$Nikko AM STI ETF(G3B.SI)$STI ETFs are one of the most popular investment products in Singapore, especially for beginners. As a long-term investment, it’s a great investment because it’s low risk and low cost. Therefore, it’s a good place to start, especially if you want to safeguard your savings from the effects of inflation. STI ETFs are only ideal for individuals prepared to hold on to investments for more extended periods.

STI means Straits Times Index (STI). This is the stock index in Singapore. The STI dates back to 1966 and has been used to track the performance of the top 30 companies that are listed on the Singapore Exchange.

These 30 firms are drawn from 19 different industries and 5 different sectors representing Singapore’s diverse economy. The index is constructed jointly by the SGX, FTSE, and Singapore Press Holdings (SPH).

Companies in this stock index include UOB, DBS, CapitaLand Limited, Singtel, and Keppel Corporation, which are among the largest businesses incorporated in Singapore. The companies in this list are updated quarterly, and some may be removed, and others added. The review is based on the stock and weight of each company.

A stock index like the STI represents a section of the stock market. Like Singapore, each country has one or two major stock indices used as a barometer for their market. The U.S. has S&P 500 and the Dow Jones Industrial Average, Japan has Nikkei 225, while Hong Kong has Hang Seng Index.

Investing your money in an STI ETF allows you to invest in several blue-chip stocks without requiring a lot of capital. Because of the investment strategy, you don’t have to spend much cash purchasing stocks from individual companies in the index. Buying them individually will ultimately be expensive.

This form of investment also enables you to track the share index and gain exposure. It’s a long-term investment, which makes it low risk. In addition, Singapore’s economy is also growing; therefore, if you track a national stock index, you are investing in the country’s economy.

It’s also ideal for beginners who have no idea where to start. You can spread the risk on many companies and avoid incurring huge losses if a company winds up or performs poorly or there’s a stock market crash. If it’s your initial investment, you may also not know how to pick the right stock. STI ETFs offer broad exposure to multiple companies instead of putting all your money in one single stock.

Compared to actively managed funds, STI ETFs have fewer fees. Unlike the former, the primary focus is not to generate profit.

An STI ETF just replicates the performance of an STI; therefore, the management fees are lower. Also, you won’t incur any charges when you trade your units.

However, like any other investment portfolio, there are basic charges such as brokerage fees and commissions. To get the lowest costs, you can compare online brokerage accounts to choose the most suitable.

Since STI ETFs are listed on the stock exchange, they can also be traded. The public can sell and buy shares on a market trading day. These assets are a long-term strategy, but you can opt to see if it makes sense, especially during market fluctuations.

As an investor, you should closely monitor your ETF. When the price is low, you can take advantage and buy more STI ETF shares. On the contrary, this can be an excellent opportunity to sell your units and earn a quick profit when they start rising.

Some of the benefits of investing in STI are

* They are low risk

* Easy to buy and sell

* They have lower charges

* It’s a long-term investment

* You can use a small investment capital

* You can invest in the future of Singapore