Inside Syfe’s Equity100 Portfolio

Equity100 is an all-equity portfolio for investors who want to maximize their exposure to global stocks.

The portfolio is constructed using equity exchange traded funds (ETFs) that collectively invest in over 3,500 stocks from the world’s top companies. These include Microsoft, Amazon, Facebook, Walmart, Alibaba, and more. 

The global building blocks of your portfolio

Equity100 uses a number of broad-based ETFs to provide international diversification across US, China, Europe and other markets.

US market exposure

iShares Core S&P 500 UCITS ETF (CSPX). CSPX tracks the performance of the S&P 500 index. Its top holdings include Microsoft, Apple, and Amazon. As CSPX is domiciled in Ireland, it is more tax efficient compared to a US-domiciled ETF tracking the same index. This is because CSPX holds a dividend withholding tax of just 15%, rather than the usual tax rate of 30%. 

iShares Core S&P Mid Cap ETF (IJH) and iShares S&P 600 Small Cap ETF (IJR). IJH provides exposure to US mid-cap stocks while the IJR provides exposure to US small-cap stocks. Their top holdings include Tyler Technology, Factset Research, Wingstop, and Topbuild Corp. 

Chinese market exposure

iShares MSCI China ETF (MCHI). MCHI provides exposure to large and mid-sized companies in China. Its top holdings include Alibaba, Tencent, Ping An Insurance and Baidu.

KraneShares CSI China Internet ETF (KWEB). KWEB provides exposure to Chinese Internet companies. Top holdings include Meituan, Pinduoduo, and JD.com.

Developed and emerging markets exposure

iShares MSCI EAFE ETF (EFA). EFA provides exposure to over 900 large- and mid-cap stocks from a broad range of companies in Europe, Australia and Asia. Top holdings include Nestle, Astrazeneca, Toyota, and LVMH.

iShares Core MSCI Emerging Markets ETF (IEMG). IEMG provides exposure to over 2,000 stocks from emerging market countries including China, South Korea, India and Brazil. Top holdings of IEMG include Alibaba, Tencent, Samsung, and Reliance Industries. 

Smart beta factor tilts

To optimize the Equity100 portfolio for better risk-adjusted returns over the long term, we’ve also employed a smart beta strategy that tilts the portfolio to three factors.

Equity100 has a moderate tilt towards growth, a geographical tilt towards China, and a low volatility tilt. The ETFs that represent the growth and low volatility tilt are highlighted below.

Growth tilt

Invesco QQQ. The QQQ tracks the performance of the Nasdaq-100 Index. Top holdings of QQQ include Apple, Microsoft, Amazon, Facebook, and Alphabet (Google’s parent company). 

Invesco S&P 500 Equal Weight ETF (RSP). RSP is an equal weighted ETF that tracks the S&P 500 index. As such, RSP adds a size factor tilt biased towards small-cap stocks. At the same time, RSP also adds a value factor tilt which helps moderates the growth factor influence from QQQ.

Low-volatility tilt

Consumer Staples Select Sector SPDR Fund (XLP). XLP provides exposure to companies from the food and staples, beverage and personal product industries. Top holdings include Procter and Gamble Company, Coca-Cola, Walmart and Mondelez.

Health Care Select Sector SPDR Fund (XLV). XLV provides exposure to companies in the pharmaceuticals and health care industries. Top holdings include Johnson & Johnson, Merck & Co., Pfizer Inc., and Abbott Laboratories.

Utilities Select Sector SPDR Fund (XLU). XLU provides exposure to companies from the utility, power producer and energy trader industries. Top holdings include NextEra Energy, Dominion Energy, Duke Energy Corporation, and Southern Company.

Technology Select Sector SPDR Fund (XLK). XLK provides exposure to companies from technology hardware, software, IT services, and more. Top holdings include Apple, Microsoft and Nvidia.