About a year ago, we made the decision to invest $1,000 every month on Lion-Phillip S-REIT ETF after it was announced in the Singapore Budget 2018 that REIT ETFs will be able to enjoy tax transparency (withholding tax of 17%) - New Singapore Budget, New REIT Strategy!
We have sold all 12,000 units of Lion-Phillip S-REIT ETF after doing a review and concluded that it is unable to meet our target dividend yield of 5%. After holding it for 300+ days and including all the dividends collected, the total annualized return should be around ~7-10%. Seems like there is a bug with the computation of average days leading to incorrect annualized return...
The tax transparency took effect on or after 1st July 2018 and I have been waiting for the latest dividend to make a more accurate estimation of its yield. The latest dividend that was declared in January 2019 for the period from 01/08/2018 to 31/12/2018 (153 days) was $0.0211. The annualized dividend will be ($0.0211 / 153 * 365) ~ $0.05034.
Using the 52 weeks high and low price, the dividend yield will be between the following:
The expense ratio was unavailable in the initial prospectus (indicated to be around 0.5%) but can now be seen in their Semi-Annual Report and it turns out to be higher at 0.59%. In addition, it does not include brokerage and other transactions costs. Now if we were to look at the portfolio turnover ratio, it is also very high at 34.01%. The portfolio turnover ratio is a measure of how frequently assets within a fund are bought and sold by the managers. Let's compare this with SPDR STI ETF ratios.
In comparison, both the expense ratio and the portfolio turnover ratio of Lion-Phillip S-REIT ETF are much higher. With such a high portfolio turnover ratio, the brokerage fees involved should be quite significant but is not reflected in the expense ratio.
Interestingly, with the high turnover ratio, Lion-Philip S-REIT ETF still has a higher tracking error as compared to SPDR STI ETF based on data from trackinsight.
If you think STI ETF isn't a fair comparison, you can take a look at the tracking error/difference for the other 2 REITs ETF:
- Phillip SGX APAC Dividend Leaders REIT ETF
- Nikko AM StraitsTrading Asia ex Japan REIT ETF
It just didn't look like a well-managed ETF with a relatively high (hidden) cost.
Bye Lion-Phillip S-REIT ETF!
Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)
We have sold all 12,000 units of Lion-Phillip S-REIT ETF after doing a review and concluded that it is unable to meet our target dividend yield of 5%. After holding it for 300+ days and including all the dividends collected, the total annualized return should be around ~7-10%. Seems like there is a bug with the computation of average days leading to incorrect annualized return...
The tax transparency took effect on or after 1st July 2018 and I have been waiting for the latest dividend to make a more accurate estimation of its yield. The latest dividend that was declared in January 2019 for the period from 01/08/2018 to 31/12/2018 (153 days) was $0.0211. The annualized dividend will be ($0.0211 / 153 * 365) ~ $0.05034.
Using the 52 weeks high and low price, the dividend yield will be between the following:
High: 1.042 ---> 0.05034 / 1.042 ~ 4.83%
Low: 0.944 ---> 0.05034 / 0.944 ~ 5.33%
The expense ratio was unavailable in the initial prospectus (indicated to be around 0.5%) but can now be seen in their Semi-Annual Report and it turns out to be higher at 0.59%. In addition, it does not include brokerage and other transactions costs. Now if we were to look at the portfolio turnover ratio, it is also very high at 34.01%. The portfolio turnover ratio is a measure of how frequently assets within a fund are bought and sold by the managers. Let's compare this with SPDR STI ETF ratios.
In comparison, both the expense ratio and the portfolio turnover ratio of Lion-Phillip S-REIT ETF are much higher. With such a high portfolio turnover ratio, the brokerage fees involved should be quite significant but is not reflected in the expense ratio.
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| Lion-Phillip S-REIT ETF |
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| SPDR STI ETF |
- Phillip SGX APAC Dividend Leaders REIT ETF
- Nikko AM StraitsTrading Asia ex Japan REIT ETF
Bye Lion-Phillip S-REIT ETF!
Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right --> Unfortunately, you can't see it on mobile.)
