Singapore Slump: City-State’s ETFs Slide

Previously seen as a beacon of stability in a region chock full of volatile equity markets, Singapore has not delivered for investors in 2014.

The iShares MSCI Singapore ETF (NYSEArca: EWS) and the iShares MSCI Singapore Small-Cap ETF (NYSEArca: EWSS) are down 5.2% and 3.3%, respectively, this year. Investors looking for shelter from the emerging markets storm while still clinging to Asia-Pacific exposure via Singapore ETFs have been let down as the major Indonesia, Malaysia, Philippines and Thailand ETFs have all outperformed the largest Singapore fund. [Philippines ETF Firms]

Stocks in Singapore posted the third-biggest decline among developed markets this year, report Jonathan Burgos and Jasmine Ng for Bloomberg.

“Singapore companies will struggle to boost profits amid rising wages and weakening demand for property,” Bloomberg reported, citing Baring Asset and Samsung Asset Management.

Property values in Singapore, one of the most expensive and once one of the hottest real estate markets in the world, are faltering and EWS is feeling the sting. The ETF allocates 52.2% of its weight to financial services names. Despite its 4% trailing 12-month yield, one of the highest among single-country developed market ETFs, investors have not been enchanted by Singaporean stocks this year. [Single-Country ETFs With Yield]

EWSS, the small-cap fund, is hardly less vulnerable to real estate slump in Singapore as that ETF devotes almost 51% of its weight to financials and features several real estate investment trusts (REITs) among its top-10 holdings, according to iShares data.