors can benefit from the economic growth in the region through this ETF. The APAC area has dynamic economic development and increasing influence in global finance. The ETF’s focus on financial services capitalizes on the sector’s growth.
Risk Mitigation
The ETF format inherently offers risk mitigation through diversification. Investors spread their risk across different markets and regulatory environments by investing in a basket of financial stocks across multiple countries. It reduces the impact of localized economic downturns.
Cost-Effectiveness
ETFs are generally cost-effective investment vehicles due to their lower management fees than actively managed funds. They also offer lower transaction costs than buying individual stocks.
Liquidity
The ETF will be listed on the Singapore Exchange and offer high liquidity, allowing investors to buy and sell shares easily throughout the trading day.
About The Collaborators
Both partners are combining their unique powers to provide the best for their customers:
OCBC Securities
OCBC Securities, officially known as OCBC Securities Private Limited, is a prominent securities and financial services firm in Singapore. It trades a wide array of financial products, including shares, exchange-traded funds (ETFs), warrants, and real estate investment trusts (REITs), among others. The company offers online and mobile platforms, allowing clients to trade securities efficiently and conveniently. OCBC Securities aims to lead in innovation, offering personalized trading experiences and robust investment tools to assist investors in making informed decisions.
Lion Global Investors
Lion Global Investors is a Singapore-based asset management firm that specialises in managing Asian fixed-income, equity, and multi-asset strategies for both institutional and retail investors. As of March 2024, its assets under management (AUM) were approximately S$71 billion. Lion Global Investors focuses on offering innovative and themed investment solutions, including a range of thematic ETFs that target sectors like REITs and technology.
Looking Ahead
Historically, APAC banks have offered strong dividend yields. Given its growth potential, this ETF allows investors to diversify into a dynamic region with promising financial prospects.
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