News

The urgency to reduce carbon emissions is existential for humanity. As individuals and governments become more aware of the environmental impact of their actions, the transition towards more sustainable business practices will only gain momentum. Companies that lead the sustainability wave may be rewarded with expanding business opportunities. As a result, investors are also recognising that there are potential benefits in aligning their portfolios with their values. Listed on the SGX on 28 April 2022, the Lion-OCBC Securities Singapore Low Carbon ETF gives investors here an opportunity to access 50 environmentally conscious Singapore companies, while potentially reaping financial rewards. This dual benefit makes sustainable investing a responsible and potentially lucrative choice for investors. Here are five key benefits of investing in Singapore’s first low carbon ETF – the . The transition to a low-carbon economy is a significant megatrend. Governments and corporations across all sectors are increasingly committing to reducing carbon footprints. There is a growing consumer preference for environmentally friendly products, providing growth opportunities for companies that align with these values. Similarly, financial institutions may increasingly allocate more investment capital to greener companies. The Lion-OCBC Securities Singapore Low Carbon ETF offers investors the benefits of broad sector diversification across major business sectors. Source: as of 31 May 2024   Supporting Singapore companies that prioritise sustainability in their operations is one way for investors to align your money to your values. The Lion-OCBC Securities Singapore Low Carbon ETF comprises Singapore companies that are committed to reducing their carbon footprint. You don’t just gain exposure to Singapore-listed companies on SGX (76%) either, but also Singapore-domiciled businesses listed on overseas exchanges, such as the US (23%) and Hong Kong (1%). Source: SGX Index Edge as of 31 May 2024 In Singapore, the topic of climate change has been a hot-button issue in recent years. One of our main objectives will be to protect our existence by protecting our shoreline against rising sea levels. The government has also set the impetus to reward businesses with low carbon footprint – in line with Singapore’s national climate goals. Carbon taxes were introduced in 2019, and is set to be raised to S$50-$80/tCO2e (short for tonne of carbon dioxide equivalent) in 2030. (Source: National Climate Change Secretariat Singapore as of 28 May 2024) The Lion-OCBC Securities Singapore Low Carbon ETF offers diversified exposure to 50 Singapore companies that are committed to reducing their carbon footprint. In addition to household names such as the three local banks (DBS, OCBC and UOB), Singtel, SGX and Keppel Ltd, and popular REITs (CapitaLand Integrated Commercial Trust, CapitaLand Ascendas REIT and Mapletree Industrial Trust), you also gain exposure to overseas listed companies such as Sea Ltd, Flex Ltd and Grab Holdings.* Source: Lion Global Investors as of 31 May 2024 Viewing their role as stewards of the future, low-carbon businesses may be better prepared for the long term and are more willing to pursue disruptive innovations. This can have short-term benefits in the form of cost savings and improved efficiency, as well as a longer-term upside in innovation that potentially boosts profitability and performance. According to the , the Lion-OCBC Securities Singapore Low Carbon ETF achieved the highest returns among Singapore equities ETFs listed on SGX in 2023. The ETF extended its performance this year – also delivering the best return among Singapore equities ETFs based on .     Source: Bloomberg, as of 31 May 2024 Having embraced their responsibility to the environment, such companies may also be more likely to consider broader ethical commitments, including fair working practices and community engagement. This approach can entrench brand loyalty and long-term success. Over time, these companies that may also lead their peers in other important areas such as technology, innovation and even talent. Deep diving into the performance of this ETF’s top constituents. Between 1 January 2024 and 31 May 2024, its US-listed constituents such as Sea Ltd and Flex Ltd helped boost its performance. Source: Lion Global Investors as of 31 May 2024 The crux of any sustainable investment is that you get to allocate your capital to green companies – and contribute to protecting the environment. Naturally, sustainable businesses may be in a better position to withstand adverse effects of climate change due to their long-term planning and adaptability. This can also reduce environmental risks, regulatory penalties, and the volatile future that fossil fuels face. The Lion-OCBC Securities Singapore Low Carbon ETF gives you an opportunity to play a part in protecting the planet. Despite a much lower carbon footprint, the Lion-OCBC Securities Singapore Low Carbon ETF outperformed other Singapore-focused ETFs such as the SPDR STI ETF, Nikko AM Singapore STI ETF and the Xtrackers MSCI Singapore UCITS ETF between 28 April 2022 (ETF’s listing date) and 31 May 2024. Source: SGX Index Edge as of 31 May 2024 What better way to grow your portfolio than to know that you are doing good for the environment as your portfolio performance enhances. Investing in the Lion-OCBC Securities Singapore Low Carbon ETF offers a strategic opportunity for Singapore investors to benefit financially while supporting Singapore’s low carbon efforts. Comparing the performance to relevant benchmarks can also provide context for evaluating its success. As of 31 May 2024, it has delivered a year-to-date return of 7.9%  – leading all Singapore equities ETFs listed on SGX. (Source: Bloomberg as of 31 May 2024) Investors can also rest assured knowing that they are not sacrificing on income when investing in this ETF compared to other popular Singapore ETFs – as it pays a semi-annual dividend in June and December . As of 31 May 2024, the Lion-OCBC Securities Singapore Low Carbon ETF dividend yield was 3.79%(Note: The dividend amount or dividend rate is not guaranteed).     Lion Global Investors, the issuer behind the Lion-OCBC Securities Singapore Low Carbon ETF, presents a reliable option for Singapore investors looking to make a positive impact. You can invest in the Lion-OCBC Securities Singapore Low Carbon ETF through any broker that allows trading of SGX ETFs. When doing so, you can choose to invest in either the SGD counter (SGX: ESG) or USD counter (SGX: ESU) through cash and Supplementary Retirement Scheme (SRS). Of course, you can also dollar-cost average via , , and the – and build up your exposure over time. Investors in the should note that the ETF has a management fee of 0.4% per annum. For every $1,000 invested, the management fee is only around $4. Furthermore, you can also invest in any of the other five innovative ETFs that Lion Global Investors has listed on SGX. In total, Lion Global Investors manage a combined AUM of S$919 million (Source: Lion Global Investors as of 31 May 2024) under these ETFs: