European asset manager Amundi, Endowus launch low-cost index fund tracking STI

[SINGAPORE] European asset manager Amundi and wealth adviser and investment platform Endowus on Wednesday (Jul 16) launched the Amundi Singapore Straits Times Index (STI) Fund.

This marks the first unit-trust-based index fund tracking the STI by a global asset manager in Singapore.

It will be available exclusively on the Endowus platform, at an all-in-one fee under an institutional share class. However, retail investors can also buy into the fund, according to Endowus.

“With no sales charges and low management fees, the fund offers another option for investors seeking growth with relatively lowered volatility compared to usual equity markets in their wealth journey,” noted the statement.

The Amundi Singapore STI fund has a total expense ratio of 0.15 per cent, to further expand the low-cost indexing investment solutions available for STI investors, said Albert Tse, CEO Amundi South Asia.

The fund does not incur additional trading costs, brokerage fees and exchange-traded expenses, Tse added.

It aims to replicate the performance of the STI, which is driven by Singapore’s banking, real estate, telecommunications and industrial sectors.

In 2024, the STI delivered total returns of 24.3 per cent, achieving its best performance in a decade, both Amundi and Endowus noted. The index maintained an average dividend yield of around 3.8 per cent over the 18-year period from January 2008 to June this year, with yields generally between 3 and 5 per cent.

This positions the fund as an option for investors seeking stable income or defensiveness, while maintaining exposure to the long-term growth potential of Singapore’s economy, they noted.

Other ETFs on the Singapore Exchange which track the STI include the Nikko AM Singapore STI ETF managed by Nikko Asset Management Asia, and the SPDR STI ETF managed by State Street Global Advisors Singapore.

The launch of the Amundi Singapore STI Fund also aligns with broader efforts by the Monetary Authority of Singapore to strengthen the local equities market. It is designed to complement various policy initiatives and incentives by attracting additional capital to benefit local enterprises, the release said.

Albert Tse, chief executive of Amundi South Asia, said: “We are proud to be the first global asset manager since the global financial crisis to launch a fund of this nature, leveraging our longstanding expertise in indexing solutions and trusted partnership with a home-grown financial platform like Endowus to deliver this to Singapore investors for SG60.”

Wong Wei Kong, editor-in-chief of the English, Malay and Tamil Media Group at SPH Media, said: “We’re delighted that the Straits Times Index will be the benchmark for Amundi’s innovative new fund. As the STI looks forward to being 60 next year, it is truly an integral part of the nation’s economic, business and market development.”