Syfe Portfolio Performance Review Q1 2025: A Bumpy Start

April 17, 2025

After a strong end to 2024, the first quarter of 2025 began with global financial markets facing headwinds. Optimism has waned, as a mix of geopolitical tension, shifting economic policies, and fluctuating market expectations has created global uncertainty.

For Syfe investors, this quarter underscores the importance of diversification. Our managed portfolios are thoughtfully designed with distinct strategies to suit different goals—whether you’re aiming for growth, generating consistent income, or prioritising capital preservation. This well-structured suite of portfolios has helped investors navigate different market conditions with greater confidence and stability.

Here’s a closer look at how Syfe’s managed portfolios performed in Q1 2025, and the key drivers behind their performance.

Key performance highlights for Syfe Portfolios in Q1 2025:

Core Portfolios: Diversification pays off
Income+ Portfolios: Resilient returns amid volatility
REIT+ Portfolios: Yield remain compelling
Specialised Portfolios: More ways to grow and diversify
Cash+ Portfolios: Positive and stable returns
Our Thoughts For Q2 2025

Core Portfolios: Diversification Pays Off

Performance Spotlight

Global equities have faced turbulence recently, driven largely by renewed trade war concerns under the Trump administration. US stocks saw a notable pullback, with the Nasdaq Composite down -15.4% year-to-date (YTD). In particular, a number of widely-held stocks experienced steep declines. For instance, Tesla fell -36.3% and Nvidia dropped -24.5% YTD (in USD, as of 16 April 2025).
Our Core Equity100 portfolio, which is fully invested in equities, was not immune to this market volatility. It declined -3.6% in Q1 and a further -6.3% in the first half of April. That said, the drawdown was less than that of the S&P 500 and Magnificent 7. This relative outperformance reflects the benefits of diversification in-built in the Core portfolios —across both geographies and investment factors—compared to portfolios heavily concentrated in US or tech stocks.
Meanwhile, our more diversified portfolios—such as Core Balanced and Core Defensive—demonstrated greater resilience. In particular, strategic allocation to the SPDR Gold Trust (GLD) contributed positively to the returns and provided an effective hedge amid rising geopolitical tensions.
Overall, our balanced approach helped our portfolios stay resilient, especially when compared to more concentrated or higher-risk strategies.

Looking Ahead: Stay the Course

Markets may remain volatile in the near term, especially with ongoing headlines around Trump’s trade policies. But time and again, markets have proven their ability to recover and move higher over the long term.

One way to ride out the volatility is through Dollar Cost Averaging (DCA) or Enhanced DCA (EDCA) into our Core portfolios. DCA involves committing a fixed amount at regular intervals. This naturally leads to buying more when prices are low and less when they are high. EDCA takes a step further by adjusting the investment amount based on market conditions. This allows for a more responsive strategy.

In our recent webinar, “Market Downturn Playbook: How to Invest During Turbulent Times”, we walked through how DCA and EDCA held up during past crises like the 2008 Global Financial Crisis and the 2022 rate hike cycle. Watch the webinar here to see how staying disciplined can help you stay invested, make the most of market swings, and avoid emotional decisions.

Income+ Portfolios: Resilient Returns Amid Volatility

Performance Spotlight

The Income+ Portfolios continued to deliver steady performance in Q1 2025. Income+ Preserve returned +2.0%, while Income+ Enhance gained +2.1%—both significantly outperforming the broader bond market. This follows a strong outperformance in 2024, highlighting both portfolios’ consistency in delivering income and stability.
Moving into April, some of those gains were given back. Higher US Treasury yields and broader credit spread widening have put pressure on most fixed income assets. These challenging market conditions have negatively impacted Income+ performance.
Despite the turbulent market conditions, the Income+ portfolios continued to deliver on their promise of attractive payout yields. In Q1 2025, the annualised distribution yield stood at 5.3% for Income+ Preserve and 5.5% for Income+ Enhance—within their respective target ranges.

Source: Syfe, PIMCO. As of 15 April 2025.

Looking Ahead: Well positioned to weather the tariff storm

Income+ portfolios are well-positioned to weather the tariff storm. They have a higher allocation to quality fixed income, with an average credit rating of A+ for Income+ Preserve and A- for Income+ Enhance. This positioning helps them better withstand volatility, especially in the event of an economic recession. Some underlying funds in the portfolios are also increasing allocation to inflation-linked assets, such as US TIPS, to hedge against potential upside surprises in inflation.

Another key advantage for Income+ Portfolios is the flexibility. Income+ Portfolios have the ability to re-optimise based on the forward guidance from PIMCO, and the underlying funds are actively managed. This allows for swift re-positioning to take advantage of market volatility.

REIT+ Portfolios: Yields Remain Compelling

Performance Spotlight

Syfe REIT+ (100% S-REITs) had a solid Q1 2025, and delivered a +3.1% return, outperforming its benchmark and major S-REITs ETFs.
However, the ongoing uncertainty caused by tariff-induced trade tensions has led to weaker investor sentiment, which extended to S-REITs. The REIT+ (100% REITs) portfolio had fallen by -5.3% in April (as of 15 April 2025), reversing the positive performance in Q1. Despite this pullback, the REIT+ (100% REITs) portfolio has still managed to outperform the benchmark (iEdge S-REIT Leaders Index) YTD and fared better than most equity indices.

Looking Ahead: Offering a defensive edge in uncertain times

For investors concerned about a global slowdown, S-REITs may help offer some shelter. Historically, S-REITs have a low correlation with global equities.

Compared to the broad S-REITs sector, our REIT+ (100% REITs) portfolio is more defensively positioned. The portfolio excludes USD-denominated REITs. This helps to reduce exposure to USD currency risk—a key concern for investors in the current environment. The portfolio focuses solely on the top 20 SGD-denominated S-REITs, which generally have better asset quality and lower leverage.

The REIT+ (100% S-REITs) portfolio currently offers a dividend yield of 6.0% p.a., higher than other popular income-generating instruments such as the SPDR Straits Times Index ETF (4.8% p.a.) and Singapore Savings Bonds (yield of latest issuance: 2.49% for Year 1). This makes the REIT+ portfolio particularly appealing to income-focused investors.

We continue to see value in quality REITs, which offer the potential for both steady income and capital appreciation in a rate-cutting environment.

Specialised Portfolios: More Ways to Grow and Diversify

Protected Portfolio

Amid volatile market conditions, the Protected Portfolio has demonstrated resilience both in Q1 and month-to-date in April

In Q1, while the S&P 500 declined by -4.3%, the Protected Portfolio was down only -0.3%.
During the sharp sell-off in April—when both US equities and bonds fell—the Protected Portfolio held up relatively well, with a drawdown of just -0.4%(as of 15 April 2025). This highlights the portfolio’s strong diversification benefits, especially in periods when most asset classes move in the same direction.

It’s also a reminder that the Protected Portfolio is designed not only to limit downside, but also to capture the upside when markets recover. For example, during the strong rally from July to December 2024, while the S&P 500 rose +8.2%, the Protected Portfolio delivered a gain of +4.5%.
As traditional assets become increasingly correlated in response to macroeconomic shocks—as seen in early 2025—the Protected Portfolio offers a lower correlation and acts as a powerful diversifier for uncertain times.

Thematic Portfolios

Among thematic portfolios, the China Growth Portfolio has held up relatively well. This follows a strong 2024, where the portfolio delivered a solid return of +14.1%. In Q1 2025, the China Growth Portfolio increased by +7.6%, driven by optimism surrounding China’s AI sector, and a shift in policymakers’ stance toward the broader technology and AI sectors. Even though China’s equity markets pulled back during the first few trading days of April, the magnitude of the decline was in line with—or smaller than—regional markets.

Our China Growth Portfolio remains well positioned in China’s structural and innovation-led growth space, and is well placed to capture future opportunities.

The other three thematic portfolios – Disruptive Technology, Healthcare Innovation and ESG & Clean Energy – delivered more subdued returns in Q1 2025. In particular, Disruptive Technology saw a sharp decline, mainly because this sector had been heavily weighted by investors over the past two years. As a result, it was more vulnerable when the market turned.

Despite the current noise surrounding tariffs dampening the sentiment, AI remains a key long-term megatrend. The Disruptive Technology portfolio is strategically structured to capture the full-potential of AI revolution, with targeted exposure to generative AI, robotics, fintech & blockchain and cloud computing.

Cash+ Flexi: Positive and Stable Returns

Performance Spotlight

In Q1 2025, The Cash+ SGD Flexi portfolio returned +0.7%, while the Cash+ USD Flexi portfolio delivered +1.1%. During the major market selloff in the first week of April, Cash+ Flexi portfolios held up well and delivered a return +0.1% to +0.2%.
These returns reflect the portfolios’ high-quality money market fund holdings, which remained resilient even as market sentiment shifted due to geopolitical tensions and post-Fed rate cut adjustments.

Cash+ Flexi offers an attractive, low-risk alternative for parking emergency funds or cash needed for short-term needs. It also offers the added benefit of liquidity, allowing withdrawals within 1 to 2 working days.

Looking Ahead: Reevaluate your idle cash

With market pricing in further rate cuts later this year and cash yields likely to trend lower, now may be a good time to reconsider how much idle cash you’re holding. Historically, periods of monetary easing have benefited a range of asset classes—from bonds to REITs and equities. Beyond your short-term needs, reallocating a portion of your cash into longer-term investment opportunities may help you capture higher returns in a falling rate environment. Investors can also reallocate their investments in tranches to better manage the market fluctuations.

Our Thoughts For Q2 2025

President Trump’s “Liberation Day” tariff announcement has set the stage for potential heightened market uncertainty in the months ahead. While a 90-day pause was introduced shortly after, China remains the main tariff target, and the long-term economic implications are far from clear.

The outcome from here could vary significantly, depending on how trade negotiations evolve and how policymakers respond. In a more optimistic scenario, some tariffs could be rolled back, and the Fed could continue easing cautiously. Later in the year, potential deregulation and tax cuts could help reignite market sentiment.

In a more challenging scenario, tariffs remain in place for longer. This could lead to stagflation—i.e., economic growth slows while inflation rises. The Fed may be forced to pause rate cuts or even raise rates, despite the economic cost.

In both cases, we believe staying invested in a well-diversified portfolio is the most effective way to weather uncertainty. In our latest Ask-Me-Anything session, Global Market Shake-Up: What Trump’s Tariffs Mean for You, we shared our views on key questions such as whether stagflation is a major concern and if now is a good time to buy the dip. Here’s a quick recap of the webinar.