Easier access to ETFs for retail investors

Date: April 29, 2015

SIAS welcomes the move by MAS to provide retail investors with easier access to investment funds, like exchange-traded funds (ETFs). Reclassifying funds that are relatively less complex and make limited use of derivatives as Excluded Investment Products (EIPs) mean that more retail investors can now access these funds without the need to be assessed on their investment knowledge or experience before they can buy these funds.

ETFs provide retail investors with a low-cost method of diversification, easy access to other markets and asset classes, enabling investors to easily create their own portfolio, with some ETFs even allowing the use of CPF funds. SIAS calls upon all ETF issuers that have funds that are eligible to be reclassified as EIPs to do so promptly.

The initiative by SGX to waive the clearing fee for ETF trades is also welcomed. Nevertheless, more can still be done. Brokers play a big role in helping investors choose the right investment by providing information. SIAS hopes that brokers can facilitate the adoption of ETFs by retail investors, providing them with research reports on ETFs and, if possible, reduced commissions for these trades.

As part of on-going investor education, SIAS recently held a seminar on ETFs with MoneySENSE, ABS and SGX at the Spring Auditorium where 700 people attended the event. To facilitate more retail investors understanding these investment instruments, SIAS has webcast the session and it can be found at https://sias.org.sg/webcast/18_Apr_15_my_money.php

David Gerald
Founder, President & CEO
Securities Investors Association (Singapore)