Dear Mr. Tan,
I would like to seek your advice about the Street-Tracks STI ETF http://www.sgx.com/psv/securities/etf/documents/STI4Apr2008Lodgementversion.pdf)
It seems that small investors can only sell through the SGX Exchange. As the volume of trade is low, there is liquidity risk. What do you think?
I read your blog frequently; maybe it will be good to discuss with blog readers.
Minimum Subscription: Creation Requests for Units may only be made in a minimum of Creation Unit size of 500,000 Units. Investors who wish to subscribe for Units has to go through Participating Dealers.
Liquidity: Investors should note the listing of the Fund on SGX-ST does not guarantee a liquid market for the Units.
REPLY
I believe that State Street will try to create the liquidity for this ETF. The current liquidity should be sufficient for the retail investors. It is suitable for long term investors (who are willing to buy on the market price).
It is not suitable for short term trading, where liquidity is important.
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