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A new Straits Times Dividend Index to be created. Singapore Dividend ETF Soon likely

Just got wind that SGX and SPH and FTSE will be working to create a Straits Times Index Dividend Index to facilitate the creation of new investment products.

The index represents the cumulative value of ordinary dividends paid by the stock components of the 30-member benchmark index, the Straits Times Index, and will pave the way for “creating products like derivatives, tracker funds, exchange-traded funds and other structured products,” according to a statement sent to the exchange.

The benchmark has gained 10% this year.

The dividend index will run on a calendar year basis with reviews in March and September to take into account any changes in the index components, according to the statement.

Well, this is very likely that it will pave the way for a Singapore Dividend Select ETF which would be good for investors who are fans of low cost ETFs. If its local ETFs priced in SGD it will be best, but it will depend on the aggregate dividend yield of the basket of stocks.

Some of the best criterias would be:

  1. Dividend growing for the last 5 years
  2. Dividend with less than a fixed payout ratio

This would be very similar to the SGX list dividend ETF DJ STOXX Global Select Dividend 100 index. But I struggle to find a lot of Singapore Companies that fit that criteria.

Nevertheless, it is interesting to see how this develops.


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Tuesday 2nd of November 2010

I just hoped that this is in SGD, not like the ETF DJ STOXX Global Select Dividend 100 : with it's valuation in EUR but quoted in USD.


Tuesday 2nd of November 2010

this is def gonna be in USD i suppose. but essentially what matters is what the currency the revenue is earn in and what is its relations to home currency isnt it.


Tuesday 2nd of November 2010

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Wednesday 3rd of November 2010

hi Selina, thats a long comment let me digest and get back to you shortly.

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