Investing Uncategorized September 24, 2026 0 Comments

Is the 8 XTrackers UCITS ETF on SGX a Goldmine or a Hidden Pitfall? Here’s What No One’s Telling You!

If you’ve been keeping an eye on Singapore’s finance scene lately, you’ve probably caught wind that DWS—yes, the folks formerly known as Deutsche Asset Management under Deutsche Bank—are gearing up to list four low-cost, index-tracking ETFs right here on the SGX. But here’s the kicker: they’re not flying solo. Other players are set to jump into the ring soon, promising a buffet of new ETF options for local investors. Now, before you dive headfirst, ask yourself: does listing ETFs on our turf really change the game? Is the appeal merely convenience, or is there a deeper shift in investment trust and strategy at play? Whether you’re a seasoned investor or just pondering dipping your toes into Nasdaq speculation or the curious case of the S&P 500 Equal Weight, there’s plenty to unpack. Let’s peel back the layers of what’s coming, what’s good, and what might leave you scratching your head in this evolving landscape. LEARN MORE

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If you pay attention to the Singapore finance space, you would know that DWS will be listing 4 low-cost index tracking ETFs in SGX. DWS was formerly Deutsche Asset Management which is under Deutsche bank.

They won’t be the only one bringing ETFs to Singapore. That’s all I can say and you can look forward to more from other providers in the next couple of months.

The 4 ETFs

The 4 ETFs tracks the following:

Fund Name	Ticker	Total Expense Ratio
S&P 500 UCITS ETF	XUS	0.03% p.a.
MSCI World UCITS ETF	XWR	0.12% p.a.
S&P 500 Equal Weight UCITS ETF	EUS	0.15% p.a.
Nasdaq 100 UCITS ETF	XND	0.20% p.a.

Think folks can finally speculate with Nasdaq 100. The choice of S&P 500 Equal Weight is a bit weird. Is it really popular here? I thought only Kyith talks about the equal weight?

Not just that IFAST will collaborate with DWS to launch some more IFAST branded ETFs under the Singapore VCC structure:

iFAST Xtrackers Artificial Intelligence & Big Data UCITS INDEX ETF
iFAST Xtrackers MSCI Taiwan UCITS INDEX ETF
iFAST Xtrackers MSCI Korea UCITS INDEX ETF
iFAST Xtrackers Nikkei 225 UCITS INDEX ETF

These feels like ETFs for punting

Here are some of the known features:

These ETFs have exist on the European exchanges since early 2021. They are cross listed here. I am curious about the structure they setup in Singapore to cross list over here.
They are implemented with direct replication, as compared to synthetic replication.
They look to me accumulation based as oppose to distribution.
They are domiciled in Ireland rather than Singapore. The tax laws that an investor should be considering is between where they are a tax resident and where the fund are domiciled and not where they are listed.
These ETFs are SGD denominated.
Will be listed in Singapore.

Here are some short thoughts.

What’s Good

I think the most appealing thing is that they are listed on the SGX than an overseas exchange. There are many uncles and aunties in Singapore that still find it troublesome to setup a brokerage and invest overseas.

They also have some trust issues.

Because they are listed on the SGX, they allow Singapore based investors to custodized their ETFs in the CDP.

Investors often worry what happen the broker collapses, and so they find that they trust a Singapore government-affiliated custodian to be more trust worthy.

The index funds expense ratio is very low. The Amundi MSCI World unit trust is probably slightly lower at 0.10% p.a. but if you buy an SGX listed ETF, you don’t have much % based custodian charges and the all in recurring costs is pretty low.

Finally, in the future, you should find brokers that allow you to invest with SRS money.

These funds are also accumulation based, which means no pesky dividend distribution to deal with. Probably appeal to folks like me, less to dividend investors.

Since they are domiciled in Ireland there are tax advantages.

Firstly, non-resident investors do not have to pay estate taxes on Irish domiciled assets.

Since they are accumulation based, there is no withholding tax from the ETF to the investor to talked of.

But there are still dividends received from the underlying companies to the ETFs and there will be dividend withholding taxes there.

Ireland has many dual-taxation treaties with many countries, so they are able to reduce the dividend withholding tax to a lower amount. The most common one is for US incorporated companies such as Apple, their dividend withholding tax will be reduce from 30% to 15% from the security to the ETF.

If it is NYSE listed, Swiss incorporated Garmin, the dividend withholding tax will be reduce from 35% to 15%.

So the appeal is the extensive dual taxation treaty of Ireland.

What is less Good.

Now some would consider that now you can buy SGD denominated ETFs you are free from currency risks.

Er… that might not be the case.

Remember that the currency you denominated in is just a representation of the value of the basket of securities. Ultimately, what you should consider is:

Why do you want to buy that basket of securities as oppose to other basket of securities?
Why this index tracking strategy as oppose to other strategies?

You can have something denominated in SGD but the value go down 50% in 20 years time. I don’t think you want that right?

I think I talked about this currency thingy a fair bit in the past.

I had this chart last time to show the MSCI World performance in different currency over like 21 years:

Same basket of securities in different currency.

But maybe you will understand this better.

You know Amundi have 2 MSCI World unit trust, one USD and one SGD:

SGD denominated: Amundi Index MSCI World A12S Acc
USD denominated: Amundi Index MSCI World A12U Acc

You can invest in both with Poems actually.

Here are their calendar year performance:

Year	SGD Denominated MSCI World Amundi	USD Denominated MSCI World Amundi	USD vs SGD Depreciation (-ve means USD go down)
2023	21.9%	24.0%	-1.84%
2024	22.7%	18.6%	3.30%
2025	14.1%	21.1%	-5.52%
2026 YTD (22nd Sep)	12.5%	13.4%	-0.61%

If you invest in a SGD denominated fund, and the SGD strengthen very strongly, it will look like 2025, where the market runs day to day, but its like your returns look very muted.

How should you interpret it then?

The same basket of developed world large and mid cap securities when valued in SGD gains 14%. But when valued in USD gains 21%. But its the same basket.

There will always be some sort of risks. There are local investors investing in Singapore small caps, that doesn’t suffer from currency woes this year but are negative this year.

Aside from currency, the bid-ask spread for ETFs is usually wider. The bid-ask spread can be seen as a one time cost. Usually there are market makers who provide the liquidity at the buy and sell queue. The market makers have to earn something for the “service” and that would be the spread.

Some securities are more liquid and the spread is naturally lower. What we can observe is the spread at US exchange is the narrowest, LSE is about 22bps for those less popular ones.

SGX? I have no idea, we will have to see.

Finally, one of the reasons these large asset management firm don’t come to Singapore is because it is a small market.

DWS actually came and delisted a bunch of ETFs in July 2020:

DWS Delisting Notice.

Could or would they develop a presence here? Can they get the same amount of AUM?

Remember that they are not the only player here.

These are my pros and cons considerations.

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