Little red dot with big potential: The Singapore story
Little red dot with big potential: The Singapore story
Great investment opportunities sometimes hide in plain sight. Whether you're a young investor just starting out or a seasoned professional planning for retirement, Singapore offers a rare mix of stability, growth and income. Here's why your next opportunity might be right at home.
Steady returns in an uncertain world
In just 60 years, Singapore has evolved from a developing nation into a key wealth hub in Asia. While markets around the world have been affected by uncertainty brought on by trade wars, political tensions and economic uncertainty, Singapore's Straits Times Index has been quietly delivering consistent returns. The numbers speak for themselves: the Singapore stock market has more than doubled in value over the past 20 years, growing from US$247 billion to US$502 billion – that's a solid 3.5% annual growth rate.
Why this stability? It comes down to three key factors:
- Stable governance: Singapore has maintained the same political leadership since independence, allowing for long-term economic planning without the disruptions of constant policy changes.
- Strategic location: Positioned at the crossroads of major shipping routes, Singapore benefits from regional trade growth.
- Financial hub status: As wealth continues to grow across Asia, more family offices and international businesses are setting up shop in Singapore, creating a virtuous cycle of investment and growth.
Reliable income in a low-yield world
Singapore companies are generous with dividends. With interest rates expected to stay low, these dividends are appealing to investors looking for steady income in addition to returns from traditional savings or fixed income to complement their income strategy.
The average dividend yield on the Straits Times Index is around 5% (as of 2024) – significantly higher than the 2-3% average in most developed markets like the US and UK1.
If you had invested in Singapore stocks over the past 20 years, you would have earned an average of 3% from price appreciation plus 4% from dividends, giving you a total return of 7% annually2. That's the kind of steady, reliable growth that builds real wealth over time.
For younger investors, these dividends can be reinvested to compound your returns. For those closer to retirement, they provide a steady income stream that can supplement other retirement funds.
At the heart of Asia’s wealth boom
Asia is fast becoming the world’s wealth engine. By 2028, nearly half of all new high net-worth individuals (HNWI) globally is projected to come from the Asia-Pacific region3.
Singapore sits at the epicentre of this wealth creation. Whether it's the growing middle class in Southeast Asia, the digital transformation sweeping across the region, or the increasing trade between Asian countries, Singapore companies are well-positioned to ride these supertrends.
The currency bonus
Here's an often-overlooked benefit: the Singapore dollar has been strengthening against major currencies, including the US dollar (up about 6% this year alone4). When you invest in Singapore, you're not just banking on company performance – you could also benefit from potential currency appreciation.
For international investors, this adds an extra layer of returns. For local investors, it provides protection against global currency volatility.
Getting started: Three simple steps
Whether you're 25 or 65, getting exposure to Singapore equities doesn't have to be complicated. Here are three investment opportunities that give you different ways to access Singapore's growth:
- For stability seekers: With Singapore’s strong currency, stable economy, and safe haven status, a focus on blue-chip stocks would give you access to Singapore's largest, most established companies. These companies have weathered multiple economic cycles and continue to thrive. Investing via a Blue Chip Investment Plan takes the guesswork out of investing and builds discipline by automatically investing a fixed amount every month. Learn more about BCIP
- For hands-off investors: For busy individuals, automated investment platforms offer a simple, low-cost way to grow your wealth. Choose a RoboInvest portfolio that matches your risk appetite and financial goals – removing the guesswork and emotion from investing. Learn more about RoboInvest
- For growth hunters: Prefer to do it yourself? Look for established companies with strong track records, consistent dividends and exposure to long-term growth trends. Diversify your investments through equities, real estate investment trusts (REITs) and exchange-traded funds (ETFs). Learn more about Online Equity Account
The bottom line
Strong investments do not have to be flashy. Often, they’re found in stable, dividend-paying companies in well-managed markets – like Singapore.
With its track record of resilience, attractive yields and exposure to Asia’s growth, Singapore offers a compelling case for investors at any stage of life.
The key is getting started. Time in the market beats timing the market, and Singapore's track record suggests that patient investors who embrace this little red dot will be well rewarded for their patience.
Remember, all investments carry risk, and past performance doesn't guarantee future results. Consider your financial situation and risk tolerance before investing, and do not hesitate to seek professional advice when building your investment strategy.
References
1 Source: Bloomberg, Dividend Yield of Straits Times Index, FTSE 100 Index, and S&P 500 Index in 2024
2 Source: Bloomberg, Straits Time Index performance from 1 August 2005 – 1 August 2025.
3 Source: Capgemini World Wealth Report 2024
4 Source: Bloomberg, USDSGD currency pair performance in 2025
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Global Equities Disclamier
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