How to Invest in ETFs in Singapore
In the dynamic world of investment, exchange-traded funds (ETFs) have emerged as a powerful tool for building wealth. They offer a unique blend of diversification, cost-effectiveness, and ease of trading. With the rise of digital platforms like the moomoo app, ETF investment has become more accessible than ever.
What is an ETF & How it Works
An ETF, or Exchange Traded Fund, is an investment fund. ETFs are listed on stock exchanges, just like individual stocks. Investors' money is pooled together, and this combined amount is then invested according to the specific investment objective stated by the ETF. Choosing between ETFs and individual stocks is a crucial decision that depends on various factors
Many ETFs are designed to track the performance of a specific index, such as the NASDAQ-100 or the Dow Jones Industrial Average. The fund manager uses a strategy to replicate the index as closely as possible. While some ETFs follow an active management strategy. In this case, the fund manager makes decisions about which assets to buy and sell based on their research and market outlook.
Essentially, it provides a way for individuals to invest in a diversified portfolio with relatively low costs and with the ease of trading like a stock. ETFs offer investors a convenient way to gain exposure to a diversified portfolio of assets.
Major Types of ETFs in Singapore
ETFs have become increasingly popular investment tools in Singapore due to their diversification benefits and ease of trading. You can visit ETFs vs. Mutual Funds if you are interested in this topic. There are several major types of ETFs, each with distinct characteristics and investment focuses, catering to the diverse needs of investors.
Equity ETFs: These ETFs mainly focus on stocks, including broad-market ones that track the overall market, sector-specific ones targeting particular industries, and international ones that enable investors to participate in overseas stock markets.
Bond ETFs: They mainly invest in bonds. Government Bond ETFs invest in government-issued bonds with relatively lower risk, while Corporate Bond ETFs invest in corporate bonds, which may offer higher yields but come with increased risks.
Commodity ETFs: They mainly revolve around commodities. There are ETFs that track precious metals like gold and silver, as well as those that focus on energy-related commodities such as oil and natural gas, and their values are affected by fluctuations in commodity market prices.
Currency ETFs: Single-currency ETFs can provide exposure to a specific foreign currency, and Currency-edged ETFs are designed to reduce the impact of currency fluctuations on international investments.
Specialty ETFs: They are composed of leveraged and inverse ETFs, aiming for higher returns with higher risks due to leverage effects.
Factor ETFs: These ETFs target specific investment factors like value, growth, or volatility (also known as Smart Beta) to construct portfolios.
Sustainable ETFs: They focus on companies with outstanding environmental, social, and governance (ESG) practices.
Why Invest in ETFs in Singapore
In the Singapore stock market, ETFs have become an increasingly popular investment choice. This growing preference can be attributed to several key advantages that ETFs offer to both novice and seasoned investors.
Easy Buying and Selling: ETFs are listed on stock exchanges, enabling investors to buy and sell them throughout the trading day at market-determined prices. High-volume ETFs, such as those tracking major indices, have good liquidity. This means investors can quickly enter or exit positions without significant price impact.
Cost Effectiveness: Most ETFs have relatively low expense ratios compared to actively managed funds. The expense ratio covers the operating costs of the fund, including management fees. Since ETFs are passively managed in many cases (especially index-tracking ones), they have lower management costs.
Diversification: ETFs offer investors the opportunity to gain exposure to a wide range of assets. Investors spread their risk across many different stocks rather than relying on the performance of a single company by investing in ETFs.
Tax Efficiency: In Singapore, ETFs can offer tax advantages. For example, due to the structure of some ETFs, capital gains tax may be minimized.
Transparency: ETFs typically disclose their holdings on a regular basis. Investors can easily find out which stocks, bonds, or other assets are in the ETF's portfolio. This transparency allows investors to make informed decisions.
Is Investing in ETFs Right for You?
Before deciding whether to invest in ETFs, you need to fully understand and evaluate the following tips:
Potential Returns and Risks: Seek potential high returns, but also be prepared for the possibility of losing all or a significant portion of your investment.
Be Prepared for Long-term Investment: Be ready for your funds to be tied up for a long period. Generally, a longer investment horizon is preferred to cope with short-term price fluctuations. However, depending on an investor's objective, some ETFs may be suitable for short-term trading.
Understand Return Calculation and Influencing Factors: Understand how returns are calculated and what factors can affect them.
How to Invest in ETFs in Singapore
With the right knowledge and approach, ETFs offer an accessible path to diversify your portfolio, manage risks, and potentially achieve significant returns. In this section, we will walk you through the essential steps to successfully invest in ETFs in Singapore.
Investing in ETFs (Exchange-Traded Funds) in Singapore involves 5 steps:
Open a Brokerage Account
Look for a reputable stock broker in Singapore. Consider factors such as trading fees, account minimums, available research and tools, and customer service. Some well-known brokerages offer low-cost trading options, while others provide comprehensive investment research and advisory services.
Moomoo Singapore is a popular choice for ETF investment in Singapore. Moomoo APP tops the download list in Singapore, demonstrating its popularity. It serves as a subsidiary of Futu Holdings Ltd., a Nasdaq-listed company, which reflects its credibility and strength in the financial sector.
Don't miss the opportunity to open an account on moomoo Singapore and start your investment journey today!
Set Investment Goals
Determine whether you are investing in the short-term or the long-term. Short-term goals may require more liquid and less volatile ETFs, while long-term goals can accommodate higher-risk and higher-return ETFs.
Define your financial goals precisely. If you aim to accumulate a certain amount of wealth by a particular age, calculate how much you need to invest regularly in ETFs to achieve that goal.
Regular Savings Plans for ETF Investments (Optional)
Regular Savings Plans (RSPs) offer significant benefits when investing in ETFs. With RSPs, investors can make periodic and automated investments into selected ETFs. This systematic approach helps to average out the cost of investment over time, reducing the impact of market volatility. It also instills a disciplined savings habit, enabling investors to gradually build a diversified ETF portfolio without the need to constantly monitor and time the market. In essence, RSPs provide a convenient and effective way for investors to steadily grow their ETF investments.
Here are 4 steps to set up your RSP with moomoo Singapore:
Step 1: Choose the Indices. Select from a broad selection of US stocks and ETFs.
Step 2: Select Your Account. Set up automatic transfers either from your bank account or your moomoo universal account.
Step 3: Set Your Investment Amount. You can start investing with as little as USD $5 or SGD $10 in fractional shares.
Step 4: Choose Your Frequency. Decide whether you want to invest daily, weekly, bi-weekly, or monthly, depending on what suits you best.
Select the Right ETFs
Analyze the ETFs you are interested in. Look at the underlying assets of the ETF. Check their financial health, growth prospects, and industry trends. If it is a bond ETF, consider the credit quality of the bonds, the interest rate environment, and the maturity profile of the bond portfolio. How to choose the right ETFs for your portfolio investment in Singapore?
Review the historical performance of the ETF. While past performance does not guarantee future results, it can give you an idea of how the ETF has behaved in different market conditions.
Place Your Order
Understand the different order types available. Market orders are executed immediately at the current market price, but the execution price may vary. Limited orders allow you to set a specific price at which you want to buy or sell the ETF.
Place your order through your brokerage's trading platform. After placing the order, monitor its execution. Some brokerages provide real-time order status updates, like moomoo Singapore.
Regular Monitoring and Review
Keep an eye on your ETF investments. Monitor changes in the market conditions, the performance of the ETFs, and any news or events related to the underlying assets. Periodically review your entire investment portfolio. Rebalance your portfolio if necessary.
Steps & Tips for Choosing the Right ETFs
Nowadays, ETFs have emerged as a popular portfolio investment for both novice and seasoned investors. With thousands of options available, selecting the right ETFs can seem daunting. This guide aims to simplify the process by providing clear steps and practical tips to help you make informed decisions.
Here are the key steps and tips to guide you through the process:
Assess Your Risk Tolerance
Understand how much risk you're comfortable with. Riskier ETFs, like those tracking emerging markets or sectors with high volatility, can potentially offer higher returns but also come with greater fluctuations. On the other hand, if you have a low tolerance for risk, bond ETFs or those tracking stable, large-cap stocks in developed economies might be more suitable. You can use online risk assessment tools like moomoo Singapore to gauge your risk appetite accurately.
Research the Underlying Assets
Look closely at what the ETF holds. A technology-focused ETF will behave very differently from one that tracks consumer staples. Ensure the underlying assets align with your investment goals and risk tolerance. Check the fund's holdings regularly as they can change over time. For example, before investing in ETFs, you should thoroughly understand the associated risks and regulatory landscape.
Examine the Expense Ratio
The expense ratio is the annual fee charged by the ETF provider. Even a seemingly small difference in expense ratios can significantly impact your returns over the long term. Compare similar ETFs and opt for those with lower expense ratios, as this means more of your investment is working for you rather than going towards fees.
Consider the ETF's Liquidity
Liquidity matters as it determines how easily you can buy or sell the ETF. Highly liquid ETFs have tight bid-ask spreads and large trading volumes. This is especially important if you plan to trade frequently. Illiquid ETFs can be difficult to exit from quickly and may result in higher trading costs. You can check trading volumes and bid-ask spreads on financial news platforms or your brokerage account.
Look at the Track Record
Although past performance doesn't guarantee future results, it can give you some insights. Analyze how the ETF has performed over different market cycles, such as during bull and bear markets. A consistently performing ETF might be a more reliable choice than one with erratic returns even if it doesn't always top the charts. For instance, investors are increasingly looking at AI ETFs to capitalize on the growth potential of artificial intelligence companies.
TOP 8 ETFs for Singapore Investors in 2025
In the ever-evolving financial landscape of 2025, Singapore investors are presented with a plethora of options to grow their wealth. For Singapore investors, ETFs offer diverse investment opportunities. You can discover the top ETF Investments in Singapore if you are interested in this topic.
1. Top 8 Singapore ETFs:
ES3 (SPDR® Straits Times Index ETF)
ES3 (SPDR® Straits Times Index ETF) tracks the Straits Times Index of Singapore. This ETF is significant as it directly reflects the performance of the Singapore market. It allows investors to have broad-based exposure to the local economy through a single investment.
SRT (CSOP S-REITs INDEX ETF)
SRT (CSOP S-REITs INDEX ETF) is designed to track the performance of an index related to Singapore Real Estate Investment Trusts (S-REITs). S-REITs are required to distribute a significant portion of their income as dividends. Therefore, the ETF can provide investors with a regular income stream from the rental income and other earnings of the underlying REITs.
CFA (NikkoAM-STC Asia ex Japan REIT ETF)
CFA (NikkoAM-STC Asia ex-Japan REIT ETF) is an exchange-traded fund (ETF) that focuses on real estate investment trusts (REITs) in Asia, excluding Japan. It's managed by Nikko Asset Management. REITs typically generate income from rent and may also appreciate in value over time. This ETF provides investors with the potential to benefit from both the income stream (in the form of dividends) and capital appreciation of the underlying REITs.
A35 (ABF Singapore Bond Index ETF)
A35 (ABF Singapore Bond Index ETF) tracks the Singapore Bond Index. It provides investors with an easy way to access the Singapore bond market. The stability of the Singapore bond market makes it a relatively safe investment option, suitable for those who prefer a more conservative investment strategy.
G3B (Nikko AM Singapore STI ETF)
G3B (Nikko AM Singapore STI ETF) tracks the Straits Times Index of Singapore. Similar to the SPDR® Straits Times Index ETF, it mirrors the performance of the Singapore market, enabling investors to diversify their portfolios with local market exposure.
MBH (Nikko AM SGD Investment Grade Corporate Bond ETF)
MBH (Nikko AM SGD Investment Grade Corporate Bond ETF) focuses on investing in SGD-denominated investment-grade corporate bonds. It offers a lower-risk investment option with a stable income. It is suitable for risk-averse investors who are looking for reliable returns.
CLR (Lion-Phillip S-REIT ETF)
CLR (Lion-Phillip S-REIT ETF) tracks the Singapore Real Estate Investment Trusts Index. Real estate investment trusts (REITs) have become popular due to their potential for regular dividends. This ETF allows Singapore investors to participate in the real estate market without directly owning properties.
HST (Lion-OCBC Securities Hang Seng TECH ETF)
HST (Lion-OCBC Securities Hang Seng TECH ETF) tracks the Hang Seng Technology Index. It provides an opportunity for Singapore investors to gain exposure to the booming Hong Kong technology sector. As the technology industry continues to grow, this ETF offers the potential for significant returns, although it also comes with the inherent risks of the tech market.
2. Top 8 US ETFs:
SPY (SPDR S&P 500 ETF)
SPY (SPDR S&P 500 ETF) is an exchange-traded fund (ETF) managed by State Street Global Advisors. It is designed to track the performance of the S&P 500 Index. SPY is highly liquid, with high trading volumes, making it easy for investors to buy and sell shares. It has a relatively low expense ratio compared to many actively managed funds.
QQQ (Invesco QQQ Trust)
The Invesco QQQ Trust is an exchange-traded fund (ETF) that tracks the performance of the Nasdaq-100 Index. It offers investors a convenient way to gain exposure to leading technology companies, which are often at the forefront of innovation and growth. Given the growth-oriented nature of many of the companies in the Nasdaq-100, QQQ has the potential for significant capital appreciation.
IWM (iShares Russell 2000 ETF)
The iShares Russell 2000 ETF (IWM) is designed to track the performance of the Russell 2000 Index. Small-cap stocks have historically shown the potential for high growth rates. IWM offers investors a way to participate in the growth of small-cap companies.
TQQQ (ProShares UltraPro QQQ ETF)
TQQQ (ProShares UltraPro QQQ ETF) is a leveraged exchange-traded fund (ETF) offered by ProShares. In a rising market, TQQQ has the potential to provide significantly higher returns compared to non-leveraged ETFs that track the Nasdaq-100, such as QQQ.
TLT (iShares 20 + Year Treasury Bond ETF)
TLT (iShares 20 + Year Treasury Bond ETF) is an exchange-traded fund managed by BlackRock. It provides investors with exposure to long-term U.S. Treasury bonds with a maturity of 20 years or more. Long-term Treasury bonds typically offer relatively stable interest payments. TLT provides investors with a regular income stream from these bond holdings.
VOO (Vanguard S&P 500 ETF)
VOO (Vanguard S&P 500 ETF) is an exchange-traded fund offered by Vanguard. It is designed to track the performance of the S&P 500 Index. VOO has a relatively low expense ratio. This means that a larger portion of an investor's money is working for them rather than being used to paying management fees.
TSLL (TSLL Direxion Daily TSLA Bull 2X Shares)
TSLL (TSLL Direxion Daily TSLA Bull 2X Shares) is a leveraged exchange-traded fund (ETF) offered by Direxion. It is designed to provide investors with leveraged exposure to the performance of Tesla (TSLA) stock. For investors who have a strongly bullish view of Tesla's short-term performance, TSLL offers the potential for amplified returns.
In conclusion, these 16 ETFs offer a wide range of investment choices for Singapore investors in 2025, each with its unique features and risk-return profiles.
Key Investment Strategies for ETFs
To truly harness the potential of ETFs, it's essential to employ strategic approaches tailored to your financial goals. This article delves into key investment strategies for ETFs, offering insights into how you can effectively position them within your portfolio.
Passive Indexing
Passive indexing is one of the most popular strategies for investing in ETFs. This approach involves tracking a specific market index, such as the S&P 500 or the Nasdaq 100. The ETF aims to replicate the performance of the index by holding the same stocks or assets in the same proportion as the index.
The main advantage of passive indexing is its low cost. Since the ETF is not actively managed, it has lower management fees and operating expenses compared to actively managed funds.
Sector Rotation
Sector rotation is a strategy that involves shifting investments among different sectors of the economy based on the stage of the economic cycle and the outlook for specific industries. The idea is to overweight sectors that are expected to outperform and underweight or avoid sectors that may underperform.
To implement sector rotation, investors analyze economic indicators, such as GDP growth, interest rates, and inflation, to determine the current phase of the economic cycle.
Tactical Asset Allocation
Tactical asset allocation involves adjusting the composition of your ETF holdings based on market conditions. This strategy seeks to capitalize on short- to medium-term opportunities by overweighting or underweighting specific sectors, regions, or asset classes.
Dividend Growth Strategy
For investors seeking income, ETFs that focus on dividend-paying stocks can be attractive. By investing in ETFs that track companies with a history of increasing dividends, you can potentially benefit from both income and capital appreciation.
Effective Risk Management for ETFs
Risk management is a crucial aspect of ETF investing. The first step in effective risk management is to understand and assess the various risks associated with ETFs. Once the risks are understood, investors can implement various strategies to mitigate them.
Understanding and Assessing Risks
Market risk: One of the primary risks is market risk, which refers to the potential for losses due to changes in the overall market conditions.
Interest rate risk: Interest rate risk is another significant factor. Bond ETFs are particularly sensitive to changes in interest rates.
Credit risk: Credit risk is also a concern, especially for bond ETFs. This risk relates to the possibility of the issuer defaulting on its debt obligations.
Liquidity risk: Liquidity risk is the risk of not being able to buy or sell an ETF at a desired price or in a timely manner. ETFs with low trading volumes may experience wider bid-ask spreads, which can increase trading costs and potentially result in losses.
Implementing Risk Mitigation Strategies
Diversification: It is a fundamental risk mitigation technique. By investing in a variety of ETFs across different asset classes, sectors, and regions, investors can reduce the impact of any single investment's poor performance on the overall portfolio.
Setting stop-loss and take-profit levels: A stop-loss order is designed to limit losses by automatically selling an ETF if its price falls below a predetermined level. Conversely, a take-profit order allows investors to lock in profits by selling an ETF when it reaches a specified target price.
Correlation analysis: Investors should be aware of the correlations between different ETFs in their portfolios. Highly correlated ETFs may move in tandem, reducing the benefits of diversification.
Invest in ETFs via Moomoo Singapore
Moomoo APP is a comprehensive financial platform that caters to the needs of both novice and experienced investors. It provides users with access to a wide range of financial markets, including stocks, ETFs, options, and more. Moomoo app offers real-time market data, advanced charting tools, and in-depth research reports to help investors make informed decisions. With a user-friendly interface, moomoo makes it easy for investors to navigate and execute trades.
For ETF investors, moomoo offers several useful features. It provides detailed information on various ETFs, including their performance history, expense ratios, and holdings. The platform also allows users to compare different ETFs and track their favorite funds. Additionally, moomoo offers alerts and notifications to keep investors updated on market movements and changes in their ETF portfolios.
Steps to invest in ETFs using moomoo APP:
Account Registration and Setup
To begin your ETF investment journey on the moomoo APP, the first step is to register an account. Download the moomoo Singapore from the official website.
Once downloaded, open the APP and click on the "Register" button. You will be prompted to enter your personal information, such as your name, email address, and phone number. Follow the on-screen instructions to complete the registration process.
Navigating to the ETF Investment Section
Once you are logged in to the moomoo APP, finding the ETF investment section is straightforward. On the home screen, you will see a menu or tab labeled "Market". Tap on this option to access the market overview page. From there, look for the "ETF" category or search for "ETF" in the search bar. This will take you to the dedicated ETF section, where you can explore various ETFs available for investment.
In the ETF section, you will find detailed information about each fund, including its name, ticker symbol, current price, performance chart, and key statistics. You can also access additional information such as the fund's holdings, expense ratio, and trading volume.
Conclusion
In conclusion, ETF investment presents a remarkable opportunity for investors in Singapore to diversify their portfolios, manage risks, and pursue financial goals. Remember, informed decisions and consistent monitoring are the keys to reaping the long-term benefits of ETF investments.
Moomoo Singapore offers a convenient and cost-effective platform for investors looking to invest in ETFs. The moomoo platform's features such as classification retrieval, holdings ranking, and real-time market data provide investors with the tools they need to make informed investment decisions.