The Power Of A Risk-managed, Diversified Portfolio

The S&P 500 has fallen 31% to date. In the same time period, Syfe’s portfolio only dipped 10%.

Many portfolios have been hit hard by the swift and unexpected market drop. But Syfe portfolios across all risk categories have remained remarkably resilient, experiencing smaller dips in value as compared to our benchmarks and the broader market. 

The key is ample diversification, combined with dynamic risk management. A diversified portfolio of equities, bonds and commodities, further calibrated to your risk tolerance, limits large losses in turbulent times while benefiting from growth in rising markets. 

Comparison of the Syfe 15% Downside Risk portfolio with its benchmark and the broader market between February 24 and March 23

The S&P 500 has dropped 31% in just a month from February 24 to March 23. In the same time period, Syfe’s portfolio only dipped 10% while the benchmark Morningstar Moderate Index fell 21%.

In fact, even as markets continued to slide the past few days, the Syfe 15% Downside Risk portfolio bucked the trend to register slight gains. This is how Syfe managed the portfolio.

  • Due to increased volatility, Syfe’s ARI investment strategy quickly pulled back on some of the allocation to equities, while increasing the share of bonds from 18% to 75%.
  • This kept portfolio risk in line with our investors’ risk tolerance. With less volatility experienced, they were less likely to panic sell when markets tumbled.
  • This portfolio allocation will not be permanent. When volatility starts to subside, the share of equities in the portfolio will increase again to benefit from the recovery.
  • During the financial crisis in 2008, Syfe similarly managed risk when volatility was rising, and bought into equities again when volatility started to abate. Syfe’s risk management strategy limited portfolio losses, giving them a headstart once markets started to recover. 

If you want to know how you can benefit from a diversified, risk-managed portfolio, start by taking our Risk Questionnaire to view the ideal portfolio for your risk appetite. Our financial advisors are also here for you in these uncertain times. Simply schedule a call with them to get investment advice or have your questions answered.