The global recovery had boosted some economies far more than others. Singapore is one whose GDP climbed 32.1% in the first quarter of last year and 26% in the second quarter. The government has taken proactive actions in fighting the inflation. The ETF market is very attractive and more diverse than many other Asian markets specially China.
Following the footsteps of US and European markets the Singapore ETF market is contributing to the bigger part of trading volumes includes six fixed income ETFs, six money market ETFs and six commodities related ETFs.
The ETF launches started in the start of 2002 and since then the number of ETFs in Singapore Stock Exchange (SGX) has expanded significantly. The first ever ‘inverse ETF’ was launched by SGX in 2009, which provided more opportunities for investors in choices for ETF. The ETF market performed best that year with over S$800 million in turnover and 120 million in volume. Till last year SGX is having 49 ETFs listed covering equities, commodities, money market and fixed income.
The iShares MSCI Singapore Index Fund
The iShares MSCI Singapore Index Fund (EWS) is one of the most accelerating ETFs including about 30 large publicly traded Singaporean stocks. It remains the best option for investors and it remains heavy in large-caps and banking firms. Other big sectors include 21.5% industries, 13.2% telecommunication firms and 11% consumer goods. The giant caps make over 90% of the fund’s total assets. It holds 33 securities in total and has good levels of liquidity.
According to Deutsche Bank the ETFs in Singapore make up 1.5% of daily trading in SGX and it is going to double in the coming two years. The bank added 10 ETFs in the Singapore market in 2009 and by 2011 it has around 31 new ETFs. The officials are investing because of the surety in economical stability and growth of the ETF market in the country. The Singapore ETFs have a presence in the global scenario as well and make up of about 40% of daily market turnover in the US and 14% in Europe.
The reasons to invest in the ETF market of Singapore are compelling enough to consider. The growth rate which is surging up to 17.9% assures that it is the fastest growing economy in the world. Singapore mainly relies on import but it has managed a trade surplus to keep a balanced budget and a stable currency. So the economy is ideal having 70% of financial and service industries. It is becoming a more researched and development based economy. The accounting rules and regulations are the most conservative ones and the information technology industry accounts for 7.7% of Singapore’s GDP.
Some economists predict that this small island may overtake China as Asia’s fastest growing economies. The growth drivers for this economy includes tourism, manufacturing centers and becoming the financial hub because of low tax rate and educated workforce.