From tech to gold to cryptocurrency, exchange-traded funds are all the rage

Retail participation in locally listed funds up 170%, with assets under management of $3.5b

- Angela Tan

Local investor Alice Chew was so impressed by the boom in American technology stocks during the Covid-19 pandemic that she plonked a huge part of her savings into Faang, an acronym for Facebook (Meta), Amazon, Apple, Netflix and Google (Alphabet).

She felt that these companies were at the cusp of a digital transformation sweeping the pandemic-stricken world, so it was a "no-brainer" investment move in 2021.

That was until businesses reassessed their digital spending and confronted economic uncertainty, forcing many tech giants to lay off employees by late 2022.

"There was a reversal of fortunes. It was not just the magnitude of the moves but also the speed at which they played out. So I sold the shares," said Ms Chew, a former banker.

After getting burned by her individual stock picks, she now funnels her investments into a few exchange-traded funds (ETFs), including a tech-oriented one. After a terrible 2022, most tech stocks are doing very well again.

"ETFs are good if you have a broad sense of something. For example, I still believe in the tech trend, but I don't know which companies to pick. So I bought a tech-oriented ETF," said Ms Chew.

Undergraduate Gabriel Tan said the ETFs he buys reflect his views on market trends.

Like many investors, he reacted quickly to the US election result in November, and bought US equity ETFs on President-elect Donald Trump's pro-business policies.

The S&P 500 continues to hit new peaks, even after November's blistering rally.