OCBC launches exchange-traded fund with global component

Bank observes that more local investors, especially the young, are looking overseas for stocks

- Sue-Ann Tan

It is a data point that has OCBC Bank's attention - young investors picked Tesla as the top choice for their first trade in 2024, a marked shift from the local bank stocks that 25 to 35-year-olds chose in 2023 and 2022, and Singapore Airlines in 2021.

Singapore's second-largest bank noted that as more investors look overseas for stock offerings, there will be more effort to bring the global market to local investors.

One way to do this is through exchange-traded funds (ETFs).

OCBC's latest ETF features an international component and is part of the group's efforts to appeal to local investors who have a global outlook, especially young ones.

It said on April 11 that its brokerage arm OCBC Securities has teamed up with Lion Global Investors which is also a member of

the OCBC group - to introduce the world's first ETF that tracks the performance of Asia-Pacific (Apac) financial services companies. This is OCBC Securities' fourth ETF launch in less than four years.

Called the Lion-OCBC Securities Apac Financials Dividend Plus ETF, the fund will be listed on the Singapore Exchange on May 13.

The initial offer period starts on April 11 and ends on May 3.

OCBC said the ETF will appeal to investors looking for consistent dividend yields.

"Apac banks have consistently paid high dividends amounting to at least US$130 billion (S$176 billion) in the last two years and have dominated other regions," it said. It noted that investors in this ETF will receive a minimum dividend payout of 5 per cent per annum of the issue price for the first two years distributed on a quarterly basis.