We have re-optimised your Core portfolios (Equity100, Growth, Balanced, Defensive) and Thematic portfolios (Disruptive Technology, Healthcare Innovation, and ESG & Clean Energy). Syfe’s core and thematic portfolios are rebalanced twice a year to maintain their strategic asset allocations and enhance long-term returns.
At Syfe, we advocate a passive, long-term investment strategy. We focus on minimising cost and adopt a systematic investing approach. The current rebalance focuses on addressing price and factor drifts to keep the portfolios optimised. You can read more about our investment strategy here.
Here are the key updates to Syfe Core Portfolios
For Core Defensive, Balanced and Growth Portfolios
- After re-optimisation, the allocation to bonds in the Core Defensive, Balanced, and Growth portfolios increased by 0.9%, 2.3%, and 1.8%, respectively. Meanwhile, the allocation to equities decreased correspondingly, with the allocation to gold remaining relatively stable.
- In our Syfe Core portfolios, we use the Asset Class Risk Budgeting process to decide asset allocation. This method considers asset allocation in light of risk. With equities’ volatility rising more than bonds’, our Asset Class Risk Budgeting model suggested a higher allocation to bonds and a reduced allocation to equities.
For Equity Allocations in All Core Portfolios
- In our four Core portfolios, the weightage assigned to the value factor within equity exposure increased, while the growth and emerging market (EM) factors saw reductions.
- Our Core portfolio strategy harnesses Smart Beta factors to optimise equity allocations. The equity component considers factors like growth and value, volatility, and country exposure, all geared towards delivering superior risk-adjusted returns. We have also integrated a mean reversion mechanism into our rule-based quantitative model.
- Due to the growth factor’s outperformance YTD, our model has suggested a reduced allocation to the growth factor. Concurrently, heightened volatility led to a slight reduction in the EM factor, which is represented by Chinese equities.
Check out the updated constituent list for Core Portfolios:
Thematic Portfolio Rebalance
Like our core portfolios, thematic portfolios are risk-managed to yield long-term returns within their respective theme, sector, or country focus. China Growth portfolio underwent rebalancing in August as we have partnered KraneShares to relaunch the portfolio with a focus on China’s new economy sectors. No major additions or removals were made in the other thematic portfolios. These portfolios were primarily re-optimized due to price changes.
Disruptive Technology: Our allocation to the Global X Robotics & Artificial Intelligence ETF saw a modest uptick, whereas the Kraneshares CSI China Internet ETF (KWEB) experienced a reduction. This strategic realignment stemmed primarily from the pronounced price fluctuations observed in KWEB.
Healthcare Innovation: The same mechanism was applied to the Healthcare Innovation portfolio. The weightage of the ARK Genomic Revolution ETF was reduced, while allocations to the more stable SPDR S&P Healthcare Equipment ETF and iShares U.S. Medical Devices ETF increased.
ESG & Clean Energy: For the ESG & Clean Energy portfolio, allocations to new energy-related ETFs, including the iShares Global Clean Energy ETF, Investor ETF, and First Trust Global Wind Energy ETF, have increased. Conversely, allocations to ESG-related ETFs have decreased.
China Growth: In August, the China Growth portfolio was rebalanced to better capture the dynamism of China’s growth sector. We have collaborated with KraneShares, a frontrunner in China-themed investments, to deliver you on this new portfolio allocation.
Portfolio Performance Review and H2 Outlook
In the first seven months of 2023, our Core and Thematic portfolios captured the market’s upside and delivered commendable performance. To delve into our portfolios’ performance, refer to: Syfe’s H1 2023 Performance: A Deep Dive.
As we enter the latter half of the year, diverse investment opportunities arise, promising growth and diversified income. To harness the full growth potential in 2023 and beyond, investors must adapt to market changes and remain agile. For our insights on the second half of 2023, find out more: 2023 Mid-Year Investment Outlook: Odds Defying Growth in H1, Softer Landing in H2?
This rebalancing is covered in your fees and you will not incur any additional charges. Kindly log in to your Syfe account to view your updated Core portfolio holdings. If you have any questions, please reach out to us at firstname.lastname@example.org.