Singapore's First Active ETF Targets Small and Mid-Cap Stocks Beyond the Blue Chips

A New Vehicle for Singapore's Second Tier

CGS International Securities Singapore has introduced the first actively managed exchange-traded fund focused on small and mid-cap stocks listed on the Singapore Exchange. The CGS Fullgoal Singapore Next 50 Active ETF is benchmarked to the iEdge Singapore Next 50 Index, which captures the 50 largest mainboard companies sitting just below the 30 blue chips that dominate local portfolios.

The fund is scheduled to begin trading on September 3 under ticker Q50, with an initial offering price of S$1 per share. The subscription window runs from August 6 through August 26, according to CGSI Singapore.

At least 80 percent of the portfolio will consist of constituents from the Next 50 index. The remaining allocation may include other Singapore-listed equities, giving the manager room to overweight names from the Straits Times Index when valuation or momentum signals warrant it.

Portfolio Construction and Risk Profile

The fund will hold between 30 and 50 positions, rebalanced monthly. Constituents are scored across six factors: valuation, growth, market dynamics, earnings surprises, analyst sentiment, and earnings quality. James Ong, group head of asset management at CGSI Singapore, noted that while individual Next 50 stocks exhibit volatility around 30 percent, a diversified portfolio of these counters brings volatility down to approximately 12 percent.

The active overlay allows the manager to reduce exposure to underperforming stocks and increase allocations to stronger performers, including select blue chips such as Keppel, DBS, and Venture. That flexibility is designed to capture the wide return dispersion within the Next 50 universe, which Ong said can reach 200 percent in a given period.

Fullgoal Asset Management (Hong Kong) serves as investment adviser. Its parent, Fullgoal Fund Management, oversaw 888.5 billion yuan, equivalent to roughly US$132 billion, across 422 public funds as of December 31, 2025, excluding money market vehicles.

Sector Tilt and Holdings

As of July 30, real estate investment trusts represented the largest slice of the ETF at 36.7 percent. Top holdings in that segment include Keppel Infrastructure Trust, CDL Hospitality Trusts, Starhill Global Reit, and CapitaLand Ascott Trust.

Technology and healthcare together account for nearly 20 percent of the Next 50 index, a sharp contrast to the Straits Times Index, where technology exposure sits below 1 percent. Key tech names in the portfolio include UMS Integration, Frencken Group, and AEM. On the healthcare side, the fund holds Raffles Medical Group and Haw Par, known for its analgesic brand.

The heavier allocation to REITs, technology, and healthcare reflects sectors that are either underrepresented or absent in the blue-chip benchmark, offering investors a different risk and return profile within the Singapore equity market.

Riding the Equity Market Development Programme

Singapore's small and mid-cap counters have drawn increased attention since the Equity Market Development Programme began deploying capital in November 2025. That government-backed initiative aims to deepen liquidity and improve price discovery for second-tier stocks, and the launch of the CGS Fullgoal ETF arrives as market participants look for structured ways to access that segment.

Ong characterized the new fund as a complement rather than a substitute for STI holdings. "We are looking at this ETF as one that completes the STI family in a Singapore portfolio," he said, adding that it brings investors closer to 50 companies and sectors not captured by the blue-chip index in a single trade.

The fund's active approach also sets it apart from passive index products. With monthly rebalancing and factor-based scoring, the manager can respond to earnings revisions, valuation shifts, and sentiment changes more nimbly than a rules-based tracker.

What Comes Next

The CGS Fullgoal Singapore Next 50 Active ETF will be the first of its kind in Singapore, but it is unlikely to be the last. As regional asset managers hunt for differentiation in a crowded ETF landscape, actively managed funds with concentrated mandates and explicit factor tilts are gaining traction across Asia.

For Singapore, a market long dominated by a handful of banking, telecom, and conglomerate stocks, a dedicated vehicle for the Next 50 offers a test case. If liquidity and performance hold up, expect more managers to carve out specialized strategies around the city-state's deeper bench of listed companies.