Compared to the West, Singaporean retail investors may thumb their noses at ETFs, thinking themselves smarter than the market. In a way, the wild heart of these punters is understandable. If an ETF that tracks the Straits Times Index (STI) is purported to perform well over time, why not buy the constituent stocks themselves?
In the endless debate over active versus passive investing styles, Asian investors love to get the best return from the stock market, says Mark Hui, head of global equity beta solutions (Asia ex-Japan) at State Street Global Advisors (SSGA). This means getting their hands dirty in a do-it-yourself approach to investing.
“If you tell them you can buy indices like that, they’ll think: ‘Why don’t I beat the index?’ That’s why I think ETFs in Asia have not grown as quickly as what we’ve seen in the past in Europe and the US,” he says in a recent interview with The Edge Singapore.