Key Takeaways
- Syfe Core Portfolios outperformed both benchmarks and peers in 2024, following major enhancements.
- Despite a year of volatile interest rates, Income+ Portfolios delivered steady returns that outpaced the broad bond markets. The distribution yield for Income+ Preserve increased from 4.5% – 5.0% p.a to 5.0% – 5.5% p.a., following re-optimisation.
- In Q3 2024, we introduced the S&P 500 Downside Protected Portfolio (Protected Portfolio) to provide you with innovative tools for structuring your portfolios.
Table of Contents:
Core Portfolios: Outperform Benchmarks and Peers following Strategic Enhancements
Income+: Strong Performance Amid Uncertainty
Syfe REIT+ : S-REITs Deserve a Closer Look
Specialised Portfolios: More Ways to Grow and Diversify
Cash+ : A Better Way to Manage Your Short-Term Cash
Syfe Core Portfolios: Outperform Benchmarks and Peers following Strategic Enhancements
Performance Spotlight: 2024 was an exceptional year for Syfe’s Core Portfolios, with every portfolio delivering returns that outpaced their respective benchmarks. Earlier in the year, we introduced several enhancements to the portfolios, and we’re thrilled to see these changes already making a positive impact for our clients. Explore in detail the performance metrics of Core Portfolios.
The Core Equity100 portfolio delivered a remarkable 21.7% return in SGD for 2024, outperforming the benchmark MSCI All Country World Index. It also outpaced our peers by 2–4% during the year.
Additionally, the multi-asset portfolios – Core Growth, Core Balanced, and Core Defensive – generated strong returns of 17.5%, 13.4%, and 10.3%, respectively, all exceeding their benchmarks.
The portfolios benefitted from the global market rally in 2024, with strong contributions from US equities. Meanwhile, a stellar year for gold added further gains to the multi-asset portfolios.
The October 2024 portfolio rebalancing also played a significant role in driving outperformance. Here’s how:
- Equity portfolios: The factor-based enhancements (size, value, and quality tilts) contributed an additional +0.7% performance in Q4 alone. These strategic tilts, grounded in academic research, have historically driven long-term returns and complement the globally diversified structure of our portfolios.
- Multi-asset portfolios: The upgrades to fixed income, including UCITS ETFs for improved tax efficiency, shortened duration and the addition of investment-grade and high-yield corporate bond overlays, enhanced stability and income potential. The gold allocation, reduced as part of our asset class risk budgeting framework, also delivered strong performance as the commodity continued to rally in Q4.
Looking Ahead: 2024 rewarded investors who stayed invested and maintained well-diversified portfolios. The year’s performance underscored the effectiveness of our enhanced, factor-driven strategy – with tilts towards value, quality, size, and growth – alongside fixed-income adjustments to bolster stability and income potential. We remain committed to this approach in 2025, striving to deliver resilient, returns-focused portfolios. If you’d like to revisit the strategy behind our portfolios, click here or for a refresher on what we mean by factors.
Syfe Income+: Strong Performance Amid Uncertainty
Performance Spotlight: Interest rates have been volatile throughout the year. Despite the Fed initiating a rate-cutting cycle in September, yields have increased. The 10-year Treasury yield, a key indicator of economic health, ended higher in 2024. This movement was partly driven by concerns that the new president’s tariff and immigration policies could stoke inflation, which can keep rates elevated for longer.
Amid these uncertainties, Income+ portfolios still managed to deliver a standout performance in 2024. Income+ Preserve and Enhance achieved returns of +3.6% and +6.3% respectively in 2024, significantly outpacing the broader bond market. This outperformance highlights the value of an active and nimble investment approach, with key contributors including high-yield bonds, Asian credits, and capital securities.
Monthly Payout: Income+ portfolios have upheld their promise of attractive monthly payouts. A re-optimisation in July to enhance distributions proved effective. The Income+ Preserve portfolio’s annualised distribution yield rose from 3.9% in Q2 to 5.2% in Q3, prompting an upward revision of the target distribution yield from 4.0%-4.5% to a new range of 5.0%-5.5%. The Income+ Enhance portfolio maintained an annualised distribution yield within its target range of 5.5%-6.0%.
Looking ahead: The current market environment offers compelling opportunities for investors. With a Yield-to-Maturity (YTM) of 6.6% to 7.2% p.a. and a distribution yield of 5.0% – 6.0% p.a, Income+ Portfolios allows you to lock in attractive yields.
In addition, active management offers a strategic advantage. Income+ Portfolios leverage PIMCO’s active management expertise in bonds, with flexible duration management to navigate various interest rate scenarios. While the Fed may cut rates at a slower pace, other central banks are expected to cut rates more rapidly. The Portfolios’ global positioning can capitalise on significant movements in other markets. This flexible and diversified strategy becomes even more vital as we enter 2025, where uncertain policies could lead to divergent market scenarios.
Syfe REIT+ : S-REITs Deserve a Closer Look
Performance Spotlight: S-REITs had a rollercoaster ride in 2024. The sector rallied close to 20% in Q3 but gave back most of those gains by the end of the year. The business fundamentals remained strong—occupancy levels stayed high, and rental reversions were positive across most S-REITs. However, the macroeconomic headwinds, including higher rates and strong Singapore dollar, have tempered some of these operational gains.
REIT+ Portfolio(100% REITs) ended 2024 down -6.5%. However, the portfolio still managed to outperform the benchmark, which is a positive takeaway. Specialised S-REITs, led by Keppel DC REIT, delivered an impressive +9.7% total return. This marks their second year in a row as the top-performing subsector after their strong performance in 2023. Healthcare and retail S-REITs also posted solid returns. On the flip side, industrial, diversified, and hospitality S-REITs struggled, ending the year as the weaker subsectors.
Looking ahead: S-REIT returns have historically been sensitive to movements in US Treasury yields. Typically, when Treasury yields rise, S-REITs tend to face selling pressure. Recently, we saw the US 10-Year Treasury yield climb sharply, rallying nearly 120 bps from 3.6% in October 2024 to close to 4.8% by early January 2025. In our view, much of the repricing triggered by Trump’s re-election has likely already played out.
For investors looking to build passive income over the long term, S-REITs remain an attractive option due to their tax-efficient structure. Current valuations also look compelling, making it a good time to consider accumulating S-REITs gradually, as advised through a dollar-cost averaging approach.
Specialised Portfolios: More Ways to Grow and Diversify
Downside Protected Portfolio
We introduced the S&P 500 Downside Protected Portfolio (Protected Portfolio) in Q3 2024 to provide you with innovative tools for structuring your portfolios. The Protected Portfolio is constructed with a new series of ETFs, which make use of simple option strategies to provide a high level of protection against downside losses (in USD). It offers a less volatile alternative to participate in the S&P 500’s upside while protecting against downside risks.
During early August, when the S&P 500 was sold off by -8.5% due to recession fears, the Protected Portfolio declined by only -1.8%, achieving its aim to cap downside losses during market pullbacks.
For 2025, we believe that the market has a higher likelihood of sudden pullbacks, driven by policy uncertainties, potential trade disruptions from President Trump’s “America First” initiative, and current high valuations. In addition, asset classes tend to react similarly to macroeconomic factors and move in tandem, as we saw during the first few trading days of the year. The Protected Portfolio has a lower correlation with major asset classes and acts as a valuable diversifier.
Thematic Portfolios
- Disruptive Technology led among Thematic portfolios with a +29.5% gain in 2024. We believe AI remains in its early stages, with companies focusing on building foundational infrastructure like AI-related data centers. AI continues to establish itself as a transformative megatrend, far beyond short-term hype. To capture the full potential of the AI revolution, we enhanced the portfolio by adding CHAT (Roundhill Generative AI & Technology ETF), SMH (VanEck Semiconductor ETF), and SNSR (Global X Internet of Things ETF) to the portfolio. This strategic mix positions you to benefit from the explosive growth of AI and its entire supply chain.
- Despite a volatile year, the China Growth Portfolio closed 2024 with a solid +14.1% return, thanks to strong policy support. Looking ahead to 2025, we see reasons for optimism. Current valuations are deeply discounted, and sectors like e-commerce, gaming, consumer durables, and industrials are well-positioned to benefit from global supply chain shifts and robust domestic demand. Continued policy support is expected to stabilize the economy and provide a strong foundation for the stock market.
- The other two themes—Healthcare Innovation and ESG & Clean Energy—delivered moderate returns, as investors favoured high-growth tech stocks over more defensive sectors. Both sectors also face short-term policy uncertainties. In particular, ESG & Clean Energy investments have been impacted by policy shifts under President Trump’s “America First” agenda, which prioritises traditional energy industries over renewable initiatives. This has dampened near-term momentum, even as long-term growth prospects remain intact.
Syfe Cash+ : A Better Way to Manage Your Short-Term Cash
As the Fed began cutting rates, we saw banks reduce deposit rates, and cash instruments like T-bills declined throughout the year. Despite this, our Cash+ solutions continue to stand out, delivering superior returns, greater convenience, and no strings attached.
Cash+ Flexi： Cash+ Flexi (SGD) delivered a solid +3.7% in 2024, while Cash+ Flexi (USD) achieved +5.4%, both in line with the projected yields at the start of 2024. Currently, the projected yields remain attractive at 3.4% and 4.3% p.a. respectively.
Cash+ Guaranteed: Cash+ Guaranteed returns of up to 3% p.a, with no fees and no minimum or maximum deposits. For those seeking greater flexibility, the new 1-Month Cash+ Guaranteed offers the same great benefits with a shorter commitment.
Market Outlook 2025
As we look ahead to 2025, market volatility is expected to rise, fueled by policy shifts following President Trump’s re-election. Yet, this shifting landscape offers unique opportunities for investors willing to adapt and stay the course.
With the Fed’s responsive policies and the transformative growth of AI, the foundation for economic expansion remains strong. A diversified approach will be key to navigating uncertainties while capitalizing on the opportunities created by evolving market trends.
Dive into our top themes and strategies to position your portfolio for success in 2025.
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