IMPORTANT POINTS TO KNOW ABOUT THE NEW ASEAN-FOCUSSED DIVIDEND ETF ON SGX

Banking sector makes up 26.5% of the index.

A new exchange traded fund (ETF) that focuses on dividend stocks listed on ASEAN stock exchanges was launched in Singapore this morning.

According to a press release from Singapore’s bourse operator Singapore Exchange, the One STOXX ASEAN Select Dividend ETF is the first ETF listing in Singapore by OneAM, Thailand’s largest ETF issuer and a leading asset management firm. The ETF will track the STOXX ASEAN Select Dividend 30 Index.

Here’re five interesting pieces of information about the STOXX ASEAN Select Dividend 30 Index I found from its factsheet (dated 28 February 2017):

1. The index picks high-dividend paying companies from six ASEAN countries, namely, Malaysia, Philippines, Thailand, Vietnam, Singapore, and Indonesia. There are 30 companies in total in the index.
2. Companies listed in Singapore, Malaysia, and Indonesia make up the bulk of the index. Singapore accounted for almost 24% of the index with Malaysia a close second at 23.5%. Indonesia is in third place with 22.7%. The index sets a maximum cap of seven companies per country (with the exception of Thailand, which has a cap of five) to keep it diversified. There is no minimum cap.
3. The banking sector makes up 26.5% of the index. This is the sector with the highest weightage. The next highest would be industrial goods and services, followed by oil and gas, and then telecommunications.
4. Stocks that have a dividend payout ratio of over 80% are excluded. The index also does not have any real estate investment trusts. The list of component stocks is reviewed on a quarterly basis.
5. The top 10 components of the index include two familiar Singapore companies. That would be oil rig builder and property development conglomerate Keppel Corporation Limited (SGX: BN4), and the utilities and marine engineering company Sembcorp Industries Limited (SGX: U96). The former holds a weightage of 3.69% while the latter accounts for 3.58% of the index.

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