A persistently fragile and unstable geopolitical landscape, marked by recurring trade tensions due to an unpredictable U.S. tariff policy and rising military and geopolitical flashpoints, has increased uncertainty around U.S. markets and pushed investors to seek broader global diversification.
While geographic diversification remains essential, Asian equity markets are drawing global investors as they seek exposure to the region’s favorable growth prospects. Within this context, selectively increasing allocation to stable economies such as Singapore could make strategic sense.
Singapore offers investors a rare blend of stability, income and high-quality exposure to Southeast Asia. By eliminating the element of surprise and unpredictability, traits that have become all too common in today’s global landscape, Singapore offers a level of stability that is increasingly rare.
The Straits Times Index (STI), a benchmark stock market index for Singapore, gained around 22% in 2025 and has carried that momentum into 2026, rising 5.7% this year so far. Additionally, a weakening greenback adds to the appeal. According to TradingView, the U.S. Dollar Index has fallen 1.77% over the past five days and 10.44% over the past year.
Below, we outline other key reasons why Singapore could serve as your next Asia allocation, or why increasing exposure to the market may stand out.
Rare Island of Stability in Emerging Asia
Unlike many faster-growing Asian peers, Singapore offers comparatively lower risks and volatility, underpinned by a predictable regulatory framework and political stability that remains rare in the broader emerging Asia context. This strength is underscored by Singapore’s top-tier credit ratings of Aaa from Moody’s and AAA from S&P, as mentioned by the Monetary Authority of Singapore (MAS).
Asia’s Stable Investment Haven
Singapore consistently ranks as one of Southeast Asia’s top recipients of foreign direct investment (FDI). According to the World Bank, as quoted on CNBC, FDI as a percentage of GDP in Singapore is among the highest globally, reflecting its status as a safe and stable destination for international investors.
Morgan Stanley has described Singapore as an “illiquid safe haven,” highlighting its appeal to investors seeking stability in Asia, as quoted in the above-mentioned CNBC article. According to Morgan Stanley, the MSCI Singapore Index may double in value by 2030 as Singapore enters what the firm calls “a new era of wealth creation.”
Perfect Springboard Into Emerging Asia Markets
Tian Ong Foo, regional and Singapore head of private banking at Standard Chartered, explained that Singapore serves as a “strategic base” for investors seeking exposure to markets such as Indonesia, Malaysia and Thailand, without having to deal directly with the complexities of those economies, as quoted in the CNBC article.
He noted that compared with other hubs, the island nation offers reduced geopolitical risks, strong regulatory transparency and a well-developed financial ecosystem.
Stability & Growth: Singapore’s Winning Combination
Per the CNBC article, SGX Group’s market strategist, Geoff Howie, highlighted the appeal of Singapore’s equity markets, noting that the recent two-decade-high rally was driven by earnings rather than speculation.
Howie also noted that the market can be regarded as reliably investable. With resilience, strong governance and downside protection in high demand, Singapore’s reputation may serve as a key asset rather than a limitation.
As quoted in the Business Times, following a stronger-than-expected fourth-quarter 2025, Singapore’s economy is set to remain firm in the near term, though growth is expected to moderate. Technology-related activities are expected to continue driving near-term growth, with MAS noting that global AI trends will provide additional support.
Additionally, MAS maintained its monetary policy stance and highlighted that non-technology sectors, including construction and financial services, are expected to contribute to steady economic growth. As quoted in the above-mentioned Business Times article, Singapore’s GDP grew an estimated 4.8% in 2025, beating the official forecast of 4% and up from the 4.4% registered in 2024.
Accessing Singapore Through ETFs
Singapore ETFs stand out as attractive complements rather than substitutes to higher-growth Asian markets, continuing to shine as one of the most compelling investment destinations.
Below, we have highlighted a few funds that offer exposure to Singapore’s markets.
iShares MSCI Singapore ETF EWS seeks to track the performance of the MSCI Singapore 25/50 Index, charging an annual fee of 0.50% and has a dividend yield of 3.9%. EWS has double-digit exposure to financials (39.14%), industrials (22.15%) and consumer discretionary (16.28%). The fund has gained 31.56% over the past year and around 4% this year so far.
More Diversified Exposure
For investors seeking diversified, less concentrated exposure to the Southeast Asian economy, the following funds may be worth considering.
Global X FTSE Southeast Asia ETF ASEA has an exposure of 47.3% to Singapore.
iShares Asia/Pacific Dividend ETF DVYA has an exposure of 18.06% to Singapore.
iShares MSCI Pacific ex Japan ETF EPP has an exposure of 16.29% to Singapore.
JPMorgan BetaBuilders Developed Asia Pacific-ex Japan ETF BBAX has an exposure of 13.7% to Singapore.
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iShares MSCI Singapore ETF (EWS): ETF Research Reports Global X FTSE Southeast Asia ETF (ASEA): ETF Research Reports iShares MSCI Pacific ex Japan ETF (EPP): ETF Research Reports iShares Asia/Pacific Dividend ETF (DVYA): ETF Research Reports JPMorgan BetaBuilders Developed Asia Pacific ex-Japan ETF (BBAX): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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