Designed for use by fund managers, asset owners and custodians in benchmarking investment performance, the indices track the performance of a basket of SGD government and corporate bonds and complements the USD/SGD currency futures launched by SGX last month.
The TR/SGX Singapore Fixed Income Index Series represents more than 80% of the Singapore dollar denominated plain vanilla bond market. Meanwhile, the TR/SGX Singapore Bond Index is made up of government bonds and corporate bonds (including statutory board bonds), with the former constituting approximately 60% of the index weightings.
“With the launch of the bond indices, we aim to increase transparency and improve the price discovery process for investors. This is another key milestone for both retail and institutional investors seeking diversified multi-asset exposure through the Singapore market,” said Muthukrishnan Ramaswami, president of the Singapore Exchange.
The Thomson Reuters/SGX Singapore Fixed Income indices are based on bonds priced "objectively and independently” by the Thomson Reuters evaluated pricing service, a time-specific assessment of the fair market value of each bond.
This method provides better indicative prices as compared to composite or contributed prices that may "be out of date", which also makes these indices ideal for the creation of index-based investment products such as exchange traded funds.
“With continued interest in the Singapore fixed income market and growing demand for local index products for benchmarking, we are delighted to strengthen our relationship with SGX,” said Sanjeev Chatrath, managing director, region head – Asia, financial & risk at Thomson Reuters.
The new index series is the only complete government, statutory board and corporate bond index series to provide five years of historical data. This offers market participants a powerful barometer of fixed income returns across a multitude of segments.