Wondering how to buy STI Index? And what is it really? Is it a smart thing to own? Many are asking the question, but very few seem to be providing the answer. So, it’s time we take a crack at it for you!
Also, in this post, we’ll discuss…
- How to buy STI shares
- What is the dividend for STI?
- The 30 stocks that make up STI
- The difference between STI and SGX
…and even a few more answers to questions that perhaps you haven’t thought of yet!
If you’re wondering how to buy Straits Times Index and want to learn more about it too, then this post is for you!
This post has been written by our staff writer, Lindsey Smith.
How to Buy STI Index – An Intro
Whether you’re a new investor or you have a big portfolio, you’re always looking for diversification. How can you invest in different companies, sectors, industries, and even countries in order to protect yourself from losing everything if one market goes down.
One way to do this is to invest some of your money into international markets. One such market is the SGX, and STI is the index fund that tracks that market.
The easiest way to buy the STI index is through an ETF, or Exchanged-traded Fund. This is an index fund that trades on the market like a stock.
You probably still have questions though…
- What companies are in STI, and which STI ETF is better?
- How do I buy STI stocks?
- Is it even a good idea to buy STI right now?
Read on for all the information about expanding your portfolio into this market.
Related: How to Buy Google Shares
How Do I Buy STI Shares?
Now you know a bit about STI…and if you’re interested you’re probably searching for the answer to the question, “How do I buy STI shares?”
Let’s start by defining what STI stock is.
STI stands for Strait Times Index, and it is a fund that tracks the top 30 companies on the SGX. The SGX is the Singapore Exchange, Asia’s most liquid international market.
According to the MoneySmart Singapore website, STI is diversified over five different sectors and 19 different industries that are picked to show Singapore’s diverse economy.
While they include a range of industries, Singapore’s top 3 banks hold the highest weightages, which means the financial sector is heavily represented, at almost 46% overall.
If you are in the US, you can purchase STI stock from any brokerage account that has access to the SGX.
Some examples that are included in most places are the…
- iShares MSCI Singapore ETF,
- SPDR STI ETF (SGX:ES3), and
- Nikko AM STI ETF (SGX:G3B).
Some benefits of buying include exposure to large and mid-sized companies in Singapore, and targeted access to the Singapore stock market.
Wondering about the dividend for STI? It’s a fair question, and it’s a bit different depending on the fund you choose. Check out the below.
The SPDR STI ETF does pay dividends, which is around 3.45%. The expense ratio is 0.3%.
For Nikko AM STI ETF, the dividend is 3.20%, with an expense ratio of 0.3%.
iShares MSCI Singapore ETF is 2.40% with an expense ratio of 0.51%.
STI ETF Companies
So what exactly are the STI ETF companies? In other words, what are the companies represented in the STI Index?
As of writing, the companies included in STI are as follows:
- Singapore Press Holdings Limited
- Singapore Telecommunications Limited
- Mapletree Commercial Trust
- Mapletree Logistics Trust
- Oversea-Chinese Banking Corporation Limited
- DBS Group Holdings Ltd
- Singapore Technologies Engineering Ltd
- Venture Corporation Limited
- Jardine Matheson Holdings Limited
- Keppel Corporation Limited
- United Overseas Bank Limited
- CapitaLand Integrated Commercial Trust
- Singapore Airlines Limited
- Yangzijiang Shipbuilding (Holdings) Ltd.
- UOL Group Limited
- ComfortDelGro Corporation Limited
- Ascendas Real Estate Investment Trust
- City Developments Limited
- Wilmar International Limited
- Thai Beverage Public Company Limited
- Hongkong Land Holdings Limited
- Jardine Cycle & Carriage Limited
- Dairy Farm International Holdings Limited
- Genting Singapore Limited
- Singapore Exchange Limited
- Sembcorp Industries Ltd
- SATS Ltd
What is the Difference Between STI and SGX?
This is a more common question than you might think. The abbreviations can get confusing… What is the difference between STI and SGX?
SGX is the Singapore Exchange. It’s Asia’s most International multi-asset exchange. It’s kind of like the Nasdaq of the US.
STI is an index fund that tracks the top 30 companies in the SGX. Again, the comparison would be the Nasdaq 100 (QQQ) which is an index that tracks the top 100 tech companies listed on the Nasdaq.
Make more sense? I hope so! If not, keep reading. It may become clearer as you learn more.
Related: How to Buy VTSAX Index Fund
So which STI ETF is better?
SPDR STI ETF is the largest fund and has been around the longest. While Nikko AM STI ETF has the exact same expense ratio, the dividends are slightly less. This makes SPDR the better choice, higher payout, identical fees, and establishment in the market.
iShares MSCI STI ETF has a lower dividend yield and higher expense ratios, however if it’s the only one your brokerage offers, or if your brokerage adds fees for foreign markets to SPDR and Nikko AM, then iShares is a competitive choice.
Is STI ETF a Good Buy Right Now?
Let’s say you’re interested in buying some International shares to diversify your portfolio. Is STI ETF a good buy right now?
Let’s start with reasons why investing in STI might be a good choice.
If you are a beginner investor who wants diversification across markets and industries, and low fees, you might want to hold some STI in your portfolio.
You’ll own a little bit of each of the top 30 companies on the SGX, and you can buy and sell it quickly and easily if you choose.
Why the STI ETF Might be a bad move.
But…there is a reason the STI is sometimes referred to as the Seriously Terrible Index….
In the last 10 years it’s remained nearly flat when compared with the S&P 500, which grows at a much faster rate. With dividends that are below the 4% recommended to beat inflation, chances are it’s not going to do much for you in the long run.
Of course, I’m not a licensed professional. This is only my opinion and you should always research and seek out experts before investing. With that said, this is an ETF I would likely skip.
How to Buy STI Index – Are You In Or Out?
So what about you? After researching various funds and then landing on this article. Do you think STI is one you would consider? Why or why not? Tell us in the comments below! We’d love to hear your take!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.