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The urgency to reduce carbon emissions is existential for humanity. As individuals and governments become more aware of the environmental impact of their actions, the transition towards more sustainable business practices will only gain momentum.
Companies that lead the sustainability wave may be rewarded with expanding business opportunities. As a result, investors are also recognising that there are potential benefits in aligning their portfolios with their values.
Listed on the SGX on 28 April 2022, the Lion-OCBC Securities Singapore Low Carbon ETF gives investors here an opportunity to access 50 environmentally conscious Singapore companies, while potentially reaping financial rewards.
This dual benefit makes sustainable investing a responsible and potentially lucrative choice for investors. Here are five key benefits of investing in Singapore’s first low carbon ETF – the Lion-OCBC Securities Singapore Low Carbon ETF.
#1 Ride on The Low-Carbon Transition Megatrend
The transition to a low-carbon economy is a significant megatrend. Governments and corporations across all sectors are increasingly committing to reducing carbon footprints.
There is a growing consumer preference for environmentally friendly products, providing growth opportunities for companies that align with these values. Similarly, financial institutions may increasingly allocate more investment capital to greener companies.
The Lion-OCBC Securities Singapore Low Carbon ETF offers investors the benefits of broad sector diversification across major business sectors.
Lion-OCBC Securities Singapore Low Carbon ETF: Sector breakdown
Source: Lion Global Investors as of 31 May 2024
#2 Support Singapore Companies That Focus On Doing Better
Supporting Singapore companies that prioritise sustainability in their operations is one way for investors to align your money to your values. The Lion-OCBC Securities Singapore Low Carbon ETF comprises Singapore companies that are committed to reducing their carbon footprint.
You don’t just gain exposure to Singapore-listed companies on SGX (76%) either, but also Singapore-domiciled businesses listed on overseas exchanges, such as the US (23%) and Hong Kong (1%).
Lion-OCBC Securities Singapore Low Carbon ETF: Breakdown by country of listing
Source: SGX Index Edge as of 31 May 2024
#3 Diversify Investment Exposure To Environmentally-Friendly Companies
In Singapore, the topic of climate change has been a hot-button issue in recent years. One of our main objectives will be to protect our existence by protecting our shoreline against rising sea levels.
The government has also set the impetus to reward businesses with low carbon footprint – in line with Singapore’s national climate goals. Carbon taxes were introduced in 2019, and is set to be raised to S$50-$80/tCO2e (short for tonne of carbon dioxide equivalent) in 2030. (Source: National Climate Change Secretariat Singapore as of 28 May 2024)
The Lion-OCBC Securities Singapore Low Carbon ETF offers diversified exposure to 50 Singapore companies that are committed to reducing their carbon footprint.
In addition to household names such as the three local banks (DBS, OCBC and UOB), Singtel, SGX and Keppel Ltd, and popular REITs (CapitaLand Integrated Commercial Trust, CapitaLand Ascendas REIT and Mapletree Industrial Trust), you also gain exposure to overseas listed companies such as Sea Ltd, Flex Ltd and Grab Holdings.*
Lion-OCBC Securities Singapore Low Carbon ETF: Top 20 constituents
No
Company Name*
% of NAV
1
Sea Ltd
9.11
2
DBS Group Holdings Ltd
7.73
3
Oversea-Chinese Banking Corp Ltd
7.27
4
United Overseas Bank Ltd
7.17
5
Flex Ltd
7.13
6
Singapore Telecommunications Ltd
6.87
7
Grab Holdings Ltd
5.21
8
Singapore Exchange Ltd
3.89
9
CapitaLand Integrated Commercial Trust
3.77
10
CapitaLand Ascendas REIT
3.60
11
Keppel Ltd
3.51
12
Yangzijiang Shipbuilding Holdings Ltd
2.55
13
Singapore Technologies Engineering Ltd
2.41
14
CapitaLand Investment Ltd/Singapore
2.16
15
Wilmar International Ltd
2.05
16
Genting Singapore Ltd
1.97
17
Mapletree Industrial Trust
1.75
18
Mapletree Logistics Trust
1.72
19
Mapletree Pan Asia Commercial Trust
1.45
20
Venture Corp Ltd
1.44
Total
82.77
Source: Lion Global Investors as of 31 May 2024
Read Also: 5 Things You Need To Know Before Investing In The Lion-Nomura Japan Active ETF (Powered by AI)
#4 Gain Exposure To Responsible Companies
Viewing their role as stewards of the future, low-carbon businesses may be better prepared for the long term and are more willing to pursue disruptive innovations.
This can have short-term benefits in the form of cost savings and improved efficiency, as well as a longer-term upside in innovation that potentially boosts profitability and performance.
According to the SGX ETF market highlights for Q4 2023, the Lion-OCBC Securities Singapore Low Carbon ETF achieved the highest returns among Singapore equities ETFs listed on SGX in 2023.
The ETF extended its performance this year – also delivering the best return among Singapore equities ETFs based on SGX ETF market highlights for Q1 2024.
Performance relative to other Singapore-focused ETFs
From Bloomberg as of 31 May 2024
2024 YTD
return
2023 return
Annualised % return since Fund’s inception^^
Lion-OCBC Securities Singapore Low Carbon ETF
7.9%
5.3%
4.7%
SPDR Straits Times Index ETF
4.8%
4.4%
4.2%
Nikko AM Singapore STI ETF
4.8%
4.9%
4.4%
Xtrackers MSCI Singapore UCITS ETF
7.7%
3.5%
1.7%
Similarity
The mentioned ETFs provide broad-based exposure to the Singapore market
Difference
The Lion-OCBC Securities Singapore Low Carbon ETF has a stronger tilt towards low carbon
Source: Bloomberg, as of 31 May 2024
^^Returns are based on NAV-NAV basis in SGD and assuming all dividends are reinvested net of all charges payable upon reinvestment. The Lion-OCBC Securities Singapore Low Carbon ETF was listed on 28 April 2022. Past performance, as well as any prediction, projection, or forecast are not necessarily indicative of future or likely performance. Opinions and estimates constitute our judgment and along with other portfolio data, are subject to change without notice. Each ETF currently adopts a direct replication strategy in tracking their respective indices. The SPDR Straits Times Index ETF and Nikko AM Singapore STI ETF track the Straits Times Index while the Xtrackers MSCI Singapore UCITS ETF tracks the MSCI Singapore Investable Market Total Return Net Index
Having embraced their responsibility to the environment, such companies may also be more likely to consider broader ethical commitments, including fair working practices and community engagement. This approach can entrench brand loyalty and long-term success.
Over time, these companies that may also lead their peers in other important areas such as technology, innovation and even talent.
Deep diving into the performance of this ETF’s top constituents. Between 1 January 2024 and 31 May 2024, its US-listed constituents such as Sea Ltd and Flex Ltd helped boost its performance.
Performance of the ETF’s top constituents**
Constituent*
In the Straits Times Index?
Country of listing
% weight in ETF portfolio
2024 YTD return
Sea Ltd
No
US
9.1%
70.9%
DBS Group Holdings Ltd
Yes
Singapore
7.7%
22.1%
Oversea-Chinese Banking Corp Ltd
Yes
Singapore
7.3%
15.0%
United Overseas Bank Ltd
Yes
Singapore
7.2%
11.2%
Flex Ltd
No
US
7.1%
53.3%
Singapore Telecommunications Ltd
Yes
Singapore
6.9%
0.4%
**Past performance is not necessarily indicative of future performance
Source: Lion Global Investors as of 31 May 2024
#5 Protect The Environment
The crux of any sustainable investment is that you get to allocate your capital to green companies – and contribute to protecting the environment.
Naturally, sustainable businesses may be in a better position to withstand adverse effects of climate change due to their long-term planning and adaptability. This can also reduce environmental risks, regulatory penalties, and the volatile future that fossil fuels face.
The Lion-OCBC Securities Singapore Low Carbon ETF gives you an opportunity to play a part in protecting the planet. Despite a much lower carbon footprint, the Lion-OCBC Securities Singapore Low Carbon ETF outperformed other Singapore-focused ETFs such as the SPDR STI ETF, Nikko AM Singapore STI ETF and the Xtrackers MSCI Singapore UCITS ETF between 28 April 2022 (ETF’s listing date) and 31 May 2024.
WACI comparisons among Singapore benchmarks
Source: SGX Index Edge as of 31 May 2024
Do Good – For Your Portfolio And The Environment
What better way to grow your portfolio than to know that you are doing good for the environment as your portfolio performance enhances.
Investing in the Lion-OCBC Securities Singapore Low Carbon ETF offers a strategic opportunity for Singapore investors to benefit financially while supporting Singapore’s low carbon efforts.
Comparing the Lion-OCBC Securities Singapore Low Carbon ETF performance to relevant benchmarks can also provide context for evaluating its success. As of 31 May 2024, it has delivered a year-to-date return of 7.9% – leading all Singapore equities ETFs listed on SGX. (Source: Bloomberg as of 31 May 2024)
Investors can also rest assured knowing that they are not sacrificing on income when investing in this ETF compared to other popular Singapore ETFs – as it pays a semi-annual dividend in June and December#. As of 31 May 2024, the Lion-OCBC Securities Singapore Low Carbon ETF dividend yield was 3.79%(Note: The dividend amount or dividend rate is not guaranteed).
Read Also: 3 Things Investors Should Know About The Lion-OCBC Securities APAC Financials Dividend Plus ETF
Invest In The Lion-OCBC Securities Singapore Low Carbon ETF
Lion Global Investors, the issuer behind the Lion-OCBC Securities Singapore Low Carbon ETF, presents a reliable option for Singapore investors looking to make a positive impact.
You can invest in the Lion-OCBC Securities Singapore Low Carbon ETF through any broker that allows trading of SGX ETFs. When doing so, you can choose to invest in either the SGD counter (SGX: ESG) or USD counter (SGX: ESU) through cash and Supplementary Retirement Scheme (SRS).
Of course, you can also dollar-cost average via OCBC BCIP, POEMS Share Builders Plan, and the iFAST Regular Savings Plan – and build up your exposure over time.
Investors in the Lion-OCBC Securities Singapore Low Carbon ETF should note that the ETF has a management fee of 0.4% per annum. For every $1,000 invested, the management fee is only around $4.
Furthermore, you can also invest in any of the other five innovative ETFs that Lion Global Investors has listed on SGX. In total, Lion Global Investors manage a combined AUM of S$919 million (Source: Lion Global Investors as of 31 May 2024) under these ETFs:
Lion-Phillip S-REIT ETF – the largest REIT ETF listed on SGX as of 31 May 2024, providing exposure to quality Singapore REITs;
Lion-OCBC Securities Hang Seng TECH ETF – the top-traded ETF in 2022 and 2023 – which gives investors exposure to the battered China tech sector through the 30 largest technology-themed companies listed in Hong Kong;
Lion-OCBC Securities China Leaders ETF – providing diversified exposure to the 80 largest Chinese companies listed in Hong Kong and/or mainland China;
Lion-Nomura Japan Active ETF (Powered by AI) – Singapore’s first active ETF, first AI-powered ETF and the only Japan-focused ETF currently on the SGX;
Lion-OCBC Securities APAC Financials Dividend Plus ETF (listed recently on 13 May 2024) – the world’s first APAC Financials ETF – offering investors a minimum 5% pa quarterly distribution in the first two years^
*Securities referenced are not intended as recommendations to buy or sell
^As set out in the prospectus, distribution payments shall, at the sole discretion of the Manager, be made out of either (a) distributable income; or (b) capital gains; or (c) capital of the Deposited Property or a combination of (a) and/or (b) and/or (c). Distributions are not guaranteed and may fluctuate. Past performance, yields, and payments are not necessarily indicative of future or likely performance, yields, and payments. Distribution payouts and its frequency might be changed at the Manager’s discretion and can be made out of distributable income, capital or both. Any payment of distributions by the fund may result in an immediate reduction of the net asset value per share/unit. The Fund seeks to invest all or substantially all of the Fund’s assets in Index Securities in substantially the same weightings as reflected in the Index. Please refer to the fund prospectus for more information on the ETF’s distribution policy. Please refer to lionglobalinvestors.com for more information on the income disclosures.
#Distributions are not guaranteed and may fluctuate. Past distributions are not necessarily indicative of future payments. Distribution payouts and its frequency might be changed at the Manager’s discretion and can be made out of income, capital or both. Any payment of distributions by the fund may result in an immediate reduction of the net asset value per share/unit. Please refer to lionglobalinvestors.com for more information on the income disclosures.
Disclaimer – Lion Global Investors Limited
This advertisement or publication has not been reviewed by the Monetary Authority of Singapore. It is for information only, and is not a recommendation, offer or solicitation for the purchase or sale of any capital markets products or investments and does not have regard to your specific investment objectives, financial situation, tax position or needs.
You should read the prospectus and Product Highlights Sheet of the Lion-OCBC Securities Singapore Low Carbon ETF (“ETF”), which is available and may be obtained from Lion Global Investors Limited (LGI) or any of the distributors and appointed Participating Dealers (“PDs”), for further details including the risk factors and consider if the ETF is suitable for you and seek such advice from a financial adviser if necessary, before deciding whether to purchase units in the ETF.
Investments in the ETF are not obligations of, deposits in, guaranteed or insured by LGI or any of its affiliates and are subject to investment risks including the possible loss of the principal amount invested. The performance of the ETF is not guaranteed and, the value of its units and the income accruing to the units, if any, may rise or fall. Past performance, payout yields and payments, as well as, any prediction, projection, or forecast are not necessarily indicative of the future or likely performance, payout yields and payments of the ETF. Any extraordinary performance may be due to exceptional circumstances which may not be sustainable. Dividend distributions, which may be either out of income and/or capital, are not guaranteed and subject to LGI’s discretion. Any such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value of the ETF. Any references to specific securities are for illustration purposes and are not to be considered as recommendations to buy or sell the securities. It should not be assumed that investment in such specific securities will be profitable. There can be no assurance that any of the allocations or holdings presented will remain in the ETF at the time this information is presented. Any information (which includes opinions, estimates, graphs, charts, formulae or devices) is subject to change or correction at any time without notice and is not to be relied on as advice. You are advised to conduct your own independent assessment and investigation of the relevance, accuracy, adequacy and reliability of any information or contained herein and seek professional advice on them. No warranty is given and no liability is accepted for any loss arising directly or indirectly as a result of you acting on such information. The ETF may, where permitted by the prospectus, invest in financial derivative instruments for hedging purposes or for efficient portfolio management. The ETF’s net asset value may have higher volatility as a result of its narrower investment focus on a limited geographical market, when compared to funds investing in global or wider regional markets. LGI, its related companies, their directors and/or employees may hold units of the ETF and be engaged in purchasing or selling units of the ETF for themselves or their clients.
The units of the ETF are listed and traded on the Singapore Exchange Securities Trading Limited (“SGX-ST”), and may be traded at prices different from its net asset value, suspended from trading, or delisted. Such listing does not guarantee a liquid market for the units. You cannot purchase or redeem units in the ETF directly with the manager of the ETF, but you may, subject to specific conditions, do so on the SGX-ST or through the PDs.
© Lion Global Investors Limited (UEN/ Registration No. 198601745D). All rights reserved. LGI is a Singapore incorporated company and is not related to any corporation or trading entity that is domiciled in Europe or the United States (other than entities owned by its holding companies).
Disclaimer – Singapore Exchange Limited
The units of the Lion-OCBC Securities Singapore Low Carbon ETF are not in any way sponsored, endorsed, sold or promoted by the Singapore Exchange Limited (“SGX”) and/or its affiliates and SGX and its affiliates make no warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index and/or the figure at which the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index stands at any particular time on any particular day or otherwise. The iEdge-OCBC Singapore Low Carbon Select 50 Capped Index is administrated, calculated and published by SGX. SGX shall not be liable (whether in negligence or otherwise) to any person for any error in the Lion-OCBC Securities Singapore Low Carbon ETF and the iEdge-OCBC Singapore Low Carbon Select 50 Capped Index and shall not be under any obligation to advise any person of any error therein.
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