Our Bedokian Portfolio test investor, Bob, had recently rebalanced his portfolio on 30 June 2026, which can be seen here.
At the end of last year, I had mentioned that Bob would be changing his real estate investment trust exchange traded fund, or REIT ETF (here). As observed, Bob usually rebalances his portfolio biannually: the first market day of the year in January and the last market day in June. On 30 June 2026, along with the usual SGD 5,000 cash injection, Bob had swapped out the REIT ETF with another. The timing was impeccable as that date is the last cum-dividend day for the replacement ETF (Amova-StraitsTrading Asia ex Japan REIT Index ETF, or ticker CFA).
Picture generated by Gemini
Why The Switch?
The previous counter in Bob’s holdings, the Phillip SGX APAC Dividend Leaders REIT ETF (BYJ), was the first of its kind, listed in October 2016. When Bob started his investment journey in January 2017, the availability of the Phillip REIT ETF came at the right time to be the representative for his REIT allocation.
In December 2025, while preparing for rebalancing, Bob reviewed the portfolio and decided to change the REIT ETF. The major consideration points were:
- Cost – Total Expense Ratio (TER): BYJ’s TER is 1.70% while CFA’s TER is 0.55%. A lower TER meant that returns would be eroded lesser by fund expenses.
- Size – Assets Under Management (AUM): BYJ’s AUM is around SGD 10 million and CFA’s AUM is around SGD 712 million. A higher AUM allows better economics of scale in which a lower TER is one of them. Also, a higher AUM fund enjoys better liquidity in terms of a narrower bid/ask spread that is good for quick transaction and price discovery.
- Diversification – Holdings and Exposure: BYJ holds 30 REITs while CFA holds around 43 REITs. In terms of geographical and sector exposure, accordingly BYJ is three countries (Singapore, Australia and Hong Kong) with a huge skew towards retail (around 43%); CFA’s exposure is six countries (Singapore, Hong Kong and India among them) with at most 26% to a sector, therefore is more diversified.
- Dividend Yield: The 12-month dividend yield as of the fourth quarter of 2025 for BYJ and CFA are 4.23% and 5.36% respectively. A dividend yield of 5% and above is preferred as REITs are seen as the main income generator in the Bedokian Portfolio.
Why Not Others?
Good question. There is three other REIT ETFs listed, namely Lion-Phillip S-REIT ETF (CLR), CSOP iEdge S-REIT Leaders ETF (SRT) and UOB APAC Green REIT ETF (GRN). Taking the four considerations in the previous section, CLR’s and SRT’s TER are slightly higher (both 0.6%) and consisted only of Singapore-listed REITs. GRN also has a higher TER (0.82%) and has the lowest dividend yield among the five (3.88%).
However, if asked for an alternative to CFA, Bob would likely choose CLR for its larger AUM and higher dividend yield.
Takeaways
Bob's switch from BYJ to CFA is less about chasing performance and more about maintaining portfolio efficiency. A lower TER, broader diversification and a higher distribution yield made CFA the more suitable candidate for the REIT allocation today.
The key takeaway is that passive portfolio management, as practiced, is not a "set-and-forget" exercise. While the overall framework remains unchanged, the securities used to implement it may occasionally need to be reviewed and updated as new securities become available.
Disclosure
The Bedokian is vested in CFA.
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References
https://phillipfunds.com/phillip-sgx-apac-dividend-leaders-reit-etf/
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