Report Summary for Nikko AM Singapore STI ETF

Report Date and Financial Year:

• Date of Report: 27 September 2024
• Financial Year: Ended 30 June 2024

Key Facts:

1. Performance: The Nikko AM Singapore STI ETF reported a total return of 8.95% for the year ending 30 June 2024, compared to the Straits Times Index, which had a return of 9.41%. Since its inception on 24 February 2009, the ETF has averaged an annual return of 8.06%.

2. Investment Objective: The ETF aims to replicate the performance of the Straits Times Index (STI) as closely as possible. It follows a full replication strategy, investing substantially in the index shares in the same weightings as the STI.

3. Dividends: The ETF declared and distributed dividends during the financial year:

   • Final distribution for FY 2023: S$7.68 per 100 units.
   • Interim distribution for FY 2024: S$8.06 per 100 units.

4. Net Assets: As of 30 June 2024, the fund’s net assets attributable to unitholders stood at S$736,793,162, with a net asset value per unit of S$3.3749.

5. Top Holdings: The largest investments include:

   • DBS Group Holdings Limited (23.51% of total net assets)
   • Oversea-Chinese Banking Corporation Limited (16.56%)
   • United Overseas Bank Limited (12.39%)

6. Income and Expenses: The fund reported a net income of S$33,220,778 and total return (after income tax) of S$62,693,726. The management fee for the year was S$1,366,696.

7. Risk Management: The ETF’s exposure to market, interest rate, and currency risks is managed through diversification and careful monitoring. The fund also employs securities lending to enhance returns.

8. Expense Ratio: The expense ratio for the fund for the year was 0.26%, lower than the previous year’s 0.29%.

Special Activities or Actions to Improve Profitability:

• Securities Lending: The ETF engages in securities lending transactions to generate additional income. As of 30 June 2024, securities on loan amounted to S$108,107,166.
• Reduced Expense Ratio: The fund has lowered its total expense ratio to 0.25% starting from 1 December 2023 to enhance investor returns.

Recommendations for Investors:

1. Current Holders:
   • Investors currently holding this ETF may consider maintaining their investment, given the fund’s consistent performance and the distribution of dividends. The focus on blue-chip Singapore stocks through the STI provides a balanced exposure to key sectors in Singapore’s economy.
2. Potential Investors:
   • Those not holding the ETF may consider investing, particularly if they seek an “index-based” approach to Singapore’s equity market. The fund’s low expense ratio and relatively stable returns make it an attractive option for investors looking for diversified exposure to the Singapore market.

Disclaimer:

This summary is based solely on the content of the attached annual report. It does not constitute financial advice. Investors are encouraged to consult a financial advisor and read the fund’s prospectus and product highlights sheet before making any investment decisions. Past performance is not indicative of future performance.