Is Now the Time to Add Singapore ETFs to Your Portfolio?
While South Korea remains one of Asia’s most compelling equity markets, its recent bouts of volatility underscore the importance of maintaining a diversified approach to investing across Asian markets. As investors contend with rising global inflation expectations and persistent geopolitical uncertainty, Singapore stands out as a compelling alternative.
The island nation offers a rare combination of stability, income potential and high-quality exposure to Asian economies. In an investment environment increasingly defined by uncertainty and significant unpredictable market swings, Singapore provides a level of resilience that is becoming harder to find.
The Straits Times Index (STI), a benchmark stock market index for Singapore, has gained 1.9% over the past five days and 8.92% over the past month. The benchmark index has risen 18.89% year to date and 34.18% over the past year.
Its appeal is further reinforced by its strong regulatory transparency, political stability and one of Asia’s most well-developed financial ecosystems. Unlike many of its faster-growing regional peers, Singapore combines economic resilience with comparatively lower volatility, making it an attractive destination for investors.
For investors looking to broaden their geographical allocation without sacrificing quality or stability, Singapore presents a compelling long-term opportunity.
Singapore’s Growth Story Far From Over
Singapore’s economy continued to outperform expectations in the second quarter of 2026. As quoted on CNBC, in the second quarter the country’s economy expanded 5.7% year over year, surpassing the 5.5% growth forecast by economists surveyed by Reuters. While the pace eased slightly from the revised 6.3% growth recorded in the first quarter, the economy remained on a solid footing.
As quoted on the abovementioned article, the expansion was largely driven by the goods-producing industries, supported by continued strength in manufacturing. According to the press release of the country’s Ministry of Trade and Industry, the goods-producing industries accelerated to 10.4% growth from 8.4% in the previous quarter, supported by manufacturing’s 12.2% growth, compared with 8% in the previous quarter. However, growth in Singapore’s services sector eased to 4.6% in the second quarter from 6.2% in the first quarter.
As per Chua Han Teng, DBS Bank’s senior economist, Singapore’s advance second-quarter GDP estimates highlight the economy’s resilience despite geopolitical headwinds from the Middle East, as quoted on the abovementioned CNBC article. He expects trade-driven sectors and domestic construction to continue supporting growth, while cautioning that headline GDP growth will likely moderate due to tougher year-over-year comparisons.
AI Continues to Fuel Singapore’s Growth Story
As quoted on the Business Times, economists have become more optimistic about Singapore’s 2026 growth outlook after stronger-than-expected second-quarter GDP growth, fueled by resilient AI-related demand. Chua Hak Bin and Brian Lee, economists at Maybank, revised their 2026 GDP forecast for Singapore upward to 4.8% from 4.6%, as quoted on the abovementioned article.
According to the economists, Singapore’s growth should remain well supported in the second half of 2026 by sustained global AI infrastructure spending, continued strength in domestic construction, abundant banking system liquidity and strong fiscal support. Although they left their 2027 GDP growth forecast unchanged at 3.1%, they see potential upside from increased capital expenditure by major U.S. hyperscalers.
Per the Business Times article, economists forecast sustained AI-driven demand for semiconductors and precision engineering equipment to remain a key growth catalyst, despite lingering geopolitical risks and concerns over AI-related valuations.
On another positive note, Macquarie raised its 12-month target for STI to 6,000, implying an upside of about 8.3% from current levels. The brokerage cited a “healthy cocktail” of favorable macro trends, higher interest rates and supportive policy measures, as quoted on another article by the Business Times.
A Magnet for Foreign Investment
Singapore continues to rank among the world’s leading destinations for foreign investment. As global foreign direct investment (FDI) rose roughly 6% in 2025, the island nation remained the world’s second-largest FDI recipient, attracting approximately $151 billion in inflows, according to UNCTAD’s World Investment Report 2026.
Additionally, as quoted on Singapore Economic Development Board (EDB), according to Kearney’s 2026 FDI Confidence Index, Singapore climbed to the eighth place from 15th last year, reaching its highest ranking since 2012 and marking one of the most significant advances in the rankings. The sharp improvement highlights Singapore’s robust innovation ecosystem, regulatory stability, skilled labor force and an efficient business ecosystem,
Notably, the index is forward-looking, reflecting the investment intentions of more than 500 senior executives at leading global companies over the next three years rather than historical investment flows. Survey responses suggest that Singapore’s appeal is driven by multiple competitive advantages rather than a single catalyst. Technological innovation emerged as the leading driver, with economic performance ranking as the second most important factor.
Investment rankings are often a reflection of underlying economic and institutional strengths. Singapore’s improved ranking reflects investors’ willingness to commit capital over the long term. Backed by strong economic fundamentals, Singapore is well-positioned to reinforce its status as one of Asia-Pacific’s premier investment hubs, reflecting its reputation as a safe, stable and trusted destination for global investors.
Accessing Singapore Through ETFs
Singapore ETFs stand out as attractive complements rather than substitutes to other Asian markets, continuing to shine as one of the most attractive investment destinations.
Below, we have highlighted a few funds that offer exposure to Singapore’s markets.
iShares MSCI Singapore ETF EWS
iShares MSCI Singapore ETF tracks the MSCI Singapore 25/50 Index, with a basket of 18 securities. The fund charges an annual fee of 0.50% and has a dividend yield of 3.74%. EWS has Zacks ETF Rank #3 (Hold) and has ETF Risk of Low.
EWS has a one-month average trading volume of about 839,000 shares and has gathered an asset base of about $1 billion. The fund has major allocation to financials (54.3%), followed by industrials (21.22%) and real estate (8.23%).
iShares MSCI Singapore ETF has gained 2.28% over the past month and 7.99% over the past three months. The fund has added 9.57% year to date and 19.39% over the past year.
More Diversified Exposure
For investors seeking diversified, less concentrated exposure to the Southeast Asian economy, the following funds may be worth considering. In addition to Singapore, these ETFs invest in other Asian economies, providing broader regional exposure.
Global X FTSE Southeast Asia ETF ASEA has an exposure of 52.5% to Singapore.
iShares Asia/Pacific Dividend ETF DVYA has an exposure of 19.27% to Singapore.
iShares MSCI Pacific ex Japan ETF EPP has an exposure of 17.35% to Singapore.
JPMorgan BetaBuilders Developed Asia Pacific-ex Japan ETF BBAX has an exposure of 15.7% to Singapore.
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iShares MSCI Singapore ETF (EWS): ETF Research Reports
Global X FTSE Southeast Asia ETF (ASEA): ETF Research Reports
iShares MSCI Pacific ex Japan ETF (EPP): ETF Research Reports
iShares Asia/Pacific Dividend ETF (DVYA): ETF Research Reports
JPMorgan BetaBuilders Developed Asia Pacific ex-Japan ETF (BBAX): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).