Browsing through the search queries that brings visitors to my blog, I always come up plenty of content ideas. The area of Real Estate Investment Trusts (REITs) is one that I’m personally interested in.
Just a day or two ago, one of the the search keyword that led visitors to my Index Investing Blog is “drop in reits singapore“. I guess somebody must have been spooked by the sharp drop on Thursday?
While the Straits Times Index dived 61.20 (1.77%), the FTSE ST Real Estate Index recorded a drop of 26.67 (3.17%) in comparison.
Now, does people seriously think that the only way REITs can go is up? The interest rate is low in the current environment, but it does not mean it will remain this way. Read about REITs’ vicious cycle of interest rate risk here. If you’re serious about REITs investing specifically in Singapore, pick up Building Wealth Through REITs by Bobby Jayaraman, and you’ll know more about Singapore REITs than 90% of the investors out there. Learn, and understand what you’re investing in.
Coincidentally, another search term that brought visitors here was “singapore reit etf
“. To the best of my knowledge, there is no such product. The closest one you can get is Phillip Singapore Real Estate Income Fund
by Phillip Capital (fund size S$46m).
Is it an ETF? No.
Will you incur additional expenses as a result? Yes.
Is it worth it? Depends on the individual.
From the perspective of a small-time investor who believes in both the capital-appreciation and dividends-paying characteristics of REITs, it is an accessible way to invest (e.g. S$200/monthly regular savings plan) and buy into 20 REITs or more.
Of course, these come at the price of fund management fee / sales charge etc.
Lastly, there are global REITs ETFs (e.g. VNQI:US
) such as those offered by Vanguard. Do take note that you’re going to take a severe hit (30%) in terms of tax withholding for dividends
covered in my previous post.
On a side note, Vanguard
has recently listed its first Hong Kong-domiciled exchange traded fund (ETF). Will they be coming the the shores of our beloved country? I sure hope so!