Straits Times Index (^STI) is the main benchmark of Singapore’s stock market.
The index tracks the top 30 listed companies on the Singapore Exchange (SGX).
Collectively known as blue chips, they are often regarded as well-established with strong reputations and solid financial standing.
While they are less volatile, they are by no-means risk free.
The STI’s 30 blue chip stocks cut across multiple industries of Singapore’s diverse economy.
The index, however, is heavily weighted towards financials, namely the three largest banks in Singapore and Singapore Exchange Ltd (SGX: S68).
Together, DBS Group Holdings Ltd (SGX:D05), Oversea-Chinese Banking Corporation Ltd (SGX: O39) and United Overseas Bank Ltd (SGX:U11), make up nearly 50% of the STI, slightly more than half the index.
Real estate is another key contributor with constituents like CapitaLand Integrated Commercial Trust (SGX: C38U) and CapitaLand Ascendas REIT (SGX: A17U), making up around 16% of the STI.
Industrials account for almost 10% of the index, making it the third largest sector.
Jardine Matheson Holdings (SGX: J36) holds the largest weightage at 3.8% of the index.
Alongside notable names like SATS Ltd (SGX: S58) and Sembcorp Industries Ltd (SGX:U96), investors can gain exposure to the airline catering and utilities sectors.
At the other end of the spectrum, technology is the smallest arm in the index with a weightage of just 0.89%.
Investing in the STI is made easier with exchange-traded funds (ETFs), the most popular being the SPDR STI ETF (SGX: ES3).
Using a full replication strategy, it holds the same constituents of the STI with nearly the same weightage.
That is why its performance has stayed within splitting distance to the index, with a tracking error of around 0.23% over the last 12 months (as on 31 August 2025).
On top of that, it pays out dividends twice a year, offering a yield of 4.1%, as of 16 September 2025.
Sounds pretty attractive, especially for those looking for steady income.
Dividends also make up a sizable portion of returns, considering how its 10-year annualised return is 7.76%, as of the end of August 2025.
However, these returns can be eroded by fund maintenance fees.
Fortunately, ES3 keeps costs low with an expense ratio of just 0.28% (as of 30 June 2024).
A lower expense ratio allows a larger portion of invested funds to remain invested, instead of being eaten up by fees.
On top of that, the fund is highly liquid.
With over S$2 billion in assets under management, they can be bought and sold easily on the stock exchange.
