Is a Core Balanced portfolio right for you?

Whether you’re a conservative investor, someone more growth-oriented, or lie somewhere in the middle, your investment style influences the way you invest.

Are you someone who seeks positive returns over the long-term, and are comfortable taking a moderate level of risk to get there? A balanced investing approach may suit you best.

The building blocks of a balanced portfolio

As its name suggests, a balanced portfolio aims to balance risk and reward by holding both equities and bonds in a more or less equal split.

The premise is simple: Equities and bonds tend to move in opposite directions. Equities provide greater return potential than bonds, but with greater volatility along the way. When stocks fall, bonds usually act as a counterweight to cushion the decline in stocks. By including both equities and bonds in your portfolio, you can strike a balance between growth and capital preservation.

A balanced portfolio can be ideal for many investors. For example, you may have a financial goal (buying a property, your child’s education, etc) that’s about five to 10 years away. Or you may be new to investing and haven’t had much experience with market ups and downs.

Having a balanced portfolio means that while you’ll take some risks to grow your investments moderately over time, you aren’t likely to experience the large fluctuations an equity-heavy portfolio could encounter.

A look at the Syfe Core Balanced portfolio

If you’re looking for a balanced portfolio, Syfe’s diversified Core Balanced portfolio could be an option. It is a medium-risk portfolio designed for investors seeking moderate long-term growth.

The portfolio invests in a diversified mix of equities, bonds and gold through quality exchange-traded funds (ETFs) and individual stocks that are managed by leading financial institutions such as Vanguard, BlackRock and State Street.

In essence, the Core Balanced portfolio provides exposure to over 3,500 different companies from the world’s fast-growing sectors. These include Apple, Microsoft, Alibaba, PepsiCo, Johnson & Johnson and Tencent Holdings.

Enhanced Chinese exposure

What sets the Core Balanced portfolio apart from others is how its equity component has been optimised using Syfe’s Smart Beta strategy.

Our Smart Beta strategy tilts portfolios towards three classical factors – large-cap, growth, and low-volatility – to generate better risk-adjusted returns.

Read more: What is Smart Beta? Why is it a good investment strategy?

Apart from the factors highlighted above, we’ve also included broader sector and geographical factors.

With China poised to deliver “one of the strongest and fastest macro recoveries in 2021 among major economies globally”, according to Goldman Sachs, investors are seeking greater exposure to China.

This is a key reason why the Core Balanced portfolio holds a 7% geographical allocation to China.

These ETFs are well placed to perform over the long term and provide investors with solid exposure to China’s growth.

Read more: Understanding our Core portfolio strategy

Historical performance

The Core Balanced portfolio aims to maximise long-term risk-adjusted returns, as measured by the portfolio’s Sharpe Ratio. With an annualised return of 4.75% since April 2013 (as of 30th Jun 2022 14:30 HKT), it has also outperformed its S&P Target Risk Moderate benchmark to date.

Managed for you

As with all Syfe portfolios, we’ll do the heavy lifting for your Core Balanced portfolio so you don’t have to. This includes consistent monitoring, automatically reinvesting your dividends, and rebalancing your portfolio twice a year.

The rebalancing is carried out in line with our focus on maximising portfolio risk-adjusted returns, with asset allocation informed by our risk budgeting process and an optimised exposure to Smart Beta factors.

Along the way, you’ll be able to see how your portfolio is performing on your Syfe dashboard and make adjustments to your investment plan to keep on track with your goals.

Built for regular investing

Investing regularly, also known as dollar-cost averaging, is key to growing wealth over time. With your Core Balanced portfolio, you can invest any amount you prefer and thereafter, set up a recurring bank transfer to invest on a regular basis.

Think of it as a regular savings plan (RSP) but with absolutely no minimum investment amount or sales charge per transaction. In fact, Syfe absorbs all brokerage commissions, making Core portfolios more cost efficient than investing in the underlying ETFs and individual stocks on your own.

Overall, investors only pay a low annual fee starting from 0.35% per year for our services in managing their Syfe investments.

Getting started

If you’re new to Syfe, create your Core Balanced portfolio by signing up here. Our Wealth Experts are also on hand to help you decide which portfolio type is right for you.

Meanwhile, Syfe customers can add the new Core Balanced portfolio by clicking the “Add Portfolio” button on their Syfe account dashboard.

Need help? Check out our Help Centre for frequently asked questions about Syfe Core.