Syfe, one of the popular robo-advisories in Singapore, has been busy launching investment solutions for investors. Following a successful launch of Cash+, their funds management account in January 2021, Syfe has returned with a new portfolio solution: Syfe Core, which has 3 different portfolios to suit every investor.
For those of us who have already started investing with Syfe, we may be wondering about the difference between Syfe Core and also the existing Equity100.
Equity100 Is Pure Play Equities (100% Purchase of Stocks)
Syfe Equity100 is a fully managed portfolio that invests 100% of our monies into equities. Equity100 enables us to achieve investment exposure to a highly diversified pool of 1500+ stocks through its underlying Eft's (ETFs). These ETFs are identified using Syfe's Smart Beta strategy, which tilts the portfolio towards three key factors – growth, large market capitalisation and low volatility the Syfe investment team has recognized as factors that will generate better performance.
Unlike other robo-advisory portfolios, Equity100 is designed to maximise returns. This means 100% of your funds are invested into equities. Throughout a stock market crash, such as what went down in March 2021, the drawdown on Equity100 can be very high as the portfolio is just exposed to equities and no other asset classes.
On the other hand, the 100% allocation to stocks also means that Equity100 can capture higher returns when the market is on a bull run. For investors who wish to earn high returns in the stock market, and are willing to accept higher volatility, Equity100 can be a suitable portfolio for you.
However, not every investor may be keen to accept high volatility on their portfolio. This is where the Syfe Core comes in.
Syfe Core Provides Equities Exposure While Also Prioritising Risk-Adjusted Returns
To address the needs of investors who want the equities exposure while reducing the downside risks, Syfe has created Syfe Core, a suite of three portfolios – Core Defensive, Core Balanced and Core Growth – which maximises risk-adjusted returns. Syfe Core does this by using equity ETFs, bond ETFs and gold ETF to create their portfolios.
The equity component of the portfolio helps investors create the high returns they want using the Smart Beta methodology, as the bond and gold components supply the portfolio with downside protection.
Through their equity component, Syfe Core offers contact with over 3,500 different companies from diverse sectors. Currently, the top equity allocations include tech stocks for example Apple, Microsoft and Google; China stocks for example Tencent and Alibaba; consumer staples and consumer discretionary for example Amazon, Procter & Gamble and PepsiCo; in addition to Tesla.
Syfe Core Offers 3 Portfolios To Cater To Different Risk Tolerances
Every investor has a different appetite for returns and tolerance for risk. Syfe Core addresses this by providing 3 different portfolios: Core Defensive, Core Balanced and Core Growth. Each of these portfolios offer a different allocation towards the underlying equities ETF, bonds ETF and gold ETF.
Core Defensive has got the lowest equity exposure and highest bond exposure and is focused on long-term capital preservation. It's ideal for investors with less tolerance for volatility. Investors may also use Core Defensive for investments having a short-term time horizon where the priority is capital preservation, for example investing for a home deposit.
Core Balanced is between the two other options, with moderate equity and bond exposure. This really is suitable for investors with moderate tolerance for risk and volatility, or investment goals that have a mid to long-term time horizon, such as investing for children's education.
Core Growth has got the most equity exposure and it is growth-oriented. The high equity exposure causes it to be more volatile but also implies that the returns are higher over the long term. This is suitable for investors rich in tolerance for risk and volatility or investment goals with a long time horizon, such as investing for retirement.
The different allocations to the non-equity components provide different degrees of downside protection to the different portfolios. For instance, according to Syfe, the potential drawdown for Core Growth is 9.97% compared to Core Defensive's 4.90%.
On the flipside, the larger equities exposure also results in higher returns with Core Growth using a 13.2% five-year annualised return compared to Core Defensive's 6.1%.
Syfe Core Has Greater Contact with China
On top of the Smart Beta methodology, Syfe has included China ETFs in to the equity component of the Syfe Core portfolios. Included in this are iShares MSCI China ETF (MCHI) and KraneShares CSI China Internet ETF (KWEB). Consistent with greater exposure to Chinese stocks, Core portfolios possess a greater geographical allocation to China. For example, Core Growth has a 14% allocation to China while Core Balanced has a 7% allocation.
Currently, this enhanced contact with Chinese equities is exclusive to Syfe Core portfolios. Quite simply, for those of us who are keen to invest in China, Syfe Core will be a great robo-advisory portfolio to consider.
Mix And Match The different Syfe Portfolios To Suit Our Preference
While Syfe Core can be a standalone all-in-one portfolio solution for investors, some people may also prefer to use Syfe Core to form the bulk of our portfolios, while supplementing it along with other investments or portfolios.
Syfe products are designed to work in tandem with each other. For example, you could use Syfe Core Balanced to create the bulk of your overall portfolio, take a smaller position in the stock exchange using Equity100, generate a stream of stable income using REIT+ and hold your emergency fund in Cash+.
In the finish, every investor has different needs and preferences. Syfe considers these different preferences and makes it simple to mix and match the different investment strategies and portfolios to be able to also construct a portfolio that's suitable for you. You can also talk to Syfe's wealth experts to find out the proper way to tailor a Syfe portfolio that's customised to your needs by scheduling a totally free consultation call here.
If you are interested to get started on investing with Syfe, DollarsAndSense comes with an exclusive partnership with Syfe – enjoy 0% management fee for that first $30,000 during the first Six months after you sign up. Apply here to enjoy the promotion.