Syfe REIT+ vs CSOP iEdge S-REIT Leaders Index ETF: Which REIT Investment Should You Choose?

Singapore REITs remain resilient in 2022, and continue to provide investors with passive income and attractive dividend yields. If you’re looking to build a diversified REIT portfolio, the iEdge S-REIT Leaders Index is one option to consider.

The index is one of Singapore’s most popular REIT indices. It tracks the largest and most liquid REITs in Singapore, including household names like CapitaLand Ascendas REIT (CLAR), Mapletree Pan Asia Commercial Trust (MPACT), and CapitaLand Integrated Commercial Trust (CICT). 

By focusing on liquidity, it captures Singapore REITs with the highest investor interest and fund flows. For instance, demand for warehousing space accelerated during the pandemic and looks set to stay elevated amid the shift to e-commerce. Given the strong market interest in this sector, industrial and warehouse REITs make up about one-third of the iEdge S-REIT Leaders Index.

Source: SGX

What’s more, the iEdge S-REIT Leaders Index has historically outperformed compared to other major global REIT indices.

Given the popularity of the index, there are now two ways for Singaporeans to access it: Syfe REIT+ and CSOP iEdge S-REIT Leaders Index ETF. (Investors cannot invest directly in an index.)

CSOP iEdge S-REIT Leaders Index ETF comparison

Not sure which to choose? We compare both options.

What is Syfe REIT+

Launched in 2020, Syfe REIT+ is a portfolio of 20 REITs that aims to closely track the performance of the iEdge S-REIT Leaders index. 

Instead of fully replicating the index, Syfe REIT+ is built using an optimised allocation of 20 REITs to achieve a tracking error of less than 0.5% p.a. This strategy balances index representation (i.e. minimise tracking error) with trading liquidity (i.e. minimise trading costs). 

Syfe REIT+ is not an ETF. When you invest in the REIT+ portfolio, you own actual units of all the underlying REITs. This is different from a REIT ETF where your funds are used to purchase that particular ETF – itself a product that is traded on the SGX.

Syfe REIT+ portfolio composition
Syfe REIT+ holdings following the September 2022 semi-annual rebalancing.

What is CSOP iEdge S-REIT Leaders Index ETF?

Like Syfe REIT+, the ETF is designed to track the iEdge S-REIT Leaders Index ETF. It pursues a full replication strategy, so it holds all 28 REITs tracked by the index. 

The fund was launched in November 2021 by CSOP Asset Management, a Hong Kong-based offshore asset manager.

CSOP iEdge S-REIT Leaders Index ETF top holdings
Source: CSOP company factsheet

Dividends

In 2021, Syfe REIT+ delivered a dividend yield of 4.8%. For 2022, the dividend yield is estimated to be 6.2%.

When you invest in Syfe REIT+, your dividends are automatically reinvested for you at no extra cost. According to our calculations, dividend reinvestment can add an additional 0.5% in returns each year. This covers a substantial part of our tiered fees ranging from 0.35% to 0.65% per year.

Dividends are credited to your Syfe REIT+ portfolio as and when the underlying REITs distribute their dividends. For Syfe Black and Gold tier clients, there’s also an option to have your dividends paid directly into your bank account each quarter. 

When you invest in the CSOP iEdge S-REIT Leaders Index ETF, your dividends will be credited directly into your bank account on a semi-annual basis. However, dividends are not automatically reinvested for you.

CSOP iEdge S-REIT Leaders Index ETF distribution history. Source: Company website

 

Fees and expense ratio

Syfe REIT+ has a management fee of 0.35% to 0.65% per year, depending on the amount invested. This covers all trading, rebalancing, and dividend reinvestment costs. Since Syfe buys the underlying REIT holdings directly, there is no expense ratio involved.

As per their website, CSOP iEdge S-REIT Leaders Index ETF currently has a management fee of 0.5% per year, though that may increase to a maximum of 0.8%. The ongoing charges (total expense ratio) of 0.6% takes management fee into account and includes other fees for administration and recordkeeping, among others.

Minimum investment and brokerage charges

Both Syfe REIT+ and CSOP iEdge S-REIT Leaders Index ETF are accessible options for investors. 

As a managed portfolio, Syfe REIT+ does not charge brokerage commissions. Your management fee covers all trading costs.

For CSOP iEdge S-REIT Leaders Index ETF, you’ll need to pay brokerage fees each time you buy or sell the security. Do note that some brokers charge commissions that go as high as S$25 per transaction! If you’re looking for a more affordable broker, you can consider Syfe Trade. Commissions for SGX stocks are just 0.06% of traded value (minimum S$1.98).

Syfe REIT+ vs CSOP iEdge S-REIT Leaders Index ETF: Which is better?

Both Syfe REIT+ and CSOP iEdge S-REIT Leaders Index ETF offer investors diversified exposure to Singapore REITs. They have similar top holdings and sector allocations that closely track the index.

The main difference lies in dividend reinvestment. Syfe REIT+ reinvests your dividends for you while CSOP iEdge S-REIT Leaders Index ETF does not. Syfe REIT+ could also be a more efficient option for investors who prefer to dollar cost average since there are no brokerage charges involved.

Want to get started with Syfe REIT+? Simply sign up for an account using Singpass! There’s no minimum investment and no lock-in period. 

Prefer to buy the CSOP iEdge S-REIT Leaders Index ETF? You can do so easily via Syfe Trade, a homegrown, MAS-regulated broker that offers easy and affordable access to the US and Singapore markets.

Previous articleWeekly Market Wrap | 30 September 2022
Next articleWhere To Park Your USD Funds For Higher Yields