Saturday, October 15, 2016

Phillip SGX APAC Dividend Leaders REIT ETF - My Sharing

Mid last week, the folks from Phillip Capital management organized a sharing session with the peer financial bloggers on their upcoming, home-grown and first ever REIT ETF - Phillip SGX APAC Dividend Leader REIT ETF. Personally, I do invest in a couple of local REITs for dividend yield purpose and here come another option for consideration. 

Following are some key summary of the REIT ETF:

Manager : Phillip Capital Management (S) Ltd

Currency : USD (Primary) and SGD

Dividend Distribution : Semi-Annual

Projected Dividend Yield : 5% (before taking into consideration of Expense Ratio of 0.65% per annum and Management Fee of 0.50% per annum).

Consist Of : 30 REITS from the Asia Pacific (excluding Japan), the constituents sector breakdown are as per following: Australia (59%), Singapore (30%) and Hong Kong (11%)

Top 10 REITS :
REITS                     (Weights) - Country
Link REIT              (10.20%) - Hong Kong
Scentre Group        (9.72%) - Australia
Westfield Corp       (9.55%) - Australia
Stockland               (8.73%) - Australia
Vicinity Centres     (6.72%) - Australia
Goodman Group    (5.46%) - Australia
Mirvac Group        (5.34%) - Australia
Ascendas REIT      (5.16%) - Singapore
GPT Group/The     (4.84%) - Australia
Capital Mall Trust (3.97%) - Singapore

Rebalancing : If necessary, the index will be rebalanced semi-annually in March and September. 
Bloomberg Tickers : PAREIT (US$) ; PAREITS (SG$)

Trading : To be commenced from 20/10/2016 (Thu)

Bloomberg Tickers : PAREIT (US$) and PAREITS (SG$)

With the nett dividend yield of less than 5%, it might not seems appealing to the REITs lovers (myself included) as there are many other local REITs that can do much better than that. Of course, I do appreciate the other two key motivation/objectives that this REIT ETF trying to provide:

1. Ensure sustainability of the dividend yield (I believed that's where the semi-annual re-balancing act come into play, when deemed necessary). 

2. Diversification of the risk (minimally for a start, the risk are being spread out across 3 countries. According to the CIO, there are plan to bring in suitable REITs from other Asia Pacific [ex Japan] like India or China into the portfolio).     

If you are an existing ETF investor, I believed this is a piece of good news as it provides more option for you to flex your investment strategy. 

What is your view on this upcoming REIT ETF?


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