Last updated: June 2026
Ringkasan / Summary
The Straits Times Index (STI) is Singapore’s benchmark stock market index, tracking the 30 largest companies listed on the Singapore Exchange (SGX). In February 2026, the STI made history by surpassing the 5,000 mark for the first time. For investors looking to gain exposure to Singapore’s equity market, STI ETFs offer a simple, low-cost way to invest in the entire index through a single trade. This guide covers everything you need to know about STI ETFs in 2026 – from how they work and how to buy them, to comparing the two main options available on SGX.
What Is the STI ETF?
An STI ETF (Exchange-Traded Fund) is a fund that tracks the performance of the Straits Times Index. Instead of buying shares in all 30 STI constituent stocks individually, you can purchase a single ETF unit that holds a diversified basket of these companies. The ETF aims to replicate the index’s returns, making it one of the easiest ways for retail investors to participate in Singapore’s stock market.
The Straits Times Index is a market-capitalisation-weighted index managed by FTSE Russell in partnership with SGX. It includes Singapore’s 30 largest and most liquid listed companies across sectors such as banking, real estate, telecommunications, and industrials. The three Singapore banks – DBS Group, OCBC Bank, and UOB – collectively account for approximately half of the index’s total weight.
As of early 2026, the STI constituents include major names like DBS Group Holdings, OCBC Bank, United Overseas Bank, Singtel, CapitaLand Investment, CapitaLand Ascendas REIT, and many others that form the backbone of the Singapore economy.
How the STI ETF Works
An STI ETF works by pooling money from many investors to buy the underlying stocks that make up the Straits Times Index. The fund manager purchases shares in each constituent company in proportion to its weight in the index. When you buy one unit of an STI ETF, you effectively own a tiny slice of all 30 companies in the STI.
Index Tracking
STI ETFs use a strategy called full replication or partial replication to mirror the index. Full replication means the fund buys all 30 stocks in the exact same proportions as the index. Partial replication may hold a subset of stocks while using derivatives or other methods to approximate the index’s returns. Both Nikko AM and Lion-OCBC STI ETFs closely track the STI’s performance, with minimal tracking error.
Dividends and Distributions
Many STI constituent companies pay regular dividends. The ETF collects these dividends and distributes them to unit holders, typically on a semi-annual basis. The STI ETF dividend yield generally ranges between 2.5% and 4% per annum, depending on market conditions and the dividend policies of the underlying companies. This makes STI ETFs attractive to income-focused investors as well as those seeking capital appreciation.
Liquidity and Trading
Both major STI ETFs are listed on the SGX and trade during regular market hours (9:00 am to 5:00 pm SGT, Monday to Friday). You can buy and sell units just like individual stocks through any brokerage account that has access to SGX. The ETFs are highly liquid, meaning there is usually a tight bid-ask spread, making it easy to enter and exit positions at fair market prices.
Types of STI ETFs: Nikko AM vs Lion-OCBC
There are two main STI ETFs listed on the Singapore Exchange. While both track the same index, they differ slightly in their fees, fund size, and history.
| Feature | Nikko AM STI ETF (G3B.SI) | Lion-OCBC Securities STI ETF (ES3.SI) |
|---|---|---|
| Full Name | Nikko AM Singapore STI ETF | Lion-OCBC Securities Singapore STI ETF |
| SGX Code | G3B | ES3 |
| Index Tracked | Straits Times Index (STI) | Straits Times Index (STI) |
| Inception Year | 2002 | 2009 |
| Fund Manager | Amova Asset Management (formerly Nikko AM) | Lion Global Investors |
| Total Expense Ratio (TER) | Approximately 0.30% p.a. | Approximately 0.25% p.a. |
| Fund Size (AUM) | Larger (typically above SGD 1 billion) | Smaller but growing |
| Replication Method | Full replication | Full replication |
| Dividend Distribution | Semi-annual | Semi-annual |
| Minimum Investment | 1 unit (SGX board lot = 100 units) | 1 unit (SGX board lot = 100 units) |
| Brokerage Platforms | All SGX brokers (moomoo, Tiger, POEMS, Saxo, etc.) | All SGX brokers |
The Nikko AM STI ETF is the older and larger of the two, having been launched in 2002. It is managed by Amova Asset Management (formerly known as Nikko Asset Management). Its larger fund size generally means tighter bid-ask spreads and higher trading volume.
The Lion-OCBC Securities STI ETF, launched in 2009, offers a slightly lower expense ratio at around 0.25% per annum compared to Nikko AM’s 0.30%. For cost-conscious investors who plan to hold for the long term, even this small difference in fees can add up over time.
How to Buy STI ETF: Step-by-Step Guide
Buying STI ETF units in Singapore is straightforward. Here is a step-by-step walkthrough:
Step 1: Open a Brokerage Account
To trade STI ETFs on the SGX, you need a brokerage account. Popular options include moomoo Singapore, Tiger Brokers, Saxo, Phillips Securities (POEMS), and OCBC Securities. Many platforms offer commission-free trading for SGX-listed ETFs or charge very low fees. Choose a platform that suits your trading frequency and capital size.
Step 2: Fund Your Account
Deposit Singapore Dollars (SGD) into your brokerage account via bank transfer, FAST transfer, or PayNow. Most brokers have no minimum deposit requirement, but you will need enough to cover at least one board lot (100 units) of the ETF plus transaction fees.
Step 3: Search for the ETF
Look up the ETF by its SGX ticker code – either G3B (Nikko AM STI ETF) or ES3 (Lion-OCBC Securities STI ETF). Check the current price, bid-ask spread, and trading volume before placing your order.
Step 4: Place Your Order
Decide how many units you want to buy. The SGX board lot size for both STI ETFs is 100 units. You can place a market order (execute immediately at the best available price) or a limit order (execute only at your specified price or better). For most retail investors, a limit order is recommended to control your entry price.
Step 5: Monitor and Hold
Once your order is filled, the ETF units will appear in your brokerage account. You can hold them for as long as you wish. Many financial advisors recommend a buy-and-hold approach for index ETFs, as this strategy historically outperforms frequent trading over the long term.
Tip: If you are a CPF member, you may consider using your Ordinary Account (OA) savings to invest in STI ETFs through the CPF Investment Scheme (CPFIS). However, note the additional fees and restrictions that apply. Check the CPF website for the latest details.
STI ETF Performance and Returns
The STI ETF’s performance directly reflects the Straits Times Index. After years of relatively flat returns, the STI saw a significant rally in 2025-2026, surpassing the 5,000 mark in February 2026 for the first time in its history. This milestone was driven by strong performances from the three major banks and broader market optimism.
Historical Returns
Over the past decade, the STI has delivered annualised total returns (including dividends) of approximately 5% to 7%. The index experienced notable drawdowns during the COVID-19 pandemic in 2020 and the global market volatility of 2022, but has since recovered strongly.
STI ETF Dividend Yield
One of the attractive features of STI ETFs is the regular dividend income. The STI ETF dividend yield has historically ranged between 2.5% and 4% per annum. This is largely driven by the banking sector, as DBS, OCBC, and UOB are among the highest-yielding major bank stocks globally. For investors seeking steady income alongside capital growth, the STI ETF offers a compelling proposition.
It is worth noting that dividend yields can vary significantly from year to year, influenced by corporate earnings, economic conditions, and the Monetary Authority of Singapore’s policies.
STI ETF vs S&P 500 ETF
Many Singapore investors compare the STI ETF with the S&P 500 ETF when deciding where to allocate their capital. Both are broad market index funds, but they differ in several important ways.
| Factor | STI ETF | S&P 500 ETF (e.g., VOO, SPY) |
|---|---|---|
| Index | Straits Times Index (30 stocks) | S&P 500 (500 stocks) |
| Market | Singapore | United States |
| Currency | SGD | USD |
| Sector Weighting | Heavily weighted to banks and financials (~50%) | More diversified across technology, healthcare, financials |
| 10-Year Annualised Return | Approximately 5-7% | Approximately 10-13% |
| Dividend Yield | 2.5-4% | 1.3-1.8% |
| Fund Access (SGD) | Direct on SGX | Via SGX-listed wrappers or US brokerage |
| Currency Risk | None (SGD-denominated) | USD exposure – FX risk for SGD-based investors |
| Tax on Dividends | No dividend withholding tax | 30% US withholding tax on dividends (unless using CPFIS) |
The S&P 500 has historically outperformed the STI in terms of total returns, driven largely by the strong performance of US technology companies. However, the STI ETF offers higher dividend yields and the added benefit of no currency risk for Singapore-based investors. Additionally, there is no dividend withholding tax on STI ETF distributions, whereas US dividends are subject to a 30% withholding tax for individual investors.
A balanced approach for many Singapore investors is to hold both STI ETFs and S&P 500 ETFs, achieving geographical diversification while maintaining exposure to the local market. For more details, check our guide on best S&P 500 ETFs for Singapore investors.
Pros and Cons of Investing in STI ETFs
Pros
- Diversification: Instant exposure to 30 of Singapore’s largest companies with a single purchase.
- Low Cost: Total expense ratios of 0.25% to 0.30% are significantly cheaper than actively managed funds.
- Dividend Income: Regular semi-annual distributions with yields typically between 2.5% and 4%.
- No Withholding Tax: Unlike US ETFs, STI ETF dividends are not subject to withholding tax for Singapore tax residents.
- Liquidity: High trading volumes on SGX make it easy to buy and sell at fair prices.
- Transparency: ETF holdings are disclosed daily, so you always know what you own.
- Simplicity: No need to research individual stocks or time the market.
Cons
- Sector Concentration: The STI is heavily weighted towards banks and financials, which can amplify volatility during banking sector stress.
- Limited Global Exposure: The STI only covers Singapore-listed stocks, missing out on growth opportunities in the US, China, and other markets.
- Lower Growth Potential: Compared to growth-oriented indices like the S&P 500 or NASDAQ, the STI’s returns have been more modest over the past decade.
- Tracking Error: While minimal, there can be slight differences between the ETF’s performance and the actual index.
- Management Fees: Even at 0.25-0.30%, fees erode returns over very long holding periods.
Who Should Invest in STI ETFs?
STI ETFs are suitable for a wide range of investors. Here are some profiles that may benefit the most:
- Beginner Investors: If you are new to investing and want a simple way to start building wealth, STI ETFs provide instant diversification without requiring deep stock-picking knowledge.
- Long-Term Investors: A buy-and-hold strategy with STI ETFs has historically delivered solid returns with dividends reinvested. This is ideal for those saving for retirement or long-term financial goals.
- Income Seekers: With dividend yields between 2.5% and 4%, STI ETFs provide a reliable income stream, making them suitable for retirees or those seeking passive income.
- CPF Investors: STI ETFs are available under the CPF Investment Scheme, allowing Singaporeans to invest their Ordinary Account savings for potential long-term growth beyond the 2.5% OA interest rate.
- Portfolio Diversifiers: Investors with significant exposure to US or global markets may add STI ETFs to balance their portfolio with Singapore-focused assets.
Frequently Asked Questions (FAQ)
What is the STI ETF and how does it work?
The STI ETF (Exchange-Traded Fund) is a fund that tracks the Straits Times Index, which comprises the 30 largest companies listed on the Singapore Exchange. When you buy units of an STI ETF, you are essentially investing in a diversified basket of these 30 stocks in proportion to their index weight. The ETF collects dividends from the underlying companies and distributes them to investors, typically on a semi-annual basis.
Which STI ETF should I buy – Nikko AM or Lion-OCBC?
Both ETFs track the same Straits Times Index and perform very similarly. The main differences are the expense ratio and fund size. The Lion-OCBC Securities STI ETF (ES3) has a slightly lower expense ratio of approximately 0.25% compared to the Nikko AM STI ETF (G3B) at approximately 0.30%. The Nikko AM ETF is older and has a larger fund size, which may result in slightly tighter bid-ask spreads. For most investors, the difference is negligible. Choose based on your broker’s availability and your preference for fees versus liquidity.
How much do I need to invest in STI ETF?
The SGX board lot size for both STI ETFs is 100 units. As of mid-2026, one unit of the Nikko AM STI ETF trades at approximately SGD 3.00 to SGD 3.50, meaning a minimum investment of around SGD 300 to SGD 350 per board lot. However, you should also factor in brokerage commissions, which vary depending on your broker. Some platforms offer commission-free trading for SGX ETFs, making it even more accessible for small investors.
Can I buy STI ETF using CPF funds?
Yes, STI ETFs are listed under the CPF Investment Scheme (CPFIS) and can be purchased using your Ordinary Account (OA) savings. However, there are specific fees and restrictions that apply. Investing with CPF funds means you forgo the guaranteed 2.5% per annum interest on your OA savings, so the ETF investment must outperform this rate to be worthwhile. Check the CPF website for the full list of eligible funds and applicable charges.
What is the STI ETF dividend yield in 2026?
As of 2026, the STI ETF dividend yield is approximately 2.5% to 4% per annum. This yield is primarily driven by the banking sector, with DBS, OCBC, and UOB paying substantial dividends. The actual yield can vary depending on the ETF’s price and the dividends declared by the underlying companies. Distributions are typically made semi-annually. It is important to note that past dividend yields are not guaranteed and may change based on market and economic conditions.
Key Takeaways
- The STI ETF is the simplest way for Singapore investors to gain exposure to the 30 largest companies on the SGX through a single investment.
- The two main options are the Nikko AM STI ETF (G3B) and the Lion-OCBC Securities STI ETF (ES3), both offering low-cost, diversified exposure.
- The STI crossed the historic 5,000 milestone in February 2026, signalling strong market confidence.
- STI ETFs offer dividend yields of 2.5-4%, making them attractive for income investors.
- When compared to S&P 500 ETFs, STI ETFs offer higher yields and no dividend withholding tax but lower historical capital gains.
- Both ETFs can be purchased through any SGX-connected brokerage with a minimum investment of around SGD 300 per board lot.
- A long-term, buy-and-hold approach is recommended for maximum benefit from STI ETF investing.
Conclusion
STI ETFs remain one of the most accessible and cost-effective investment options for Singapore-based investors in 2026. With the Straits Times Index hitting record highs and two reliable ETF choices available on the SGX, there has never been a better time to consider adding Singapore equity exposure to your portfolio. Whether you are a beginner looking to start your investment journey, or a seasoned investor seeking to diversify, the STI ETF offers a balanced combination of growth potential, dividend income, and simplicity.
Remember to consider your individual risk tolerance, investment timeline, and financial goals before making any investment decisions. Past performance is not indicative of future results, and all investments carry risk.