UOB unit lists first Reit ETF linked to environmental performance

Fund drew more than $80m in assets under management during initial public offering

UOB Asset Management (UOBAM) yesterday announced the listing of the UOB Asia-Pacific (Apac) Green real estate investment trust (Reit) exchange-traded fund (ETF) on the Singapore Exchange.

UOBAM says this is the world's first ETF enabling retail investors to invest in "quality green Reits across the Asia-Pacific with dividend yields".

It added that the fund drew more than $80 million in assets under management during the initial offering period, which closed last Thursday.

An ETF is a type of security that tracks an index, sector, commodity or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can.

The Reits featured in the UOB Apac Green Reit ETF are spread across Australia, Hong Kong, Japan and Singapore. Sectors include industrial, office, residential and retail.

The UOB Apac Green Reit ETF aims to replicate the performance of the iEdge-UOB Apac Yield Focus Green Reit Index, which listed last month.

The index tracks 50 higher-yielding Reits across the region with strong environmental performance.

UOB says that, when compared with similar indexes and Reits in the Asia-Pacific without a green focus, companies on the iEdge-UOB Apac Yield Focus Green Reit Index and, correspondingly, the UOB Apac Green Reit ETF, have lower greenhouse gas emissions and energy and water consumption.

UOBAM chief executive Thio Boon Kiat said the UOB Apac Green Reit ETF presents investors with "an opportunity to participate in the development of sustainable real estate, so they can invest for profit and purpose".

The new ETF aims for an annual dividend yield of up to 4 per cent, with dividends to be distributed on a quarterly basis.

It is the fifth ETF traded on the SGX that tracks the performance of an Apac Reit index.

The CSOP iEdge S-Reit Leaders Index ETF, which tracks the iEdge S-Reit Leaders Index, listed last Thursday.

At the listing of the UOB Apac Green Reit ETF yesterday, Singapore Exchange (SGX) CEO Loh Boon Chye said Reit ETFs are one of the fastest-growing asset classes on SGX.

He added that Singapore has "the most vibrant Reit market in Asia excluding Japan" and that the market has grown more than 10 per cent in size annually since its start in 2002.

Meanwhile, "ETFs are cost-effective instruments to access a basket of stocks and we have seen assets under management for our ETFs increase by more than half since last year", he said.

In August, Lion Global Investors and OCBC Securities listed the Lion-OCBC Securities China Leaders ETF, Singapore's first China-focused ETF, which will pay out annual dividends to investors.

The ETF tracks the Hang Seng Stock Connect China 80 Index, which comprises 80 large Chinese companies across 12 industries.

In December last year, Lion Global and OCBC Securities launched the Lion-OCBC Securities Hang Seng Tech ETF, which is made up of the top 30 technology companies listed in Hong Kong by market capitalisation.

As at Nov 18, there were 32 ETFs listed on SGX, with assets under management totalling $12 billion, according to data from the exchange.

A version of this article appeared in the print edition of The Straits Times on November 24, 2021, with the headline 'UOB unit lists first Reit ETF linked to environmental performance'. Subscribe