Nikko AM unveils SGD bond ETF for retail investors

It will list on the SGX on 27 August.

Nikko Asset Management Asia launched the Nikko AM SGD Investment Grade Corporate Bond ETF. According to an announcement, this is the first time a Singapore dollar-denominated corporate bond exchange-traded fund (ETF) is being made available to investors.

The Nikko AM SGD Investment Grade Corporate Bond ETF has a management fee of 0.15%. It aims to replicate the performance of the iBoxx SGD Non-Sovereigns Large Cap Investment Grade Index, which returned 3.75% per annum over the last five years to June 2018.

The initial offer period (IOP) is from 23 July 2018 to 17 August 2018. In lot sizes of 100 and priced at $1.00 per unit during the IOP, the Fund gives investors access to corporate bonds from investment grade issuers.

It will list on the Singapore Exchange (SGX) on 27 August. It will comprise statutory board and investment grade corporate bonds across various sectors such as Housing Development Board, Temasek Financial, Land Transport Authority, Development Bank of Singapore (DBS), United Overseas Bank (UOB) to name a few.

Nikko AM Asia president Eleanor Seet commented, “A diversified portfolio of SGD-denominated investment grade corporate bonds is a high-quality asset class that has not always been easy to access especially for retail investors.”

“We believe that a well-developed domestic bond market will benefit both institutional and retail investors in Singapore and the region. Building on the ABF Singapore Bond Index Fund launched in 2005, this ETF creates greater and ease of access to SGD-denominated bonds and encourages participation in the Singapore bond market,” added Seet.

Nikko AM’s current ETF offerings in Singapore include the NikkoAM-StraitsTrading Asia ex Japan REIT ETF, ABF Singapore Bond Index Fund and Nikko AM Singapore STI ETF.