Dear readers, Singapore Straits Times Index (STI) will welcome Keppel DC Reit on 19 Oct 2020 as the existing constituent STI stock Capitaland Commercial Trust leaves the STI in preparation for its merger with Capitaland Mall Trust.
Following the above change, the weightage of Reits in the STI will be 14%. And I believe the composition of Reits in the STI is likely to grow if the volatilities in the stock markets continue to drag down the performance of the more cyclical stocks which will then leave Reits being the more stable performers.
But make no mistake, Reits are still subject to the vagaries of the stocks markets. However, if you have a choice to invest in some Reits or the Straits Times Index ETF, the choice is clear: STI ETF despite the lower dividend yield. Why is that so? Well, due to diversification and the tracking of an stock index which makes the investment a wiser choice.
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