By Reico Wong

INVESTORS in Singapore have become increasingly savvy in recent years and are turning to more sophisticated financial products to grow their money.

In particular, financial experts have reported a rise in investor interest in futures trading here.

Phillip Futures, for example, said it has seen a substantial increase in attendance at its seminars on futures, and growth of about 20 per cent in new account openings over the last two years.

The Singapore Exchange (SGX) in its latest report last Friday also said that it saw a 5 per cent year-on-year rise, to 240,292, in the average number of contracts traded daily.

For the uninitiated, futures trading essentially involves speculating whether the price of a commodity will go up or down at a specific time in the future.

Many of these traded commodities include agricultural products such as corn, wheat, oil, sugar and beef. But other products like gold, currencies, bonds, stock indexes and interest rates are also exchanged in the futures market.

Within the Singapore market, experts said stock-index futures are one of the most popular and regularly traded types of futures - probably because of their proximity to equities and the ease with which they can be understood.

"For relatively new investors, stock-index futures are a good product to start with," said Ms Grace Chan, marketing director of Phillip Futures. "The risk is diversified from one single product to a basket of products.

"For investors who already have experience in trading stocks, it makes even more sense for them to trade index futures as they may have a better understanding of the markets," she added.

Other more popular types of futures here include crude oil, gold and currencies.