Is A Core Growth Portfolio Right For You?

Are you someone who favours a high-risk, high-reward approach to investing? A growth-oriented investment strategy may describe your investing style. 

The building blocks of a growth portfolio 

A growth portfolio is one that’s predominantly invested in equities, with a smaller allocation to bonds and other assets for diversification. Historically, stocks have delivered higher returns than bonds. As such, a larger allocation to equities tends to help maximise your return potential.

However, this also means that you need to be comfortable with the fact that your portfolio can experience large fluctuations during a market downturn. 

Are you confident that you won’t panic and sell even if markets drop significantly? Do you intend to stay invested for the long term?

If you answered “yes” to the previous questions, a growth portfolio could meet your investment needs if your goal is to generate higher returns over the long-term.

For instance, you may be working towards a long term goal of early retirement. You want to grow your wealth as much as you can during this period, and are comfortable with large fluctuations in your portfolio. If need be, you have the flexibility to push back on your investment timeline as well. (Generally, the longer your time horizon, the more investment risks you can take.)

A look at the new Syfe Core Growth portfolio

If you’re looking for a growth portfolio, Syfe’s newest Core Growth portfolio could be an option. It is designed for investors seeking to maximise the risk-adjusted returns of their portfolio over the long haul, and who are comfortable with short-term market volatility.

Here’s a look at its asset allocation and geographical exposure.

Core Growth Snapshot: Updated as of 28 Feb 2021

About 70% of the Core Growth portfolio is invested in equities via quality exchange-traded funds (ETFs) that include the following. 

Snapshot of the Core Growth ETFs

The Core Growth portfolio provides exposure to over 3,500 different companies from fast-growing sectors around the world. You’re invested in companies such as Apple, Microsoft, Tesla, Alibaba, PepsiCo, Johnson & Johnson and Tencent Holdings. 

The stocks in your Core Growth portfolio

Enhanced Chinese exposure 

What sets the Core Growth portfolio apart from others is its Smart Beta strategy and exposure to China and Chinese tech stocks.

First, Syfe’s Smart Beta strategy tilts the Core Growth portfolio towards three classical factors: Large-cap, growth, and low-volatility. These factors have been selected to generate better risk-adjusted returns.

Read more: A Smarter Factor Investing Strategy You Can Get Behind

Next, we include an enhanced exposure to China and Chinese tech stocks. 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 Growth portfolio – which has a 14% geographical allocation to China – includes the iShares MSCI China ETF (MCHI) and KraneShares CSI China Internet ETF (KWEB).

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 Growth portfolio aims to maximise long-term risk-adjusted returns. With an annualised return of 11.57% since April 2013, it has also outperformed its S&P Target Risk Growth benchmark to date. 

Source: Syfe internal backtested data, BlackRock, Invesco, Vanguard and StateStreet. Past returns are not a guarantee for future performance

Managed for you 

As with all Syfe portfolios, we’ll do the heavy lifting for your Core Growth 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 maximizing portfolio risk-adjusted returns, with asset allocation informed by our risk budgeting process and an optimized 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 Growth portfolio, you can invest any amount you prefer and thereafter, set up a recurring bank transfer to deposit funds 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 the Core Growth portfolio more cost efficient than investing in the underlying ETFs on your own. 

Overall, investors only pay a low fee starting from 0.4% per year for our services in managing their Syfe investments. 

Getting started 

If you’re new to Syfe, create your Core Growth 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 Growth portfolio by clicking the “Add Portfolio” button on their Syfe account dashboard. 

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