Whether you’re time poor or just want an effortless way to match your investments with your investment goals, Smart Baskets are a powerful way to harness the deep knowledge and experience of Syfe’s wealth professionals.
Syfe’s diverse team of wealth professionals is made up of bankers, technologists, academics, and quantitative financial researchers. That deep diversity has allowed Syfe to innovate rapidly and respond to the evolving needs and wants of its customers, including the development of Smart Baskets.
Our ready made Smart Basket orders allow investors to diversify their portfolio in just one order with a curated collection of stocks and ETFs, and are aimed at helping investors achieve better risk adjusted returns.
Below we take a deeper look at Syfe’s High Dividend basket (AU).
The investor behind the basket: why invest?
The High Dividend AU basket might be a suitable choice for someone who has a longer time horizon and is looking for a consistent stream of passive income.
For those with a long time horizon and a tolerance for higher risk, this smart basket is constructed to help you build wealth, while you sleep. Echoing the sentiment of legendary investor Warren Buffett:
‘If you don’t find a way to make money while you sleep, you will work until you die.’
As with many of our ready made smart baskets, despite its income generating focus, the high dividend basket is likely not suitable for those with a short investment time horizon, say if you were looking to retire in the next 1-2 years.
This is because the smart basket has significant allocation in assets like single stocks and diversified ETFs – which over the short term can prove volatile.
For those with a shorter investment time frame, such as 1-3 years, Smart Baskets like our Stable Dividend Basket or Conservative Growth Baskets might be worth exploring.
What’s in our High Dividend AU basket?
The aim of our High Dividend basket is to help investors maximise their passive income while also generating capital appreciation over time.
Overall, the basket is made up of a diversified mix of high yield equities, REITs, and high yield hybrid securities.
With a dividend yield of 6.18% as of 16 June, the High Dividend basket would potentially be attractive for those looking to generate passive income through their investments.
With inflation at multi-year highs, the ability to generate returns in excess of the current inflation rate is more important than ever before. While products like term deposits might be viewed as a risk free bet by investors, with Australia’s April CPI print coming in at 6.8%, investors might actually be losing money in real terms. Such a perspective should be factored into any investment considerations made in this environment.
And while dividends can change – at a company specific-level and for macro or micro reasons – with the High Dividend Basket spanning 8 different ETFs and stocks, this significantly reduces the potential risk and volatility of the expected yield vs. investing in a single stock.
Indeed, taking a more granular look at the composition of the basket, we see a 40% target allocation in the Vanguard Australian Shares High Yield ETF or VHY. That ETF is itself made up of a diversified blend companies that are forecast to produce higher dividends going forward.
To increase diversification further, the basket has significant allocations in Vanguard Australian Property Securities Index ETF or VAP (20% target allocation) and Active Australian Hybrids Fund or HBRD (15% target allocation).
Ultimately, diversification both in terms of the number of investments you own as well as different asset types can help to limit losses in times of market volatility. If one investment in your portfolio performs poorly, other investments will be there to support the performance of the overall portfolio. At the end of the day, the aim of diversification in these baskets is to smooth out overall portfolio returns – over the long-run and in times of elevated market volatility.
Beyond that, the High Growth basket has a number of target allocations in listed companies with above-market dividend yields, including GUD Holdings, McMillan Shakespeare, Monadelphous Group, Nick Scali, and Helia Group.
High Dividend AU basket performance
Looking at the historical returns of the High Dividend AU basket, we see that the basket has returned 54.8% over the last five years, to 16 June. The ASX 200 benchmark by comparison, has only risen 16.31% in that same time period.
This kind of capital appreciation and outperformance against the ASX 200 benchmark underscores the strength of a basket like this – giving investors access to above-market dividend yields and impressive capital appreciation.
How to get started?
Download the Syfe app and start investing in Smart Baskets – like the High Dividend AU basket today.
To find our High Dividend basket in the Syfe app, navigate to the Smart Baskets tab either from the Home screen or via the Discover tab, then use our optional filters and select a time horizon of between 4-10 years, a ‘moderate’ and / or ‘high risk’ risk appetite, and select ‘optimise for dividends’.
Plus, for a limited time only, investors get 50% off the total brokerage cost with the purchase of any Smart Basket – so you can diversify and optimise your returns not only in a fraction of the time, but for a fraction of the cost. Learn more about Smart Baskets now.
Smart Baskets are pre-packaged orders formulated according to investment attributes of the underlying securities/ETFs (such as geographic and industry exposure, historical dividend yield, and historical capital appreciation), and do not take into account your personal circumstances, risk appetite, and goals. The information provided does not suggest or imply and should not be construed as any guarantee of future performance, or as investment advice or strategy. Each Smart Order comprises several separate orders for ease of execution only, and should not be construed in any manner as a managed discretionary account or a managed investment scheme. Investing involves risk, including the risk of losing your invested amount. Any information that may be in this communication is general in nature only and is current at the time of writing. Syfe does not make recommendations of any kind or provide personal advice that take into account your objectives, financial situations or needs. You should therefore consider the appropriateness of the information in light of your own objectives, financial situation or needs before acting on such information, and/or speak to your financial or tax adviser for personal advice. Past performance figures are based on information provided by third parties and may not be accurate. Any references to past performance and future indications are not, and should not be taken as, a reliable indicator of future results. Syfe does not intend for any statement made here to relate to the acquisition or disposal of any shares in the companies or other financial products named here. Syfe makes no representation and assumes no liability as to the accuracy or completeness of the content of this communication.
