Nikko AM Singapore STI ETF is an exchange-traded fund established in Singapore. The Fund’s investment objective is to replicate as closely as possible, before expenses, the performance of the FTSE Straits Times Index. The Fund will invest all, or substantially all, of its assets in Index Shares in substantially the same weightings as reflected in the FTSE Straits Times Index.
For those who have no idea what “STI ETF” refers to, let’s first understand what it is: An Exchange-traded Fund (ETF) tracking the Straits Times Index (STI).
In Singapore, our stock index is the Straits Times Index, or STI.
With a history dating back to 1966, the STI tracks the performance of the top 30 companies listed on the Singapore Exchange. The 30 STI stocks represent five different sectors and 19 different industries, chosen to best depict Singapore’s diverse economy. The STI is represented by some of the largest businesses incorporated in Singapore, such as DBS, UOB, Singtel, Keppel Corporation and CapitaLand Limited. Of course, the tides change every year and some companies may be removed from the list while others are included.
The composition of the STI is reviewed quarterly and it must be noted that each stock has a different weight or impact on the STI. As of 17 Jan 2019, the current top constituents are tabled below, with their respective market capitalisation and industry.
Name | Weight | Sector |
DBS Group Holdings Ltd | 15.85% | Finance |
Oversea-Chinese Banking Corporation Limited | 13.49% | Finance |
United Overseas Bank Ltd. (Singapore) | 11.73% | Finance |
Singapore Telecommunications Limited | 7.85% | Telecommunications |
Jardine Matheson Holdings Limited | 6.58% | Holding Firms |
Hongkong Land Holdings Limited | 3.79% | Real Estate |
Jardine Strategic Holdings Limited | 3.11% | Holding Firms |
Keppel Corporation Limited | 3.08% | Engineering Services |
CapitaLand Limited | 2.86% | Real Estate |
Thai Beverage Public Co. Ltd | 2.45% | Food & Beverage |
An STI ETF is precisely, an investment fund that seeks to replicate the performance of the STI. This is done by investing in as many of the same companies that make up the STI, and trying to ensure the same weightings. So, for example, if the STI increases the weight of OCBC, then those managing the STI ETF will increase their investment in OCBC.
