Every investor has a preferred investment style that’s based on their own unique goals, risk appetite and investing timeline.
For instance, if you prefer a high-risk, high-reward approach to investing, and intend to stay invested for the long haul, your style may be more growth-oriented.
If you don’t have the stomach for the ups and downs the stock market can experience, or are nearing a particular financial goal such as retirement, your style of investing may be more defensive.
And if you want positive long-term returns with a moderate level of risk, a balanced approach might better suit your needs.
No matter which style you go with, there is a Syfe Core portfolio that fits your goals.
The only portfolio you need
As its name suggests, Syfe Core is designed to be your core portfolio. That’s why it’s a complete portfolio of stocks, bonds and gold that’s globally diversified across 23 markets.
Each Core portfolio is built with market-leading exchange traded funds (ETFs) that are managed by the world’s largest asset managers such as BlackRock, Vanguard, and State Street. Through these ETFs, the companies you’ll invest in include Apple, Microsoft, Alibaba, PepsiCo, Johnson & Johnson and Tencent Holdings.
All in all, Core portfolios offer exposure to over 3,500 different companies from fast-growing sectors like technology and healthcare.
Not your typical portfolio
What differentiates Core from traditional robo-advisory portfolios is the combination of Syfe’s Smart Beta strategy and Asset Class Risk Budgeting methodology with risk parameters that are calibrated for a longer term risk horizon.
Syfe’s Smart Beta strategy tilts portfolios towards three classical factors: Large-cap, growth, and low-volatility. These factors have been selected to generate better risk-adjusted returns for Core portfolios.
Positioned for a fast-changing world
Apart from the three traditional Smart Beta factors highlighted above, we have also included broader sector and geographical factors as well via 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 Core portfolios include 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.
Portfolio Efficiency and Risk Budgeting
While the principal objective is to maximise the overall portfolio’s risk-adjusted returns, as measured by the portfolio’s Sharpe Ratio, Asset Class Risk budgeting is a risk-based method of portfolio allocation whereby the overall risk of the portfolio is distributed among various asset classes.
As a simple illustration, based on historical data, the Core Balance strategy has an overall portfolio risk (as measured in standard deviation of returns) of 6.5% p.a. How should this risk be “spent” across the portfolio components – stocks, bonds, and gold – given that each asset class has its own level of risk?
This is where Syfe’s investment team will optimize the portfolio weights of each asset class to meet the overall risk budget of the portfolio while seeking to achieve the maximum Sharpe Ratio possible.
Core portfolios aim to maximise long-term risk-adjusted returns and they have outperformed their respective S&P Target Risk Index Series benchmarks to date.
This outperformance lends weight to our Smart Beta methodology and the increased focus on Chinese stocks.
Managed for you
As with all Syfe portfolios, we do the heavy lifting for your Core portfolio so you don’t have to. This includes consistent monitoring, automatically reinvesting your dividends, and rebalancing your portfolio twice a year.
The Core portfolios will be rebalanced in April and October each year in accordance with our focus on maximizing portfolio risk-adjusted returns, i.e Sharpe Ratios, 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 Core portfolio is performing on your Syfe dashboard and make adjustments to your investment plan to keep on track with your goals.
You can set up more than one Core portfolio, depending on your investment objectives. For example, you may invest in Core Growth for a long-term goal like retirement and choose Core Defensive for a shorter term goal such as a house downpayment.
Built for regular investing
Investing regularly, also known as dollar-cost averaging, is key to growing wealth over time. With Syfe Core, 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 Core portfolios 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 with Core
Meanwhile, Syfe customers can add the new Core 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.