Markets Roar Back - Relief Rally Or Real Reversal? My Secret Weapon: STI ETF

🌟🌟🌟The market didn't just rebound on Friday, it snapped back like a rubber band that had been stretched too far.  One minute we were watching fear ripple through every asset class, the next minute everything decided to rally together like they had rehearsed it.

Stocks climbed, Big Tech charged ahead and risk appetite returned from its short vacation.

Meanwhile Spot Gold jumped 3%, Silver surged 7% and Bitcoin snapped back above USD 70,000.

It is the kind of synchronised rebound that makes everyone wonder :

Is this a genuine risk reversal or just a violent relief bounce before the next plot twist?

No one knows for sure - not the strategists, not the quants  but the signals are interesting :

Precious metals ripping suggests that liquidity is still flowing. 

Crypto's sharp recovery shows risk appetite isn't dead, just temperamental.

Equities rebounding across sectors mean panic selling has at least taken a breather. 

This isn't stability.  This isn't collapse.  This is the market doing what it does best : keeping everyone equally confused.

STI ETF : Singapore's Hidden Gem 

While the world debate macro narratives, Singapore quietly flexed its strength. 

The STI ETF $STI ETF(ES3.SI)$  hit a 52 week record high at SGD 5.11 on January 28 2026.  This ETF has seen a significant rally in early 2026, largely driven by the strong performance of its top holdings, particularly Singapore's major banks DBS, OCBC and UOB.

While the price has slightly consolidated from the January peak, STI ETF remains in a strong upward trend.  This is supported by healthy dividend payouts and positive investor sentiments towards the regional financial sector.

You maybe surprised to know that STI ETF has outperformed $SPDR S&P 500 ETF Trust(SPY)$   year todate in 2026.  This is due to a rotation out of overvalued US technology stocks into defensive, dividend rich Singapore blue chips.

Key Drivers of Outperformance for STI ETF 

Singapore Banks' Resilience : The STI is heavily weighted (approximately 50%) toward 3 major banks : DBS, OCBC and UOB.  These banks reached record highs in late January 2026, supported by delayed US interest rate cuts that sustained their net interest margins and strong wealth management inflows. 

Software Armageddon in the US:  SPY was dragged down in early February by a massive repricing of the US software sector.  Concerns that agentic AI tools are negatively affecting revenue for tech giants.  This led to a USD 1 Trillion market cap wipeout in just days and caused the S&P 500 to breach its critical 50 day moving average. 

Safe Haven Status: Amid global geopolitical tensions and US market volatility, international investors have increasingly viewed Singapore as a stable safe haven foothold in Asia. 

Government led Liquidity : The MAS SGD 5 billion Equity Market Development Programme has actively injected liquidity into the local market, boosting investor confidence and floor prices for STI components. 

Dividend Yield Advantage : The STI ETF offers a superior dividend yield of 3.5% tax free for Singaporeans.  In contrast SPY offers 1.1% dividend yield.  When you have a period of slowing global growth, STI's stable yield has attracted capital away from growth oriented US stocks. 

STI Top 10 Holdings

DBS $DBS(D05.SI)$  is the largest bank in Southeast Asia.  It provides a full range of services in consumer, corporate and investment banking, with a significant presence in Greater China, South Asia and Southeast Asia.  

OCBC $OCBC Bank(O39.SI)$  is the 2nd largest financial group in the region.  It offers an integrated "One Group" model that includes banking, wealth management under Bank of Singapore and insurance under Great Eastern. 

United Overseas Bank $UOB(U11.SI)$  A leading regional bank focused on consumer avd commercial banking.  It has a strong network across South East Asia. 

Singtel $Singtel 10(Z77.SI)$ is a global communications technology group providing mobile, data, and digital services to over 780 million mobile customers globally. 

Jardine Matheson is a diversified conglomerate with a broad portfolio across motor vehicles, property, food retailing and hospitality, primarily in South East Asia and China. 

Keppel is an asset manager and operator with expertise in sustainable urbanisation.  It focuses on infrastructure, real estate and connectivity. 

Capitaland Integrated Commercial Trust is the largest Reit listed on SGX, owning a diversified portfolio of high quality retail and office properties in Singapore. 

ST Engineering is a global technology, defence and engineering group specialising in the aerospace, smart city and public security segments. 

Singapore Exchange or SGX is Asia's leading multi asset exchange, providing listing, trading, clearing and settlement services.

Hongkong Land is a major listed property investment, management and development group with prime office and luxury retail assets in Hong Kong and other Asian cities. 

The above companies take up 76% of STI's index weight. 

Why I Invest In STI ETF

I invest in STI ETF as a strategic counter balance to the US market.  It is a shift away from exposure to a high growth technology sector to  a defensive income sector.  While the S&P500 is heavily concentrated in expensive tech giants, the STI ETF offers a "tech lite" alternative anchored by our local banks. 

For me personally, investing in STI ETF has been rewarding as it has delivered 73% in capital gain.  STI is Singapore's hidden gem.  It is steady, disciplined, dividend rich and quietly compounding while the world chases volatility.

Concluding Thoughts 

Short term markets are like a soap opera.   They are noisy. Long term compounding is silent and powerful. 

As the late Charlie Munger famously said

" Never interrupt the process of compounding unnecessarily."

What he means is that compounding works best when it is left alone for long stretches of time.  Every time you sell, panic or switch strategies or try to "outsmart" the market, you reset the clock.

Wealth doesn't come from brilliant moves.  It comes from uninterrupted time in the market. 

Compounding is the closest thing to financial magic but it only works if you leave it alone. 

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