State Street SPDR Straits Times Index ETF: Key Investor Highlights and Risks
State Street SPDR® Straits Times Index ETF: Key Investor Highlights and Risks
Date: 3 March 2026
Overview
The State Street SPDR® Straits Times Index ETF (“the Fund”, SGX code: ES3) is a long-established exchange traded fund (ETF) listed on the Singapore Exchange (SGX-ST) since 17 April 2002. It is managed by State Street Global Advisors Singapore Limited, with State Street Global Advisors Asia Limited serving as sub-manager. The Fund tracks the Straits Times Index (STI), which comprises the top 30 eligible companies listed in Singapore.
Key Features
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Product Type: Exchange Traded Fund (ETF) constituted as a unit trust in Singapore.
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Underlying Asset: Straits Times Index (STI), maintained by FTSE International Ltd. The STI is reviewed semi-annually (March and September), ensuring index constituents reflect market performance and sector diversification.
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Expense Ratio: 0.28% for the financial year ended 30 June 2024, making it a low-cost investment option for passive equity exposure.
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Currency: Traded in Singapore Dollars (SGD).
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Distribution Policy: The Manager intends to make distributions, net of expenses, to investors twice a year. However, distributions are not guaranteed and depend on dividends paid by the index constituents.
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Unit Size: Board lot size is 1 unit, allowing for flexible investment amounts.
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Market Makers: Phillip Securities Pte Ltd and Flow Traders Asia Pte Ltd currently serve as designated market makers to enhance liquidity.
Product Suitability
The Fund is best suited for investors seeking:
- A low-cost, passive approach to investing in the Singapore equity market.
- Exposure to the largest Singapore-listed companies, either for long-term asset allocation or short-term trading purposes.
Investors who are not comfortable with the risks involved or do not understand the product should not invest.
Investment Strategy
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The Fund employs a full-replication indexing strategy, investing substantially all its assets in the shares of companies making up the STI, in similar weightings as the index.
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If direct replication is impractical due to market circumstances, the Manager may use alternative indexing techniques to closely track the index.
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Portfolio adjustments may occur in anticipation of changes to index constituents.
Key Risks for Investors
Market and Credit Risks
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The Fund is subject to the same risks as the Singapore equity market, including economic and political developments, interest rate changes, and shifts in investor sentiment.
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The net asset value (NAV) of the Fund will typically move in tandem with the STI. A drop in the STI will likely result in a corresponding fall in the Fund’s NAV.
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Units may trade at a discount or premium to NAV, depending on market conditions and supply-demand dynamics.
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Limited liquidity in index shares can adversely affect the Fund’s ability to buy or sell holdings at desirable prices.
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The Fund’s assets are concentrated in Singapore, exposing it to country-specific risks and potential volatility.
Liquidity Risks
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Units are not individually redeemable except in large aggregated sizes (currently 50,000 units for cash and 500,000 units for in-kind redemption).
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Although listed on SGX-ST, an active secondary market is not guaranteed. Liquidity could be adversely affected if no market maker is present or if trading is suspended.
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Delisting from SGX-ST could lead to Fund termination, which may impact investors’ ability to trade or redeem units.
Product-Specific Risks
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The Fund is passively managed and does not take action to avoid losses on specific stocks unless those stocks are removed from the STI.
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Tracking error may occur, meaning the Fund may not exactly match the performance of the STI due to fees, expenses, and market factors.
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Dividends are not guaranteed and depend on the payout policies of the underlying companies.
Fees and Charges
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Annual Management Fee: Currently no more than 0.3% per annum (maximum 1%), retained fully by the Manager.
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Annual Trustee Fee: No more than 0.035% per annum, paid by the Manager (minimum S\$38,000, maximum 0.15% per annum).
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Service Charges: Payable by the Fund for creation/redemption requests, but capped at the transaction fee level.
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Trading on SGX-ST: Investors pay normal brokerage and other transaction fees as per their broker’s schedule.
Potential Price-Sensitive and Shareholder-Relevant Information
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Distribution Policy: Any change to the dividend policy, or a significant cut in distributions due to lower dividends from STI constituents, could impact investor sentiment and the trading price of the ETF.
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Index Changes: Semi-annual STI reviews in March and September may lead to changes in the ETF’s holdings. Major additions or deletions could affect the ETF’s performance and trading price.
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Liquidity Events: Suspension or delisting of the ETF from SGX-ST would have a direct, material impact on investors’ ability to trade units.
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Tracking Error: Any persistent and significant tracking error between the ETF and the STI could erode investor confidence.
Contacts for Investors
Conclusion
The State Street SPDR® Straits Times Index ETF offers a low-cost, liquid, and diversified way to gain exposure to Singapore’s largest companies. However, investors should be aware of the risks tied to market volatility, liquidity, and the Fund’s passive management approach. Shareholders should monitor distribution announcements, semi-annual index reviews, and any developments related to Fund listing status or tracking error, as these could have material impacts on ETF valuation and liquidity.
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors are advised to consult the Fund’s Prospectus and seek professional financial advice before making investment decisions. Past performance is not indicative of future results. The value of investments may fall as well as rise, and investors may not recover the amount invested.
View SS SPDR STI ETF Historical chart here
