Dimensional ETFs and More: New on Syfe Custom Portfolio

We are excited to introduce new equity ETFs with a value and quality tilt to Syfe Custom Portfolio. We will do a deep dive to help you decide whether the ETFs align with your investing goals, and how these ETFs can add value to your investment portfolios. 

Table of Contents:

Dimensional ETFs: Get the best of active management and low fees

Who is Dimensional Fund Advisor?

Dimensional ETFs are managed by Dimensional Fund Advisor, often referred to as Dimensional. You may be less familiar with Dimensional compared to other ETF providers such as BlackRock and Vanguard. While a relative newcomer to the ETF arena, Dimensional has operated as an established investment firm since 1981 and headquartered in the US. 

With more than three decades of experience helping clients achieve their goals, today the firm employs over 1,600 professionals spread across 15 countries and manages US$677 billion in assets under management (AUM) as of December 2023.

Dimensional’s investment strategies are built upon factor-based investing, grounded in decades of academic financial research. While many asset managers rely on stock picking or market timing, Dimensional’s approach focuses on systematically capturing premiums associated with size, value, and profitability.

Dimensional initially serviced only big institutions and advisory firms. However, in November 2020,  Dimensional made a bold move and launched its actively managed ETFs. Now ordinary investors can easily access the same strategies through Dimensional ETFs. 

How are Dimensional ETFs different from traditional ETFs? 

Dimensional ETFs differentiate themselves from the traditional ETFs in the following ways: 

  • Actively Managed: Traditional index ETFs generally aim to replicate the performance of a specific index, such as the S&P500 or Nasdaq. On the other hand, Dimensional ETFs use more active management. Not bound to indices, Dimensional ETFs aim to add value to investors through in-depth research, portfolio management and flexible trading. 
  • Factor Investing: Dimensional is a pioneer in factor-based investing, which involves targeting specific drivers of returns such as size, value, and profitability. This approach is designed to enhance portfolio returns over time by focusing on areas of the market that research suggests offer higher expected returns.
  • Small-Cap and Value Tilt: The firm gained early acclaim for concentrating on small caps and value-oriented stocks, supported by evidence showing their outperformance over time. Their equity ETFs put more emphasis on companies with smaller market capitalizations, lower relative prices, and higher profitability. This could provide diversification benefits if you already have allocations to ETFs tracking the S&P 500 or Nasdaq, which focus on large-cap and growth stocks.

Dimensional ETFs in Syfe Custom Portfolios 

Dimensional has 38 ETFs listed with a total assets of more than US$110 billion. Out of these ETFs, we have handpicked six ETFs based on factors such as AUM, liquidity, costs and investment exposure. Below is the summary of these ETFs.  

Here is the snapshot of the six ETFs: 

Source: Bloomberg, Dimensional Fund Advisors. Before being listed, the following ETFs operated as mutual funds: US Core Equity 2 ETF, US Marketwide Value ETF, US Targeted Value ETF, International Value ETF, and World EX US Core Equity 2 ETF. Data are as of 31 Jan, 2024.

Additional ETFs into Syfe Custom Portfolios 

In addition to Dimension ETFs, we have added ETFs that focus on quality factor and diversification. 

  • QUAL (iShares MSCI USA Quality Factor ETF)

QUAL invests in US large and mid-cap stocks with quality characteristics, such as high profitability, low leverage and steady earnings growth. Some of the top holdings in the portfolio include Visa, Nvidia, Microsoft, Mastercard and Apple. It has a low expense ratio of 0.15%, making it a cost-efficient way for investors to get access to US quality companies. 

  • IQLT(iShares MSCI Intl Quality Factor ETF)

Similar to  QUAL, IQLT invests in companies with quality characteristics. However, IQLT focuses on international large to mid-cap stocks. Top holdings in the portfolio include ASML, Nestle, and LVMH. This ETF provides investors access to non-US quality stocks. 

  • QQEW (First Trust Exchange-Traded Fund-First Trust Nasdaq-100 Equal Weighted Index SM)

QQEW tracks NASDAQ-100 Equal Weight Index. The ETF includes the same stocks as the NASDAQ-100 but each stock has equal allocation of 1%. This equal weighting allows higher allocation for smaller companies, and provides potential diversification benefits compared to cap-weighted ETFs.  

Source: Bloomberg, as of 31 January 2024. 

ETFs for Accredited Investors

For accredited investors (exclusively), Bitcoin ETFs are now available in the Syfe Custom Portfolio. We have selected three ETFs based on their AUM and expense ratio to offer you a cost-effective way to invest in Bitcoin. 

bitcoin etfs
Source: Bloomberg, as of 31 January 2024. 

Accredited investors can also get access to JEPQ (JPMorgan Nasdaq Equity Premium Income ETF) for enhanced income. JEPQ aims to provide investors with income and some potential for capital appreciation. A distinctive feature of JEPQ is its strategy to generate income. This involves selling options while investing in US large-cap stocks. As of 31 Jan 2024, the 12-month rolling yield is at 10.8%.

Source: Bloomberg, as of 31 January 2024. 

How to use Syfe Custom Portfolio?

We understand the paradox of choice. There are over 8,000 ETFs in the market after all. Going through all the available options and choosing the best ones for your portfolio is nearly a mission impossible. 

Our investment team has curated around 100 ETFs, based on criteria such as low fees, high liquidity, sizable AUM and solid track records. To help you kick start your journey, we’ve categorised these into four groups: Trending, Recommended, Top Performers, and Bottom Performers.

syfe custom

If you have a specific idea of what you’re searching for, the Filters feature allows you to refine the ETF universe based on asset class, risk, geography, and sector.

syfe custom

In fact, Syfe Custom Portfolio works best to complement your existing core portfolios. It is an opportunity to tactically add certain geographies, sectors and themes to take advantage of the market conditions. 

Ready to get started? Build your Custom portfolio now with no minimum investment and no brokerage fees. The fees you pay for Custom portfolios are the same as all other Syfe managed portfolios too.

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