A bond ETF in Singapore is a fund listed on SGX that holds a basket of bonds, so you get many issuers and maturities in one purchase. The best-known is the ABF Singapore Bond Index Fund, which its manager says tracks an index of mainly Singapore government and quasi-government bonds, with a total expense ratio of 0.24% a year. Bond funds are usually steadier than share funds, but they can and do fall, especially when interest rates rise.
This guide explains how bond index funds work, what two SGX-listed examples hold as at November 2026, and how they differ from buying Singapore Government Securities (SGS) directly. Funds are named as examples, not picks. For how bonds fit into a mix with shares, see building a simple index portfolio.
How Bond Index Funds Work
A bond index lists bonds that meet set rules, such as currency, issuer type, credit rating and size. A bond index fund buys those bonds and replaces them as they mature or drop out, so the fund never matures itself.
Your return comes from two places: the interest the bonds pay, distributed or reinvested, and changes in bond prices.
Two SGX-Listed Bond ETFs in Singapore
From each fund’s page on the manager’s site, as at November 2026:
| ABF Singapore Bond Index Fund | Amova SGD Investment Grade Corporate Bond Index ETF | |
|---|---|---|
| SGX code | A35 | MBH |
| Index | iBoxx ABF Singapore Index | iBoxx SGD Non-Sovereigns Large Cap Investment Grade Index |
| What it holds | Mainly SGD bonds issued or guaranteed by the Singapore government and quasi-government entities; may include some other Asian government bonds | SGD corporate and other non-government bonds rated AAA to BBB; 74.8% Singapore issuers |
| Management fee | 0.15% a year | 0.15% a year |
| TER | 0.24% (audited, period to 30 June 2025) | 0.26% (audited, period to 30 June 2025) |
| Fund size | S$1,133.09 million (12 Nov 2026) | S$727.41 million (12 Nov 2026) |
| Yield to maturity | 2.12% (30 Jun 2026) | 2.67% (30 Jun 2026) |
| Average duration | Not stated on the page | 4.7 years |
| 3-year tracking error | 0.10% (30 Jun 2026) | 0.20% (30 Jun 2026) |
| Distributions | Semi-annual, not guaranteed | Semi-annual, not guaranteed |
Yield to maturity is not a promised return. The manager describes it as a weighted average of the bonds’ yields, not the fund’s actual return or distribution yield.
The corporate bond fund’s higher yield comes with credit risk: companies can be downgraded or default. MAS lists Singapore’s sovereign credit rating as AAA, so that risk is lower for the government bonds in the first fund.
Why Bond Fund Prices Fall When Rates Rise
When interest rates rise, newly issued bonds pay more, so existing bonds with lower coupons become less valuable and their prices fall. When rates fall, the reverse happens.
Duration measures how sensitive a fund is. A rough rule of thumb: a fund with a duration of 4.7 years would fall by about 4.7% if interest rates across its bonds rose by one percentage point, and rise by about that much if they fell. Real moves differ, but the direction is reliable.
This is not theoretical. The ABF Singapore Bond Index Fund’s NAV return over the year to 31 October 2026 was -0.54%, per its manager. Past performance does not predict future results.
The short version: a bond ETF gives you many bonds for a low yearly fee, but its price moves with interest rates and it never matures. Holding an individual bond to maturity returns its face value; holding a fund does not.
Bond ETF or SGS Bonds Bought Directly
MAS says SGS bonds are “fully backed by the Singapore Government”, come in tenors from 2 to 50 years and can be bought from S$1,000 at auction using cash, SRS or CPFIS funds. Their prices also move before maturity, but if you hold to maturity you get the face value back.
| Bond index fund | SGS bond held directly | |
|---|---|---|
| Spread | Many bonds and maturities | One bond, one maturity |
| Maturity | None; the fund rolls over | Fixed date; face value repaid |
| Yearly fee | TER, about 0.24% to 0.26% for the two above | None to hold; bank or broker fees to buy or sell |
| Trading | On SGX, any trading day | At auction, or on SGX via a broker |
For shorter-term money, also compare Singapore Savings Bonds, which can be redeemed in any month without losing principal, and T-bills and fixed deposits.
Asian and Global Bond Funds
Some bond index funds hold bonds in several Asian currencies or US dollars. They add currency risk, and their credit quality varies by country. Read the index description and the currency breakdown on the factsheet before comparing yields; a higher yield usually means more risk somewhere. Our expense ratio, tracking error and spreads guide explains how to compare costs across funds.
Using CPF or SRS
Both funds above are on CPF Board’s List A of ETFs under CPFIS-OA, updated 17 September 2025. Investing OA money gives up its guaranteed 2.5% a year, so a bond fund yielding near that level leaves little room after fees. Our guide to index investing with CPF and SRS works through the comparison.
What To Do Next
- Decide what you need the bonds to do: steady the portfolio, produce income, or hold money for a known date. A direct bond or Savings Bond may fit a known date better than a fund.
- Read the fund’s prospectus and product highlights sheet, and check its duration and credit quality on the latest factsheet.
- Check that your broker is listed in the MAS Financial Institutions Directory. Bond funds are not covered by SDIC deposit insurance.
- This is general information, not advice on your situation.
