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SPDR Straits Times Index ETF: What investors get from S’pore’s top 30 listed companies in one fund
Managed by State Street Investment Management, this exchange-traded fund gives investors access to the local blue-chip market without the need to buy individual stocks
The SPDR Straits Times Index ETF (ES3), which tracks the 30 largest constituent stocks of the Straits Times Index, offers investors an easy way to tap into Singapore’s market.
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For many Singapore investors, exchange-traded funds (ETFs) are a familiar tool. Made up of a mix of securities, they offer a simple way to build a diversified portfolio.
With ETFs, investors need not worry about picking individual stocks or tracking them closely. Instead, they can gain broad exposure to markets with a single investment, while leaving the detailed stock selection and rebalancing to the fund manager.
Some ETF investors choose to invest in equities and bonds from markets abroad, such as the US or China. Others prefer to stay closer to home, focusing on companies listed on the Singapore Exchange.
For those who prefer to invest locally, the SPDR Straits Times Index ETF (ES3) offers an easy way to tap into Singapore’s market. This ETF, managed by State Street Investment Management, tracks the 30 largest constituent stocks of the Straits Times Index (STI) and has been listed on the Singapore Exchange since April 2002.
How the SPDR Straits Times Index ETF (ES3) works
Purchasing the SPDR Straits Times Index ETF
One of the key benefits of investing in the SPDR Straits Times Index ETF is the hassle-free management it offers. When investors buy the ETF instead of the underlying stocks, they do not have to worry about the quarterly rebalances to the STI.
The fund manager will automatically adjust the portfolio to reflect changes in the index, whether it is a shift in stock weightings or a new company replacing an old one. Investing via an ETF also frees investors from having to respond to complex corporate actions like rights issues or dividend choices.
This hands-off approach eliminates the need for constant monitoring and individual stock selection, making it an ideal solution for busy investors or those new to the market.
Investing in the SPDR Straits Times Index ETF may provide a steady source of passive income as well as the potential for capital appreciation. This is because the ETF makes cash distributions to unitholders twice a year, using the dividends received from the underlying companies after deducting expenses.
Benefits of investing in an ETF that tracks the STI
Attractive valuations: The Straits Times Index’s (STI) trailing price-to-earnings ratio of 13.4 sits below regional and developed-market peers, offering value with a steadier growth profile than more volatile emerging markets.
High dividend yield: As of Oct 30, 2025, the STI offers a dividend yield of 4.34 per cent, outpacing regional peers and alternatives such as treasury bills, fixed deposits and the Central Provident Fund Ordinary Account – offering an appealing income stream in a low-interest-rate environment
Low volatility profile: The STI’s composition – dominated by bank stocks and with minimal exposure to technology – supports relatively lower volatility, making it appealing in rate cut cycles and periods of uncertainty. The index’s dividend payout ratio has remained stable, mirroring its 10-year average of 46 per cent.
Gateway to global growth: While rooted in Singapore, the STI’s constituents generate revenue across South-east Asia, Greater China and Australia. In addition, 23 out of the 30 STI companies operate beyond Asia-Pacific, with exposure to Europe and the US. This global footprint may enhance growth potential and reduce reliance on domestic cycles.
Resilient nature: Since its inception in 1998, the STI has evolved from 55 companies to the 30 largest and most liquid Singapore-listed firms. The index has weathered major global events, including the 2008 financial crisis and the Covid-19 pandemic.
Low global correlation: The STI’s moderate correlation to major indices like the Russell 1000 and FTSE Eurotop 100 underscores its resilience to global shocks and investor sentiment shifts. For investors seeking lower-beta exposure, the STI provides potential downside protection and reduced volatility.
Strengthened by recent reforms: Recent government initiatives are strengthening the Singapore equity market, including reforms to enhance returns, improve corporate-investor communications, attract quality listings, alongside the Monetary Authority of Singapore’s $5 billion initiative to rejuvenate the market. Nearly half of local companies now earn returns above their cost of equity, yet valuations remain below global peers.
How to begin investing
Investing in the SPDR Straits Times Index ETF is as simple as buying and selling any other stock on the Singapore Exchange during trading hours. As with regular stocks, the ETF holdings are deposited directly into a person’s Central Depository (CDP) account or withdrawn once the trade has been settled.
For those looking to grow their retirement nest egg using their savings in their Central Provident Fund (CPF) accounts, the SPDR Straits Times Index ETF is an eligible investment under the CPF Investment Scheme.
There is also the option to purchase the ETF using funds from a Supplementary Retirement Scheme (SRS) account.
Whether you are a new or experienced investor, the SPDR Straits Times Index ETF offers a simple, cost-effective way to invest in Singapore stocks. It can be a versatile tool for various financial goals, whether you are looking to diversify your portfolio, build a long-term retirement fund, or make tactical moves based on local market conditions.
Learn more about the SPDR Straits Times Index ETF (ES3).
State Street Global Advisors (SSGA) is now State Street Investment Management. Please go to statestreet.com/investment-management for more information.
State Street Global Advisors Singapore Limited (“SSGA”), 168, Robinson Road, #33-01 Capital Tower, Singapore 068912 (Company Reg. No: 200002719D, regulated by the Monetary Authority of Singapore). T: +65 6826-7555. F: +65 6826-7501.
All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone.
The prospectus in respect of the offer of the units (the “Units”) in the SPDR® Straits Times Index ETF (the “Fund”) is available and may be obtained upon request from State Street Global Advisors Singapore Limited (”SSGA”, Company Registration number: 200002719D). Investors should read the prospectus before deciding whether to acquire Units in the Fund. The value of Units and the income accruing to such Units may fall or rise. Units in the Fund are not obligations of, deposits in, or guaranteed by, SSGA or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Past performance figures are not necessarily indicative of future performance of the Fund. Investors have no right to request SSGA to redeem their Units while the Units are listed. It is intended that holders of Units may only deal in their Units through trading on the Singapore Exchange Securities Trading Limited (”SGX-ST”). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
Diversification does not ensure a profit or guarantee against loss. Past performance is not necessarily indicative of the future performance.
Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.
The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your tax and financial advisor.
This advertisement or publication is intended solely for audiences in Singapore and has not been reviewed by the Monetary Authority of Singapore.
For more risk information, please visit statestreet.com/im/sg
