Exchange Traded Funds are only available in North American and Singapore markets.
You can buy or sell ETFs through our Investment Associates or online through www.dbsvonline.com, just like buying or selling a stock
You will be able to buy or sell ETFs on the exchange in the same way as stocks throughout the trading day.
Indexing, often called 'passive management,' involves investing in a group of stocks that represent the composition of a broad-market, sector, or international index. Index funds offer 'market level' performance, and aim to match the market performance of a specific index. Passive indexed investments generally have lower management and expense fees.
Here are some of the advantages of investing in ETFs
It may be due to the minimum bid size problem. Please call our Investment Service Centre for assistance.
Yes, there are ETFs where dividends from the underlying stocks are collected by the fund manager and redistributed to the investors on a quarterly or semi-annual basis (frequency varies across funds). ETF fund managers will determine if dividends are better utilised re-invested or distributed as income to investors. An investor should look into the distribution policy as specified in the prospectus and refer to the dividend announcements made by the fund manager. Dividends are paid out in the same way as if you would receive dividend payments from stocks. It is important to note that not all ETFs pay dividends.
Before investing in ETFs, it is important to examine liquidity, expenses and charges, tracking errors, market and currency risks, ETF structure and the sponsor, along with the performance track record. But an investment decision should not be driven by simply chasing the highest past performance. At DBS, we have a regular ETF strategy report that helps investors make decision on which ETFs are suitable for them.
Yes, you can use your CPF monies to purchase selected SGX-listed ETFs. You can settle your trade with your CPF monies when you have a CPF investment account opened with an agent bank and this account is linked to your DBS Vickers trading account.
However, you can only invest monies in excess of $20,000 and $40,000 in your Ordinary Account and Special Account, respectively. For SPDR Gold Shares, only 10% of excess investible savings in your Ordinary Account can be used.
There are currently four SGX-listed ETFs you can buy using CPF:
Fixed Income ETFs allow a customer to invest in bond portfolios at a scale and cost enjoyed by an institutional investor. The majority of bonds trade on an Over-the-Counter (OTC) basis. Hence, retail investors incur very wide bid-offer spreads when trading in small quantities of individual bonds.
The advent of fixed-income ETFs has allowed retail investors to access a huge range of fixed income portfolios, most of which are passively managed, thus generally much lower in costs than the Fixed Income Mutual Funds.
Bond ETFs pay dividends to shareholders along the life of maturity. When buying Fixed Income ETFs, you should be aware of the withholding taxes of certain jurisdictions.
Yes, if you have an operational Supplementary Retirement Scheme (SRS) account, you can use funds in the SRS account to buy most of the SGX-listed ETFs, but you have to settle the transaction in Singapore dollars.
ETFs are generally classified as Specified Investment Products (SIPs) and Monetary Authority of Singapore (MAS) had implemented measures since 1 January 2012 to safeguard the investors in Singapore. Due to the recent broadening in definition by MAS, do expect to see more ETFs re-classified as EIPs.
Investors who wish to trade SIPs are required to be pre-qualified by the brokers through the SIP declaration form or take the SGX Online Education Programme. Accredited investors can trade SIPs.
The objective of these ETFs is to efficiently deliver many of the themes present in actively managed portfolios. Smart Beta ETFs use rule-based, transparent strategies built around one or multiple investment themes. Basically these ETFs identify one or more factors or investment themes, then build a quantitative model for the security selection and weighting process, and wedge the approach into an index by re-weighting the stocks in the index according to that model.
ETFs mirror the index and are adjusted from time to time to reflect the latest composition of securities that make up the index.
ProShares introduced the first leveraged and inverse ETF in the U.S. in 2006. These ETFs are used by investors for short-term strategies to take bearish or bullish views or to manage risk.
With these ETFs, investors could be assured they would not lose more than what they have invested and could access leveraged or short exposure without the need to open a margin account or have direct positions in derivatives.
Inverse ETFs perform as the inverse of the benchmark it is designed to track. Leveraged ETFs, which are also known as Geared ETFs, seek returns e.g. 3x, 2x, -1x, -2x or -3x of the return of an index or other benchmark for a single day.
These products come with more volatility and should only be used by experienced traders.
Exchange Traded Notes (ETNs) are actually debt securities i.e. a structured note that promises to pay out returns based on a specific index.
ETNs can be structured as unsubordinated or unsecured debt.
ETNs may carry a higher risk as compared to Exchange Traded Funds since they do not hold an underlying basket of securities, contracts or futures. Instead, the issuer of the ETN aims to match the performance of a specified index. If an issuer defaults, investors holding ETNs can lose their entire investment.
It is also important that an investor is aware that the issuer of an ETN may suspend creations and redemptions when it decides it does not want to add to the debt on its balance sheet related to the index, on which the ETN is based. An example of an ETN is iPath S&P 500 VIX (VXX US Equity), which tracks the VIX futures.