Posted inProduct News

OCBC and Lion GI plan fourth ETF listing

The dividend-focused ETF will invest in leading Apac financial institutions.

OCBC Securities and Lion Global Investors (LGI) will list OCBC Group’s fourth ETF in less than four years—the Lion-OCBC Securities Apac Financials Dividend Plus Exchange Traded Fund (ETF) – on the Singapore Exchange (SGX).

The initial offer period for the Lion-OCBC Securities Apac Financials Dividend Plus ETF starts today, 11 April 2024, and will end on 3 May 2024. The ETF will be listed on 13 May 2024 and is available in both Singapore dollars and United States dollars under the SGX tickers YLD and YLU respectively.

It tracks the iEdge Apac Financials Dividend Plus Index, an index that was developed by OCBC Securities, Lion Global Investors and SGX. It includes 30 of the largest and most tradable Apac financial institutions by free-float market capitalisation, with a focus on consistently high and sustainable dividend payouts.

The index is rebalanced semi-annually, and investors in the ETF will gain exposure to banks, insurance, and investment services companies listed in Australia, Hong Kong, Japan, Singapore, Korea, Indonesia, Malaysia, and Thailand.

Singapore’s local banks are index constituents, as well as Commonwealth Bank of Australia, KB Financial Group, China Construction Bank, Sumitomo Mitsu Financial Group and Public Bank.

The other OCBC-Lion GI collaborative ETF listings include the Lion-OCBC Securities Hang Seng TECH ETF, Lion-OCBC Securities China Leaders ETF and Lion-OCBC Securities Singapore Low Carbon ETF – which have a combined AUM of S$445m ($329m) as of 2023.

The new ETF will appeal to investors looking for consistent dividend yields, according to OCBC. Apac banks have consistently paid high dividends amounting to at least $130bn in the last two years and investors in this ETF will receive a minimum dividend payout of 5% per annum of the issue price for the first two years distributed on a quarterly basis, said OCBC.

“We expect this ETF to be well received because of its unique proposition – stable dividends, combined with the good growth prospects that stem from its Apac focus,” said Wilson He, managing director of OCBC Securities, in a statement.

“The Lion-OCBC Securities Apac Financials Dividend Plus ETF is a good building block for yield seeking investors and is an important addition to LGI’s shelf of ETF products,” added Teo Joo Wah, chief executive officer of Lion Global Investors.

The AUM of all SGX-listed ETFs almost doubled from S$5.49bn in 2019 to S$10.6 billion in 2023.

Part of the Mark Allen Group.