SINGAPORE – While the central bank’s
Equity Market Development Programme (EQDP) initiative
has spurred interest in Singapore equities, investors are also drawn to the Republic’s status as a relatively safer market.
This pivot to Singapore equities comes at a time when interest rates on fixed deposits and Treasury bills are coming down, prompting investors to look elsewhere to earn a decent return on their spare cash.
The Straits Times takes a look at two options that a risk-averse investor may want to consider.
Mr Joey Choy, a remisier and trader at Phillip Securities, said he has noticed more interest in the Singapore markets.
Even clients who have stayed on the sidelines in recent years are “re-engaging with the Singapore market” and looking at investing into stable, income-generating stocks, he added.
Mr Choy said an investor may want to consider a mix of exchange-traded funds (ETFs), blue chip names and Singapore-listed real estate investment trusts (S-Reits) in their portfolio.
ETFs are useful for those who do not want to pick stocks or who find it stressful to do so.
They are also suitable for investors who do not have the time to monitor the markets daily or who want to start small and build up their investment holdings gradually over time, he said.
There are three ETFs on the Singapore Exchange (SGX) tracking the benchmark Straits Times Index (STI): one by State Street Global Advisors and two by Amova Singapore.
Investors effectively gain exposure to the 30 largest and most liquid companies on the SGX through an ETF investment.
Mr Choy noted that blue chips like the three local banks, DBS Bank, UOB and OCBC Bank, or telco Singtel, can form part of any portfolio too, because these companies are relatively more stable and pay out dividends regularly.
The three banks are offering dividend yields of around 5 per cent, while Singtel has a yield of 2.83 per cent as at Sept 19.
Meanwhile, Singapore-listed Reits which had been out of favour in 2022 and 2023 when interest rates were high, have come back into favour as interest rates in the US and Singapore come down.
The US Federal Reserve made its first rate cut of 2025 on Sept 17, trimming the interbank lending rate by 0.25 percentage points to a range of 4 per cent to 4.25 per cent.
Fed officials have signalled there could be two more reductions in October and December.
Ms Chua Jen-Ai, an equity research analyst at Swiss private bank Julius Baer, said expectations of lower interest rates in the US are positive for Singapore’s Reit sector.
S-Reits, she said, have already benefited from declining interest rates in Singapore and a firm Singapore dollar.
Julius Baer recommends that investors who want stability and income focus on the larger S-Reits. These are typically backed by strong parents and have at least half of their properties in Singapore, she noted.
Some examples of the bigger players on the SGX could include CapitaLand Integrated Commercial Trust, which has a portfolio of retail and commercial properties in Singapore, Australia and Germany; Frasers Centrepoint Trust, which owns retail suburban assets and an office property in Singapore; and Mapletree Industrial Trust, which has industrial assets in Singapore, North America and Japan.
Outside the S-Reits space, Julius Baer sees value in a number of infrastructure business trusts.
Ms Chua said these business trusts have not run up as much as the S-Reits and offer steady cash flows and dividends.
She noted that such trusts offer an option for Reit-focused investors to diversify their exposure to the real estate sector, adding that she favours those business trusts with more of their assets in Singapore.
Some listed business trusts on the SGX include NetLink NBN Trust, which designs, builds, owns and operates Singapore’s fibre network infrastructure; and Keppel Infrastructure Trust, a diversified business trust involved in three main areas of energy transition, environmental services, and distribution and storage.
A money market fund (MMF) is a type of unit trust that invests in low-risk instruments that have short maturities of less than a year. Investors can liquidate their holdings and withdraw their money whenever they need to.
Most of the MMFs in Singapore invest in fixed deposits; government securities like Treasury bills and Monetary Authority of Singapore bills and commercial paper.
Commercial paper refers to high-quality, short-duration unsecured debts issued by corporates that pay higher interest rates than government bonds.
Some MMFs include the LionGlobal SGD Money Market Fund, the Fullerton SGD Cash Fund, the Phillip Money Market Fund and the United SGD Money Market Fund.
The three-month return on these MMFs have dropped to around the 0.4 per cent to 0.6 per cent range in line with the falling interest rate environment.
The digital banks, Trust Bank, MariBank and GXS Bank, also have their own MMFs.
Trust Bank’s Cash+ is a MMF that invests in Singapore government securities and is managed by abrdn Investments. According to the latest fact sheet for the abrdn SGD Money Market Fund, the three–month return is 0.39 per cent as at Aug 31, 2025.
MariBank’s MMF, Mari Invest SavePlus, is a collaboration with Lion Global Investors.
A MariBank spokesperson said that as at Aug 31, the Mari Invest SavePlus Fund has grown to approximately $1.4 billion in assets under management, and one in three of its customers has opened a Mari Invest investment account. The three-month return on this fund is 0.59 per cent based on its most recent fact sheet for Aug.
The spokesperson added that the lack of physical branches has not deterred customers, as MariBank has used the savings on overheads to improve transaction security.
GXS Bank is the new kid on the block, having launched its digital investment platform, GXS Invest, in July 2025.
GXS Invest offers a MMF that is managed by Fullerton Fund Management. The most recent fact sheet in July showed the fund had a one-month return of 0.18 per cent.
Ms Jenn Ong, group head of retail at GXS Bank, noted that MMFs are an alternative for investors who do not wish to lock in their savings and yet earn a stable return across volatile market cycles.
However, she cautioned that all investment products, including GXS Invest, come with some degree of risk. This is unlike deposit products which are insured by the Singapore Deposit Insurance Corporation up to $100,000.