Which STI ETF Is Better? Expert Comparison and Insights [2025]

Finding the best STI ETF can feel overwhelming with so many choices and so much financial jargon out there. Statistics show that over 50% of new investors in Singapore choose ETFs like the Nikko AM Singapore STI ETF or SPDR STI ETF for their low fees and straightforward access to the Straits Times Index, according to Singapore Exchange (SGX).

The better STI ETF usually depends on my investing goals, fee sensitivity, and trading flexibility, but the Nikko AM Singapore STI ETF often stands out for its slightly lower fees and higher trading volume compared to other options. If you’re torn between different STI ETFs, you’re not alone—many investors compare these choices to find the best fit for their portfolio and risk level.

Understanding the differences between major STI ETFs can help me avoid common mistakes and make smarter investment decisions. With the right info, I can confidently choose an ETF that matches my needs and takes advantage of long-term market growth.

Key Takeaways

• Picking the best STI ETF depends on fees, volume, and investment goals.
• Nikko AM and SPDR are the main STI ETF options in Singapore.
• Knowing key features helps avoid common investing mistakes.

Which STI ETF Is Better?

When I look at STI ETFs, I’m talking about exchange traded funds that track the Straits Times Index. These funds let me invest in a group of the largest Singapore companies with just one purchase.

The main STI ETFs in Singapore are the SPDR Straits Times Index ETF and the Nikko AM Singapore STI ETF. Both aim to follow the same index but may have small differences.

Key features of STI ETFs:

• Low management fees
• Easy to buy and sell through the stock market
• Built-in diversification (covers many companies)
• Tracks the performance of the Singapore economy

I find it helpful to compare the fees, liquidity, and tracking accuracy. For example, some ETFs may have slightly lower costs or higher trading volumes.

To choose which STI ETF is better for me, I usually consider my investment goals and trading preferences. Both options are strong, but one may suit my needs better based on these factors.

For more about different types of ETFs and how they work, I can check The ETF Book.

Benefits of STI ETF?

When I look at STI ETFs, I see a good way to invest in the Singapore stock market. These funds let me buy many top companies in Singapore with just one trade. This gives my money instant exposure to the country’s economy.

Diversification is a big advantage. With an STI ETF, my risk is spread across different sectors like banking, property, and industry. If one company does badly, it doesn’t hurt my whole investment as much.

STI ETFs also stand out for their liquidity. Most of these funds are traded often on the Singapore Exchange, so I can buy or sell my shares easily at market prices.

Another benefit is dividend income. Many companies in the STI pay dividends. By holding an STI ETF, I get dividends too, which can be a steady source of cash flow.

Here’s a quick look at benefits in table form:

If I want a simple and cost-effective way to join the Singapore stock market, STI ETFs make that possible. I don’t have to pick stocks one by one, which saves me time and effort.

Depending on the specific ETF, I might also get features like lower fees or higher trading volumes, making my experience smoother and less expensive. For those interested, ETFs can simplify investing and help achieve better returns, as explained in this overview of index funds and ETFs.

How Are STI ETFs Better?

When I look at STI ETFs, I focus on how closely each one matches the Straits Times Index (STI). This is called the tracking error. A lower tracking error means the ETF performs more like the main benchmark index.

I always check the expense ratio and total expense ratio. These show how much I pay each year, as a percentage of my investment. For example, an ETF with a 0.30% expense ratio will take $3 per year for every $1,000 I invest.

Below is a quick look at the main comparison points:

A bigger fund size often means the ETF is popular and may have better liquidity. I also review the management fee, since this is part of my cost and affects my returns.

When looking at annualised returns, I use it to see how the ETF has performed in past years. This helps me compare options more easily. Picking the right STI ETF is about balancing returns, costs, and how closely it matches the index. More diversified funds tend to have more stable results, as explained in The ETF Book about diversified offerings.

Common Mistakes To Avoid

When comparing STI ETFs, I notice that many investors overlook total costs. It is easy to focus only on the headline expense ratio. However, I should also check for additional fees like tracking error, trading costs, and bid-ask spreads.

A common mistake is ignoring liquidity. If I choose an ETF with low trading volume, I might struggle to buy or sell my units at a fair price.

Here are some key mistakes to avoid:

• Focusing only on past performance
• Forgetting to check the fund size
• Ignoring the actual stocks each ETF holds
• Overlooking differences in distribution policy (accumulating vs. distributing)

Another issue is chasing performance. Just because an ETF did well last year does not mean it will keep outperforming. As discussed by experts like Jack Bogle, too much trading based on past trends is risky and may harm real returns. More on this can be found in books like The ETF Book.

I avoid treating all ETFs as the same. Even if two ETFs follow the STI index, there can be small but important differences in how they work, what they cost, and how they are managed.

Staying mindful of these common errors helps me make confident and smart decisions when picking the STI ETF that fits my needs.

Case Study: Which STI ETF Is Better?

When I look at the two main STI ETFs, the Nikko AM STI ETF and the SPDR STI ETF, I see they have similar goals. Both aim to match the performance of the Straits Times Index (STI). They also hold almost the same Singapore stocks.

Here is a quick comparison:

The management fee for the SPDR STI ETF is slightly lower. This can help boost long-term results, as lower fees mean more money stays invested.

Dividends get paid out more often with SPDR, which can matter if I want steady income. But both ETFs are known for reliable payouts.

In terms of trading volume, both are popular on the Singapore Exchange. I can easily buy or sell either one on trading days. The Nikko AM STI ETF sometimes has a lower entry price per unit, making it easy to start with small amounts.

If I prefer more frequent dividends, I might pick the SPDR STI ETF. If a slightly lower entry price helps my budget, Nikko AM STI ETF could be better. The core holdings and performance of both are very close.

Advanced Tips, Tools & Resources

When I want to compare STI ETFs, I look beyond just past performance. I check the fund managers, like State Street Global Advisors and Nikko Asset Management, because their track record and service quality can affect returns over time.

I use financial websites and interactive dashboards to track key data such as expense ratios, trading volumes, and liquidity. Expense ratios can be found easily in fund factsheets. Lower fees may lead to higher net returns over the long term.

Here are some tools I find helpful:

• SGX ETF Screener
• Interactive brokers’ comparison tools
• Official fund websites for Nikko AM and State Street Global Advisors

I also look into advanced metrics like tracking error, bid-ask spread, and tracking difference. These show how closely the ETF follows the STI and how much it costs to trade.

When analyzing ETFs, I may use online resources like visual ETF guides or advanced ETF handbooks.

Below is a simple table I use for quick comparison:

It’s important for me to read up on ETF basics and stay updated using books like the ETF Book for a broader understanding.

Conclusion & Next Steps

Both STI ETFs come with their own strengths. Depending on my needs, I may prefer one for its lower fees or the other for its higher liquidity.

If my main goal is cost, I would focus on the ETF with the lowest expense ratio. If I want easier trading, I would look for an ETF with higher trading volume.

Key questions I ask myself:

• Am I looking for long-term growth or do I want to trade often?
• Does lower cost matter more to me, or is liquidity more important?
• Do I want an ETF domiciled in Singapore or abroad?

Here’s a quick comparison:

Before I make my choice, I check the fund fact sheets, review past performance, and read the latest market updates. I also consider my own investment goals.

If I am unsure, I would start by investing a small amount and watching how the ETF performs. I keep learning and adjusting based on my experience and needs.

When I am ready, I use a brokerage platform that offers competitive fees and an easy-to-use interface. Staying informed helps me make better decisions in the future.

Frequently Asked Questions

I have studied both the Nikko AM STI ETF and the SPDR STI ETF, comparing their differences and advantages. These questions help explain their performance, what companies make up the index, and how to think about investing in STI-tracking ETFs.