Investing Updates: SGX launches new indices. Explore opportunities beyond STI blue chips?

Source:

https://growbeansprout.com/iedge-singapore-next-50-index

ChatGPT:

The Singapore Exchange (SGX) has introduced the iEdge Singapore Next 50 Indices, designed to spotlight mid-cap companies beyond the 30 blue-chip constituents of the Straits Times Index (STI). This move follows strong market momentum—STI rose nearly 18% over the past year, supported by the S$5 billion Equity Market Development Programme (EQDP) and corporate restructuring efforts.

The indices track the “next in line” 50 large and liquid companies on SGX’s Mainboard. To qualify, firms must have a market cap above S$100 million, adequate free float, and meet liquidity and trading velocity thresholds. Constituents are capped at 5% each, with rebalancing every quarter. Two versions exist: the iEdge Singapore Next 50 Index and the Liquidity Weighted Index.

Key constituents include ComfortDelGro, Yangzijiang Financial, NetLink Trust, Keppel REIT, Parkway Life REIT, and iFAST, with real estate investment trusts (REITs) representing about 45% of the index. Financials and industrials also carry significant weight.

Performance has been mixed. Over the past decade, the Next 50 Index returned 5% annually versus STI’s 8.9%, while the Liquidity Weighted Index delivered 3.1%. However, recent years show outperformance: year-to-date in 2025, both indices have gained around 25%, topping the STI’s 19.3%. Notably, in 2019 and 2025, they outpaced the STI by wide margins.

The indices aim to broaden Singapore’s investable universe, enhance market engagement, and create potential benchmarks for future ETFs. For now, no direct ETF exists, meaning investors must buy individual stocks to mirror performance. While the new indices highlight promising mid-cap opportunities, they come with greater volatility and liquidity risks compared to STI blue chips.

Opinion:

New indexes still include many REITs, haha.

Would be interesting to see if having both STI and Next 50 indices in portfolio works better long-term.