Do you ever find yourself wishing there was a way to maximise your exposure to global equities and take advantage of the market recovery? Or perhaps you’re looking for a high-return investment that will complement your bond holdings or your CPF?

Some Syfe customers do. The Core Equity100 is a portfolio for experienced investors who are comfortable with periods of volatility to achieve higher risk-adjusted returns over the long-term.

What’s in Core Equity100?

Core Equity100 holds selected equity exchange traded funds (ETFs) that together invest in over 5,000 top companies from around the world. Microsoft, Nvidia, Amazon, Facebook, Procter & Gamble, Alibaba, and more are among some of the key stock holdings in the Core Equity100 portfolio. Learn more here.

How are the ETFs in Core Equity100 selected?

Core Equity100 is built on the principles of global diversification and a smart beta approach our investment team has constructed. 

Firstly, global diversification matters. It positions your portfolio for long-term growth and can help mitigate the risks of an economic downturn in Singapore. To provide exposure to a broad range of global markets, Core Equity100 includes the following ETFs: 

US market exposure

iShares Core S&P 500 UCITS ETF (CSPX). The CSPX tracks the performance of the S&P 500 index and includes Microsoft, Apple, and Amazon as its top holdings. 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%. 

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

Developed and emerging markets exposure

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

iShares Core MSCI EM IMI UCITS ETF (EIMI). EIMI provides exposure to over 2,000 stocks from emerging market countries, including China, South Korea, India and Brazil. Its top holdings include Taiwan Semiconductor Manufacturing Company, Alibaba, Tencent, Samsung, and Reliance Industries. 

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.

Collectively, these ETFs allow you to invest in more than 5,000 companies in the US, developed market countries in Europe, Australia and Asia, and emerging market countries such as China, India and South Korea.

Understanding Syfe’s Smart Beta approach

On top of global diversification, we layer on a smart beta approach. Smart beta draws on a wide range of academic research that postulates how certain factors drive investment returns. Simply put, it is a strategy that seeks to capitalise on certain performance factors to deliver higher risk-adjusted returns at a lower cost. 

Watch our explainer video on our Core portfolios here:

The Fama-French three-factor model

Conceptualised by Nobel laureate Eugene Fama and Kenneth French in 1992, the model states that market returns can be explained by three factors — size, value, and market risk. This was later extended to five factors including quality (or profitability).

Fama and French found that, over time, small-cap stocks earned higher returns than stocks with a large market cap on a systematic basis. The value factor was established based on the stronger performance of stocks with a low price to book ratio (i.e. value stocks) as compared to stocks with a high price to book ratio (i.e. growth stocks). Quality as an investment factor targets companies with strong fundamentals, such as high profitability, stable earnings, and solid balance sheets.

Dive deeper into our smart beta strategy here. 

What ETFs form our Smart Beta strategy? 

To optimise the Core 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.

Core Equity100 has a tilt towards value, size, and quality. The ETFs that represent the three factors are highlighted below.

VanEck Morningstar Wide Moat ETF (MOAT). MOAT provides exposure to companies with sustainable competitive advantages (economic moats, a quality tilt) in the US at attractive prices (a simultaneous value tilt). Top holdings include Adobe, Salesforce, Pepsico Inc, and Gilead Sciences. 

Xtrackers S&P 500 Equal Weight UCITS ETF (XDEW). XDEW is an equal weighted ETF that tracks the S&P 500 index. XDEW adds a size factor tilt which helps moderates the concentration risk of the S&P 500.

Dimensional US Targeted Value ETF (DFAT). DFAT provides integrated exposure to size, quality and value by investing in over 1400 small and mid cap US companies (size) specifically targeting profitability (quality) and attractive pricing (value). Top holdings of DFAT include Chesapeake Energy, Invesco, and Sofi Technologies.

Learn more about these ETFs here. 

How is Core Equity100 different from investing in global equity ETFs directly?

Investing in global equity ETFs directly involves selecting and managing individual ETFs to achieve desired exposure across regions and sectors. This approach requires active oversight, including rebalancing and tax optimisation, which can be time-consuming and complex.

In contrast, Syfe’s Core Equity100 offers a fully managed, hands-off investment solution. Constructed using a selection of equity ETFs that invest in over 5,800 top global companies across various markets, this portfolio offers extensive diversification that provides robust long-term growth potential.

On top of the Core Equity100’s Smart Beta strategy that helps it enhance risk-adjusted returns, you will also have Syfe’s wealth managers overseeing the portfolio, handling tasks like fund selection, rebalancing, and tax optimisation. This professional management allows investors to benefit from global equity exposure without the need for active involvement, making it an ideal choice for those seeking a simplified investment experience.

Schedule a free consultation with our dedicated financial advisors. They will be able to offer personalised investment advice that can help achieve your financial goals.

How do I set up Core Equity100? 

The advantage of Core Equity100 over a DIY approach to ETF investing is cost efficiency. Syfe’s $0 brokerage charge and $0 withdrawal fee makes the portfolio ideal for investors who wish to invest regularly. Moreover, our fees start from just 0.4% per annum. 

Core Equity100 can be used as a standalone portfolio or as part of a core-satellite investing approach, whereby customers use our Global Portfolio as their “core” investment and the Core Equity100 as a “satellite” diversifier. 

Investors new to Syfe can create their Core Equity100 portfolios here. Syfe customers can add the new Core Equity100 portfolio by clicking the “Add Portfolio” button on their Syfe account dashboard.

Read More:

Inside Syfe’s Core Equity100 Portfolio
2024: Core Portfolios All Outperform Benchmarks and Peers following Strategic Enhancements
A Smarter Factor Investing Strategy You Can Get Behind