SGX UCITS ETFs: What Singapore Investors Need to Know [Chills 287 ft MoneyOwl & SGX]

Summary

The discussion focuses on the arrival of four Ireland-domiciled UCITS ETFs on SGX and how Singapore investors should assess them. The speakers view the listings as a meaningful improvement in access: investors can trade the funds through SGX and major brokerages without needing a separate overseas trading account. They stress, however, that choosing an ETF means examining what it holds and how it is managed—not just its ticker, listing venue or fee.

Singapore’s ETF market has grown substantially, with more retail investors using low-cost funds. The speakers favor broad, low-cost index investing for long-term portfolios, while noting that ETFs can also be actively managed, thematic or leveraged. An ETF is a wrapper, not an investment strategy in itself.

ETFs, Assets and Instruments Mentioned

• Four new UCITS ETFs on SGX: A developed-markets global fund tracking MSCI World, a US fund, a Nasdaq-100 fund and an equal-weighted S&P 500 fund. The specific tickers are not given in the subtitles.
• CSPX: A London-listed, Ireland-domiciled S&P 500 ETF, cited as an existing alternative.
• Amundi unit trusts: Discussed as low-cost global and US index-fund alternatives.
• Global indexes: MSCI World, which covers developed markets, and an all-country world approach, which includes emerging markets. “VW” is mentioned, but the subtitles do not establish a clear ticker.
• Other ETFs and instruments: Gold, STI, technology, financial-sector and REIT ETFs; fixed-income ETFs; single-stock and leveraged ETFs; and daily leverage certificates (DLCs).
• Other Singapore instruments and schemes: T-bills, Singapore Savings Bonds, Singapore Government Securities (SGS) and CPF investment options.

Key Numbers and Market Details

• Singapore had about 54 ETFs, with a new listing expected to bring the total to 55, followed by more UCITS listings.
• Singapore ETF assets under management (AUM) grew from about S$5 billion at the end of 2019 to more than S$20 billion—roughly fourfold. Retail AUM reportedly grew sixfold and now makes up more than 40% of the total. The speakers also cite retail AUM rising from roughly S$1.6 billion to S$9 billion.
• The new ETFs’ early-subscription period was in September, with listings expected in October.
• Cited annual expense ratios:
  • CSPX: 0.07%
  • New US S&P 500 ETF: 0.03%
  • Amundi US fund: 0.05%
• The speakers explain that US dividends paid to a US-domiciled fund can face 30% withholding tax for non-US investors, compared with 15% for an Ireland-domiciled UCITS fund under the US–Ireland treaty. At a 1% dividend yield, the difference was estimated at roughly 15–16 basis points before considering other costs.
• US-listed investing may also involve FX conversion costs. The speakers discuss US estate-tax exposure and a US$60,000 threshold, with a potential tax rate of up to 40%. The subtitle transcript renders the threshold unclearly; investors should verify current rules and obtain appropriate tax advice.
• SGX market makers must provide continuous quotes during trading hours, with at least S$50,000 notional on each side. The speakers cite typical spreads of about 10–20 basis points for some liquid ETFs and a 30-basis-point maximum quote spread for the gold ETF they discuss. Actual spreads depend on the product and market conditions.

Investing Framework and Considerations

• Check the ETF’s contents and strategy. Identify the underlying index, geographic and sector exposure, weighting method, and whether the fund is genuinely passive or includes active decisions.
• Build a diversified core. The MoneyOwl perspective favors broad, low-cost global investing rather than trying to identify future winning countries, sectors or companies. Investors may add emerging-market exposure separately if desired.
• Understand index weighting. Market-cap-weighted indexes give larger companies greater weight. Equal-weighted indexes reduce that concentration but produce a different exposure.
• Do not assume “global” means the whole world. MSCI World covers developed markets, and the speakers say the US accounts for roughly 60–70% of it. An all-country index is described as approximately 88–90% developed markets and 10–12% emerging markets.
• Compare total costs, not just the stated expense ratio. Consider withholding taxes, brokerage charges, FX conversion, bid–ask spreads and the costs of accessing or holding the fund. The speakers say unit trusts may still suit smaller investors or regular monthly investors, depending on platform charges and dealing arrangements.
• Consider access and liquidity. Early subscription may avoid a post-listing spread and possibly some processing fees, but it is not essential for every investor. Waiting allows investors to observe trading and liquidity after listing. Use limit orders rather than rushing to trade at the quoted price.
• Account for rebalancing needs. ETFs may let investors redeploy buying power quickly through the same broker, while unit trusts can involve slower processing. One speaker cites unit-trust settlement as T+7, contrasting it with the faster trading workflow for ETFs.
• Distinguish trading from long-term investing. An ETF can be used for tactical trades, but buying ETFs does not automatically make an investor passive. Long-term investors should avoid trading merely because ETFs are easy to trade.

Risks and Cautions

• A Singapore-dollar trading currency can make transactions and portfolio viewing more convenient, but it does not remove foreign-currency exposure in the underlying assets.
• UCITS withholding-tax advantages rely on the US–Ireland treaty; a participant raises the possibility of treaty changes as a risk to monitor.
• ETFs with thin liquidity may have wider spreads and, in extreme cases, could be delisted. Market-maker requirements provide quotes but do not guarantee narrow spreads.
• Daily-reset leveraged ETFs do not simply deliver a fixed multiple of an asset’s long-term return. Volatility and the path of daily returns can erode or alter performance. The speakers warn investors to understand the product mechanics before using leverage.
• The discussion also cautions against assuming that engineered floors, yield or downside protection come without cost. Insurance-linked investment products and option-based strategies may involve fees and complex trade-offs; there is no “free lunch.”
• Dawn’s personal approach: She says she does not use DCA and would not buy the relevant indexes at or near all-time highs. She may consider buying after a decline of around 15–20%, but says she would reassess valuations and competing opportunities. This is her stated approach, not a general recommendation.
• The panel’s general caution is that investors need not rush into the early subscription; any potential benefit should be weighed against the option to wait and observe.

Disclosure and Sources

Dawn explicitly says, jokingly, that her comments are “not financial advice.”

Presenters: Reggie (host, The Financial Coconut/TFC); Dawn (SG Budget Babe); Chuin Ting Weber (CEO and CIO, MoneyOwl); and Wayin/Kang Wei Chin (SGX, as identified in the video context).

Sources discussed: MoneyOwl and SGX.