Dear Client,
We are recommending the following portfolio optimisation for your Income+ portfolios, in accordance with PIMCO’s asset allocation guidance.
Review of Income+ Portfolios
Since the inception on March 31, 2023, the Income+ Preserve and Enhance portfolios have delivered cumulative total returns of +4.8% and +5.6% respectively, as of March 31, 2024. They have outperformed the broad bond market — measured by the Bloomberg Global Aggregate Credit Index — by 2.4% and 3.2% respectively. This outperformance underscores the value added through active management.
Recommended Portfolio Optimisation
The suggested allocations reflect PIMCO’s latest forward-looking views, based on current market conditions. We anticipate these changes will enhance the resilience of your portfolios and improve the diversification of income sources.
Syfe Income+ portfolios are non-discretionary and require your consent for recommended portfolio changes. We highly encourage you to opt in for portfolio optimisation. This ensures that your portfolios are periodically fine-tuned to reflect updated target allocations, thereby optimising your returns. You can choose not to opt in, we will maintain your current allocation.
Income+ Preserve: New Target Allocation
For Income+ Preserve, the new target allocation has been adjusted to slightly reduce risk. Key changes include:
- Increase allocation to the PIMCO GIS Global Bond Fund and the PIMCO GIS Global Investment Grade Credit Fund to strengthen the emphasis on high-quality bonds. This change can offer greater protection in a risk-off environment.
- Decrease allocation to the PIMCO GIS Income Fund as core fixed income becomes more appealing due to higher interest rates.
- Decrease allocation to the PIMCO GIS Asia Strategic Interest Bond Fund to exercise caution in light of China’s growth uncertainties.
Income+ Enhance: New Target Allocation
For Income+ Enhance, the optimisation seeks to reduce risk and add diversification to income sources. Key changes include:
- Add the PIMCO GIS Capital Securities Fund. This fund primarily invests in subordinated debt instruments issued by banks, insurance companies, and other specialty finance entities. It offers a yield-to-maturity (YTM) of 7.9% and a distribution yield of 5.4% (as of the end of February 2024), thereby providing diversification to income sources.
- Increase allocation to the PIMCO GIS Global Investment Grade Credit Fund. This adjustment aims to enhance the quality of investments relative to the current credit profile and bolster the portfolio’s defensiveness amidst market volatility.
- Decrease allocation to both the PIMCO GIS Asia Strategic Bond Fund and the PIMCO GIS Asia High Yield Bond Fund. These adjustments aim to moderate exposure to Asian markets due to the uneven growth in China.
How to opt in for Portfolio Optimisation
For the recommended changes, you have the option to either accept or decline the recommendation. We strongly encourage you to follow the recommendations to ensure your portfolios are optimised against changing market conditions.
To opt in, navigate to any of your existing Income+ portfolios, and follow the instructions given in the banner just below the portfolio’s performance chart. Once opted in, the optimisation process starts automatically. You only need to do this once even if you have multiple Income+ portfolios. Learn more.
This portfolio optimisation is covered in your fees and you will not incur any additional charges. If you have any questions, please reach out to us at support.sg@syfe.com or call us at +65 3138 1215.
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