1. From 17 Jan 2022, all ETFs listed on SGX will be reduced to 1 unit.
2. This is a piece of news is welcomed as I believe stock markets should be made accessible to investors with all capital sizes. It should be inclusive even for investors with little capital. This is a move towards that direction.
3. But it is still cost inefficient for investors with small capital because most brokers are charging minimum commissions, some higher than the others.
4. Trading SGX listed counters would usually cost $25+++ minimally. There are 3 brokers which I know offer much lower minimum rates. They are Tiger Brokers ($1.99++), moomoo ($2.49++) and Interactive Brokers ($2.50++).
5. Although these low minimum rates would help some investors, it is still not possible to buy just 1 unit of ETF. For example, 1 unit of STI ETF is priced at $3.32 and paying a minimum $1.99 comms means you lose 60% before it even goes into the market!
6. The only exception would be POEMS Cash Plus account. There is no minimum commission and it is the only broker you can use if you want to take advantage of the 1 unit policy change. Note that this is a promotional offer but it is quite generous as it lasts till 31 Dec 2022.
7. This year marks the 20th anniversary of ETFs listing on SGX and there are currently 52 ETFs available.
8. Five ETFs have crossed $1 billion assets and they are iShares Barclays USD Asia High Yield Bond Index ETF, ICBC CSOP FTSE Chinese Government Bond ETF, SPDR Straits Times Index ETF, SPDR GLD ETF and ABF Singapore Bond Index Fund.
9. The growth has been steady and definitely more could be done. I hope to see more brokers waive the minimum commissions for a start.
10. Next would be to introduce fractional shares (<1 share) and zero commission, which have been implemented in the US. These will improve the inclusivity for stock investing tremendously.
