Singapore’s equity toolkit has expanded meaningfully. Beyond direct stocks and broad-market STI trackers, traders now have listed index futures and — newer to the shelf — Leveraged & Inverse (L&I) Exchange-Traded Products (ETPs) tied to the MSCI Singapore Index.
Together, these instruments allow investors to express their views bi-directionally, and across different risk profiles.
Traditional Methods in Singapore Equity Markets
-
-
-
-
-
-
-
-
-
- Straits Times Index (STI) ETFs
- Singapore Stocks
- MSCI Singapore Index (SiMSCI) Futures
-
-
-
-
-
-
-
-
Straits Times Index (STI) ETFs
Long-term, buy-and-hold friendly
- These ETFs track the Straits Times Index, covering the 30 largest and most liquid SG companies
- The STI is sensitive to interest rates as Banks (~50%) and S-REITs (~11%) have high weightages
- Top holdings include DBS, OCBC, UOB, Singtel, Jardine Matheson, SGX, and CapitaLand Integrated Commercial Trust
- The 2 most active STI ETFs are:
- SPDR® STI ETF (ES3) │ Expense Ratio: 0.28% │ 12Mth Yield: 4.13%
- Nikko AM/Amova STI ETF (G3B) │ Expense Ratio: 0.24% │ 12Mth Yield: 4.06%
- Dividends are distributed semi-annually
- Investing in STI-tracking ETFs is simple, provides dividends, and ideal for a long-term buy-and-hold strategy
- Provides investors with instant diversification (lower single-company risk)
- Suited for investors who don’t have time to monitor news, earnings, and risks
Singapore Stocks
High-conviction bets, best for alpha
- If conviction is high, investing in single stocks provide the highest upside.
- A correct stock call typically provides the highest returns, allowing investors to beat the broader index.
- No ongoing management fee or expense ratios.
MSCI Singapore Index (SiMSCI) Futures
High beta and leverage
- The SiMSCI Index Futures is an exchange-traded derivative that provides leveraged exposure to the SiMSCI Index
- In comparison to the STI, the SiMSCI has exposure to international-listed companies like Sea Ltd and Grab Holdings
- Hence, the SiMSCI tilts more towards growth and volatility vs the STI, making it a preferred vehicle for investors seeking higher-growth and higher-beta exposure within Singapore equities
- The SiMSCI Index stands out with its exposure to international-listed constituents like Sea (~18% of index), and Grab (~3.5% of index)
- In terms of factor tilt, as seen below, the SiMSCI Index has noticeably higher exposure to growth and volatility compared to the STI. But at the cost of lower dividends
- In terms of sector exposure, the SiMSCI has a lower allocation to S-REITs than the STI
- Futures allows for bidirectional trading— providing investors with the ability to go long or short, depending on the individual’s market view or trading purpose
- Typically used for tactical hedges, leveraged bets, and event-driven strategies (e.g., earnings season)
Straits Times Index (STI) ETFs, Singapore Stocks, and MSCI Singapore Index (SiMSCI) Futures are all available on Phillip Nova 2.0.
New Method in Singapore Equity Markets
- Phillip-Nova MSCI Singapore Daily (2X) Leveraged Product (SGX: LSS)
- Expense Ratio: 8.60%
- Aims for ~2X the daily SiMSCI return
- Phillip-Nova MSCI Singapore Daily (-1X) Inverse Product (SGX: SSS)
- Expense Ratio: 6.80%
- Targets the daily inverse return of the SiMSCI
Both products are exchange-traded, futures-based, and classified in Singapore as Specified Investment Products (SIPs) that are available on Phillip Nova 2.0.
The Decay Effect
Due to the compounding effect, over multi-day holding periods, performance can diverge from simple 2X/–1X math.
Examples below all start at 100.
|
(1) Sideways/flat but volatile
|
(2) Symmetric move
|
(3) Steady uptrend
|
Ultimately, over multi-day holding periods, returns become path-dependent.
In a steady uptrend with low volatility, leveraged ETPs can work as positive compounding works favourably. However, in range-bound or whipsaw markets, decay is severe.
Hence, L&I ETPs are typically utilised as short-term tactical tools for tactical trading, market timing or hedging, not as a buy-and-hold investment.
How to Choose Which Method in Singapore Equity Markets
|
Objective |
Instrument Fit |
Products |
|
Passive long-term investing, low-cost core exposure. |
STI ETFs provide simple passive investing that provides income Minimal maintenance |
|
|
High-conviction, stock-specific alpha |
Single Singapore stocks rather than index products |
|
|
Higher leverage |
Futures contracts provide higher leverage without “decay” effect P&L is not based on % of daily movement. |
|
|
Tactical, short-term directional view on Singapore broad market |
L&I products (2X for bullish momentum; –1X for hedging short-term downside Less risk of margin call and less rollover risk, easier than futures |
|
Closing Insight: L&I ETPs Broaden The Toolkit
Phillip Nova’s MSCI Singapore L&I products fill a useful gap between cash equities/ETPs and Futures: listed, easily accessible tactical tools for expressing a market view or implementing a hedge when shorting or derivatives access is constrained. Used correctly — with awareness of daily reset and SIP suitability — they can improve execution flexibility for both retail and professional traders.
- Phillip-Nova MSCI Singapore Daily (2X) Leveraged Product (SGX: LSS)
- Phillip-Nova MSCI Singapore Daily (-1X) Inverse Product (SGX: SSS)
Phillip Capital’s POEMS Global MY 3.0 Platform offers a comprehensive suite of tools to support your trading journey:
- Personalised Interface: Tailor your trading environment to suit your preferences.
- Integrated Trading Tools: Access real-time analytics and live charts for informed decision-making.
- Multi-lingual Support: Benefit from assistance in various languages, catering to international investors.
Explore Phillip Capital’s platforms and tools and implement these insights effectively.
