ETF launched here offers exposure to high-dividend Asean stocks

One Asset Management's chief executive Pote Harinasuta.
One Asset Management's chief executive Pote Harinasuta.ST PHOTO: FELINE LIM

Another exchange-traded fund is being added to market offerings here - one that gives investors rare exposure to South-east Asia's leading high-dividend stocks.

The US-dollar Stoxx Asean Select Dividend 30 Index ETF, which starts trading on the Singapore Exchange today, tracks the 30 best regional stocks in terms of dividend payout and liquidity.

"They are the 30 stocks selected with liquidity of over US$2 million (S$2.8 million), and 12-month average dividend of around 50 per cent to 80 per cent (of profit)," said chief executive Pote Harinasuta of fund manager One Asset Management.

The make-up of the underlying index - created by the European provider Stoxx - is to be reviewed annually and the stock weightings quarterly to ensure even exposure.

Stocks from six Asean countries are on the index now, including Singapore-listed stocks such as Singtel and OCBC. Reits are excluded from the index.

Regional heavyweights such as Indonesia's Bank Pembangunan Daerah Jawa Timur and Gudang Garam, and Malaysia's CIMB and Sime Darby are also in the portfolio.

"This is Singapore's first ETF that provides the opportunity to diversify to the most liquid and best dividend stocks across the region," Mr Pote told The Straits Times.

"In terms of fundamentals, we're looking at a region where consumption is high on the back of government spending and accommodative monetary policy. Our forecast for corporate earnings in Thailand this year, for instance, will be 30 billion baht (S$1.2 billion) after 2016's 25 billion baht."

He added: "Given that the markets have been up quite a bit lately, we're looking at at least 8 per cent to 10 per cent return for the fund in 2017."

The fund price is about US$2.90 per unit, and retail investors can trade in multiples of 100 units. The management fee is currently set at 0.5 per cent.

One Asset Management is a pioneer of fund products in Thailand, and is the country's biggest non-bank asset management firm. Its latest launch marks the company's maiden foray into Singapore, and follows the 20 million baht to 25 million baht Stoxx fund the firm launched in Thailand in 2015.

"We have seed fund of around US$5 million to US$10 million for the Singapore tranche, an amount that I expect to double in a year. Hopefully we can launch this in other regional markets, something that Bursa and the Indonesia Stock Exchange have shown some initial interest in," said Mr Pote.

But Singapore is still the leading fund hub in South-east Asia, and the choice destination for One Asset Management to bring more products out of Thailand.

"Obviously we want to focus on having a successful launch for the Stoxx fund now. But in the near future, the next launch here could be our ThaiDEX ETF," Mr Pote said, referring to its fund tracking the top 50 firms listed on the Stock Exchange of Thailand.

A version of this article appeared in the print edition of The Straits Times on April 05, 2017, with the headline 'ETF launched here offers exposure to high-dividend Asean stocks'. Print Edition | Subscribe