Recently, A-shares have taken the limelight! How can Singaporean investors participate? You can invest in A shares without an A share account

The performance of A-shares in the past month is considered to have stole the limelight. At the end of September, the lowest level was 2,600 points, reaching 3,600 points in one fell swoop. Then start the oscillation adjustment. The cause of the violence was a series of government policies to stimulate the market, and the central government released water. However, the basis for the explosion is not as simple as pure policy; the underlying logic is that valuations below 3,000 points are cheap enough. On the basis of low valuations, the stimulus played a role. The investment targets introduced later can be seen at the current valuation level of A-shares.

As a local investor in Singapore, if you don't have an A-share account, you can only watch the excitement. Actually, not necessarily. If you want to invest in A-shares, there are two proven methods.

Today, let's first take a look at the investment method of the first method:

There aren't many products that the Singapore Exchange directly invests in A-shares; there are only a few. The first Sino-Singapore cross-listed product ETF, SCY, appeared in '22. Beginning in '23, the president of the SGX Exchange began promoting Sino-Singapore connectivity. In the past two years, exchanges between the SGX and mainland China have gradually increased.

If the market has too many investment instruments and you only want to know a few of the main ones, then these two ETFs are the ones we should keep in mind right now.

Outstanding defensive attributes and steady returns: It is the only equity fund in the market that generated profits of more than 900 million yuan for holders in 2022. If you don't know the famous dividend index when investing in China, then you must know it. Especially in the post-pandemic era, the dividend index showed steady performance and strong returns, surpassing most of China's assets. Moreover, many of the companies in the dividend index are large state-owned enterprises with strong competitiveness.

Against the backdrop of continued fluctuations in the equity market in the past three years, the China Securities Full Index and Wandequan A Index both fell by more than 25%, while the Shanghai Securities Dividend Index recorded positive returns in the past three years, showing good resistance to falling.

High dividend strategies usually act as shock absorbers in bear or volatile markets. Retrospective finds that during several rounds of rapid decline or fluctuation adjustments, high dividend strategies usually have better excess returns.

As can be seen intuitively from the chart below, the dividend index has performed very steadily. After experiencing adjustments due to the bursting of the stock market bubble in 2015, it continued to rise steadily.

The current dividend rate is 5% +, and dividends have remained around 5% in recent years.

The Shanghai Stock Exchange dividend index selected 50 securities listed on the Shanghai Stock Exchange with high cash dividend rates, relatively stable dividends, and a certain size and liquidity as an index sample to reflect the overall performance of securities with high dividend rates in Shanghai.

The top ten weights of the Shanghai Stock Exchange Dividend Value Index are: China Shenhua (3.23%), Chongqing Agricultural Commercial Bank (2.64%), Shanmei International (2.63%), Yankuang Energy (2.58%), Agricultural Bank (2.56%), Bank of Communications (2.53%), Shandong Expressway (2.46%), Bank of Beijing (2.43%), Bank of Shanghai (2.36%), and Blum Oriental (2.36%)

In total, it accounts for 25.78%. The industry covers banking, coal, transportation, textiles, etc. The dividend ratio is mostly 5% or more, representing high-dividend assets.

The proportion of specific industry categories is as follows:

Finally, one more important point about SHD: CSOP's SHD is not just a simple copy of the index, but rather significantly outperforms the dividend index over the long term.The chart below can intuitively see the long-term performance of SHD over the dividend index. Therefore, the return on investing in SHD actually far exceeds that of the dividend index shown by the author above.

It is also a fund issued by Southern Dongying CSOP. The CSOP CSI STAR and CHINEXT 50 Index ETF (code: SCY) is an ETF listed on the Singapore Exchange (SGX). Unlike SHD, SCY is dedicated to tracking the CSI STAR & CHINEXT 50 index compiled by China Securities Index.

The A-share Entrepreneurship Science and Innovation 50 Index is linked to the Double Innovation ETF (SZ: 159780). (The combination of GEM and the Science and Technology Innovation Board is referred to as Double Innovation for short).

The index includes the 50 most promising companies in the Shanghai Stock Exchange (STAR Market) and the Shenzhen Stock Exchange (GEM, ChinNEXT), mainly covering leading companies in emerging industries such as hard technology, new energy, information technology, and biomedicine. Through SCY, investors can access these innovation-driven and strategically supported high-growth companies.

Focus on innovative fields and select China's tech star stocks. It covers nine major scientific and technological innovation development directions in China, and helps investors fully grasp the growth opportunities of China's leading science and technology companies. The proportion of components in each field is as follows:

It can be seen that after the pandemic was affected by China's economic environment, the valuations of technology companies fell all the way down, and were still at their bottom even after the October rebound. In the future, if China's economy rebounds beyond its bottom, technology stocks will play a pioneering role and take the lead in an upward breakthrough.

The top ten weighted stocks account for almost half of the fund's positions, 54.15%

They are all leaders in China's technology segments. The details are shown below:

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CSOP CSI STAR and ChinNEXT 50 Index ETF (SCY): Tracks the CSI STAR & ChinNEXT 50 Index, focuses on Chinese technology and innovation companies, mainly covering large technology companies on the Science and Technology Innovation Board and the GEM

The CSOP Huatai-PineBridge SSE Dividend Index ETF (SHD) is an ETF listed on the Singapore Exchange that mainly tracks the Shanghai Stock Exchange. The index includes 50 high-quality companies with high dividends in the Shanghai Stock Exchange, covering various industries such as energy, finance, industry, and materials. Since its constituent stocks have high dividend rates in the Chinese A-share market, this ETF is suitable for investors who prefer stable returns.

Phillip-China Universal MSCI China A 50 Connect ETF: Tracks the MSCI China A 50 Connect Index and invests in the Shanghai and Shenzhen markets

NikkoAM-straitsTrading MSCI China Electric Vehicles and Future Mobility ETF: Investing in China's Electric Vehicles and Future Mobility sector, based on the MSCI China Electric Vehicle and Future Mobility Index

UOBAM Ping An ChinNEXT ETF: Focusing on growing enterprises in Shenzhen, China, investing in innovative and high-growth companies

ICBC CSOP FTSE Chinese Government Bond Index ETF: Mainly invests in the Chinese government bond market and provides a channel for investors seeking fixed income.