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STI dollar-cost averaging yields 5.7% CAGR since 2019

The STI generated a 37% total return, outperforming other indices.

Dollar-cost averaging (DCA) into Straits Times Index (STI) exchange-traded funds (ETFs) has delivered an indicative compound annual growth rate of 5.7% since 2019, according to Singapore Exchange's (SGX) market update.

Over the same period, the STI generated a 37% total return, outperforming the Financial Times Stock Exchange Asia Pacific (FTSE APAC) Index's 31% return and the FTSE APAC ex-Japan Index's 28%. The STI’s trailing dividend yield of 5.0% is also notably higher, almost double that of its regional counterparts.

Despite market volatility, DCA has kept pace with lump-sum investing by allowing investors to accumulate units at lower prices during market downturns, SGX noted. As a result, DCA has emerged as a viable alternative to lump-sum investing, enabling gradual exposure to ETFs and stocks over time.

The most popular Singapore-listed ETFs used by DCA investors include the Nikko AM STI ETF and the Lion-Phillip S-REIT ETF.

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