An ETF is a fund that tracks a specific index or indices. For example, in Singapore, the Straits Time Index (STI) ETF holds 30 stocks to replicate the market index. An example of an overseas index is the S&P500, which tracks 500 of the largest companies listed on stock exchanges in the United States. By investing in an ETF, you are tracking the performance of a specific group of companies instead of a single company.
Other than stocks, ETFs can also track a corporate bond or a commodities index. Corporate bonds may be difficult for retail investors to invest in directly, but there are ETFs that track investment grade corporate bonds, thus making them assessable to retail investors. There are also commodities ETFs that track gold or other commodities.
ETFs generally have lower fees and commissions compared to Unit Trusts. This is because the components of ETFs follow the index without active intervention from fund managers. This is why ETFs are known as passively managed funds.
Learn how to start investing in ETFs in our NAV.sg educational section
Investing in ETFs require a lower cash outlay as compared with buying individual stocks to build a portfolio that reflects a market index. As most ETFs are passively managed, their fees and charges are generally lower than actively-managed funds.
Spread your risk by investing in broad-based indexes.
Providing access to some of the world’s best stocks and most dynamic markets, ETFs allow you to invest in blue-chip stocks and gain exposure to foreign markets.
Unfavourable market conditions may affect the prices of underlying stocks, hence reducing the ETF value.
The fund manager may not be able to perfectly produce the performance of the market index which the ETF seeks to reflect.
ETFs priced in a foreign currency are exposed to fluctuations in foreign exchange rates.
DBS Vickers allows you to invest in ETFs beyond Singapore and access over 70 global ETFs. The table below provides examples of the ETFs available through Vickers and the market or sector that they’re tracking.
|ETF||Market / Sector|
|NikkoAM Singapore STI ETF||Singapore, Straits Time Index (equities)|
|Vanguard S&P500 ETF||United States, S&P500 (equities)|
|HSBC Hang Seng Tech ETF||Hong Kong, Tech equities|
|NikkoAM-ICBCSG China Bond ETF||China, Corporate Bond|
|GLD USD ETF||Commodities, Gold|
To learn more on how to build your investment portfolio using ETF
Risks: This product introduction does not form part of any offer or recommendation, or have any regard to the investment objectives, financial situation or needs of any specific person. Before committing to an investment, please seek advice from a financial or other professional adviser regarding the suitability of the product for you and read the relevant product offer documents, including the risk disclosures, which can be obtained from DBS Vickers. If you do not wish to seek financial advice, please consider carefully whether the product is suitable for you.
Investing in ETFs involves risks, including but not limited to economic, market, and liquidity risks. Some ETFs are synthetic and employ derivatives and swap-based instruments to replicate benchmark returns. Holders of synthetic ETFs are therefore exposed to counterparty risks. To manage the risks, investors should keep abreast of economic and corporate developments and seek to understand the workings of such instrument and financial markets in general. To find out more, please contact our Investment Specialists.
Open a trading account online anytime at your own convenience. Simply login via your DBS/POSB iBanking account to complete your application online.
If you wish to trade in the Singapore securities market, you’ll also need to open a Central Depository (CDP) account. If you do not own a CDP account, you may open one here before applying for a DBS Vickers Online Trading Account.
Due to the high application volume, the processing time for account opening may take longer than usual.