UOB APAC Green REIT ETF Annual Performance Review (FY2025)

The UOB APAC Green REIT ETF, part of the United ESG Advanced ETF Series, has published its annual report for the financial year ended 30 June 2025. This analysis provides a structured breakdown of key financial metrics, performance trends, notable events, and an actionable outlook for investors based on data disclosed within the report.

Key Financial Metrics

Performance Trends & Benchmark Comparison

During the review period, the UOB APAC Green REIT ETF delivered a 12.36% return, closely tracking its benchmark, the iEdge-UOB APAC Yield Focus Green REIT Index, which returned 14.27%. This marks a strong reversal from the previous year’s underperformance, when the fund posted a loss. The fund’s NAV per unit grew by 7.9%, despite a significant decrease in overall assets, mainly driven by large redemptions.

The ETF’s performance was supported by robust returns in North Asia, particularly South Korea and Taiwan, as well as a meaningful rebound in China and strong sector performance in Australia and Hong Kong. Key contributors included Link REIT (Hong Kong), Vicinity Centres (Australia), Stockland REIT (Australia), CapitaLand Integrated Commercial Trust (Singapore), and several Japanese REITs.

Dividend Distribution

The ETF distributed S\$2.26 million in dividends for FY2025 (S\$1.529 per 100 units in September and S\$1.388 per 100 units in March). This is a 10.9% decrease from the previous year’s S\$2.54 million.

Portfolio Composition

• Geographical Allocation:
  • Australia: 40.15%
  • Japan: 31.96%
  • Singapore: 19.83%
  • Hong Kong: 6.52%
• Industry: 100% Real Estate (REITs)
• Top Holdings: CapitaLand Integrated Commercial Trust, Stockland REIT, Scentre Group REIT, Link REIT, GPT Group REIT, Vicinity Centres, Dexus REIT, Mirvac Group REIT, GLP J-REIT, Japan Real Estate Investment Corp.

Exceptional Items and Fund Flows

• Unusual Fund Flows: The ETF saw massive redemptions totaling S\$32.09 million, compared to minimal subscriptions (S\$0.24 million).
• Expense Ratio: Increased to 0.94% from 0.82% last year, reflecting higher relative costs due to the lower asset base.
• Turnover Ratio: Rose to 27.64% from 21.83%.
• No leverage, borrowings, or significant derivative positions at year-end.

ESG and Green Impact

The ETF maintains a strong ESG profile, with 98.4% of its assets aligned with the Index’s ESG focus. The fund invests in REITs with superior environmental performance, evidenced by:

• 29% improvement in Scope 1 & 2 GHG emissions over broad-market APAC REITs
• 29% improvement in water consumed
• 27% improvement in energy consumed
• Higher percentage of green building certifications

Macroeconomic & Market Commentary

The report describes a resilient Asia-Pacific REIT market despite macro headwinds such as geopolitical tensions, shifting policy environments, and uneven economic data. South Korea outperformed on political stability and tech sector growth, while China rebounded on stimulus and improving sentiment. Australia’s market, after early underperformance, gained on banking and retail strength but faces consumption/investment headwinds from ongoing trade disputes. Singapore benefited from defensive, dividend-yielding stocks but is expected to see slower growth in 2H25.

Key Risks & Outlook

• Risks: Ongoing trade/tariff disputes, export controls, and macro/geopolitical uncertainties.
• Positive Outlook: REIT valuations are compelling, borrowing costs are stabilizing, and earnings are underpinned by organic growth and acquisitions. The manager expects potential sector re-rating and sees REITs as attractive for total return investors (yield plus capital appreciation).

The fund continues to track the benchmark closely and implements a semi-annual rebalancing strategy. The latest index review in March 2025 led to the inclusion of three Japanese and one Indian REIT, and removal of several Singaporean and Japanese REITs.

Related-Party Transactions

• All transactions with the manager (UOB Asset Management Ltd) and trustee (State Street Trust SG Ltd) are at arm’s length and disclosed as per requirements.

Chairman’s Statement

The report does not contain a separate Chairman’s Statement.

Conclusion & Investment Recommendations

Summary: The UOB APAC Green REIT ETF posted a strong recovery in FY2025, delivering a double-digit return and outperforming its previous year’s losses. The NAV per unit rose, dividend income remained robust, and ESG credentials are solid. However, there was a >50% drop in assets, largely from substantial redemptions. The market outlook remains cautiously optimistic, but significant risks from macro and geopolitical factors persist.

• If you currently hold the ETF:
  The fund’s performance and yield profile have improved, and it continues to offer attractive exposure to green real estate in APAC. If your investment horizon is medium to long term and you seek ESG-aligned income, holding is reasonable. However, monitor asset flows and redemption rates, as persistent outflows could affect liquidity and tracking.
• If you do not currently hold the ETF:
  For investors seeking diversified APAC REIT exposure with a strong ESG tilt and stabilized returns, this ETF may be an attractive addition, particularly given the positive performance turnaround and ongoing macro tailwinds for the sector. Consider initiating a position if your risk appetite aligns with regional REITs and green investment mandates.

Disclaimer: This analysis is based solely on information disclosed in the FY2025 annual report. It does not constitute financial advice or a solicitation to buy or sell any securities. Investors should perform their own due diligence and consider their risk tolerance and investment goals before making any investment decisions.

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