Review of Syfe Select – DIY Your Investment Portfolio With ETFs

As the robo-advisory scene gets more mature in Singapore, more products have been introduced to cater to investors with diverse needs and wealth objectives. Syfe is addressing this need by introducing Syfe Select, a product that allows investors to DIY and create their own customisable portfolios. Syfe’s clients would have direct access to a curated list of 100+ ETFs managed by renowned asset managers. Without further ado, let us understand how Syfe is giving more choice and power to investors with Syfe Select.

DIY Your Investment Portfolio with Syfe Select Custom

In the investment world, there are thousands of fund managers touting the latest investment products. Without the requisite investment knowledge, it will be difficult to sieve through those that are worth investing your hard-earned monies in. Not to worry as Syfe has already done most of the heavy lifting and separated the wheat from the chaff. Factors assessed by Syfe include low fees, high liquidity, minimal tracking difference, track record and reputation of the asset manager. By employing this rigorous selection methodology, only established fund managers (eg. BlackRock, Invesco, Vanguard etc) with proven track records make the curated list.

Each ETF is also given a Syfe Risk Rating to help investors determine whether their chosen ETF is aligned to their risk appetite. An ETF with a score of 1 is considered very low risk while an ETF with a score of 5 is considered very high risk.

As shown in Diagram 1, this list currently consists of over 100+ ETFs, comprising of both equity and fixed income ETFs, offering plenty of choices for even the most sophisticated investor.

These ETFs include thematic ETFs from cloud computing to genomic medicine; broad-based sector and geographical ETFs, S&P 500 ETFs and many more.

Under Syfe Select Custom, it is now possible to select up to a total of 8 ETFs to make up your personalised portfolio that best meet your financial goals. To help you sort better, a filter tool has been added as shown in Diagram 3.

As you build your portfolio, you can also view in-depth portfolio analysis such as overall portfolio exposures, risk level, past returns etc. Investors have free range to add or remove holdings until they are satisfied with the desired asset allocation. This flexibility is great as everyone has different personal circumstances that will result in different risk tolerances.

However, if selecting from over 100 ETFs is a case of choice overload, not to worry because Syfe has also provided 5 thematic portfolios. Syfe’s clients can choose to adopt these thematic portfolios entirely or simply tweak their allocation to their liking.

Syfe Select Themes: Ready-made thematic portfolios

These 5 thematic portfolios are based on prevailing mega themes and offer Syfe’s customers the opportunity to capture long-term trends and structural shifts effortlessly. Emerging themes are constantly monitored by Syfe for possible inclusion but here are the 5 current thematic portfolios available:

1) ESG & Clean Energy

Probably one of the hottest investment themes right now is ESG, which stands for Environmental, Social and Corporate Governance. It is gaining mainstream momentum as investors and institutions are increasingly integrating ESG considerations into their financial analysis and the stocks they select. If you want to do well and do good at the same time, an ESG thematic portfolio may be your best bet.

Syfe’s ESG portfolio invests in socially responsible businesses with a focus on clean energy and water sustainability. There’s quite a significant exposure to solar and wind energy companies, as well as the electric vehicle (EV) industry via lithium battery companies.

The 5-year annualised returns stand at 22.39% as of 31 July 2021.

2) Disruptive Technology

The Disruptive Technology-thematic portfolio focuses on next-generation technology themes such as artificial intelligence, robotics, cloud computing, cybersecurity, fintech and more. A couple of ARK funds, namely the ARK Next Generation Internet and ARK Fintech Innovation are included in Syfe’s Disruptive Technology portfolio. Yup, these are the funds managed by Ark Invest, led by the famous Cathie Wood.

While these are possible innovations that significantly change an existing industry, product, service or create an entirely new one, investing in disruptive technologies do carry significant risks. Therefore, it is good risk management to spread the risks by buying into a diversified pool of ETFs. In this case, Syfe’s Disruptive Technology portfolio strikes a good balance between risks and returns.

The 3-year annualised returns stand at 25.22% as of 31 July 2021. Note that the 5-year annualised returns is not available.

3) Healthcare Innovation

Given the ongoing pandemic, all eyes are on the healthcare sector. However, do you know that it often takes years of R&D efforts and millions of dollars before the next blockbuster drug makes it to the market? Therefore, it is important to stay diversified as there is usually very low probability of turning scientific discoveries into commercially viable businesses.

The Healthcare Innovation portfolio by Syfe provides investors exposure across the full spectrum of healthcare stocks, from biotechnology, pharmaceuticals to healthcare services such as insurance and medical devices.

As shown in Diagram 4, 2 interesting funds within the portfolio are the ARK Genomic Revolution ETF and iShares Biotechnology ETF. These are invested in cutting-edge biopharma companies like Moderna, Amgen and Vertex Pharmaceuticals.

The 5-year annualised returns stand at 20.23% as of 31 July 2021.

4) China Growth

Plenty has happened to China’s corporate affairs recently, from a clamp down on its monopolies to companies linked to tech software and education. Its stock market has taken a beating as a result of these heavy-handed regulatory actions. Well, there are 2 sides of the coin, either China’s shares look cheap now or one could be catching a falling knife. I belong to the former category, as I am a big believer of its mega trends such as consumerism, urbanisation and technology adoption. If you share similar beliefs, the China Growth thematic portfolio under Syfe Select will allow you to participate in China’s growth story.

As shown in Diagram 5, the top holdings in the portfolio are a mix of well-established and fast growing Chinese tech companies like Tencent, Alibaba, Meituan, JD.com, and Apple smartphone camera lens maker Sunny Optical.

The 5-year annualised returns stand at 17.33% as of 31 July 2021.

5) Global Income

If an all-equity portfolio is too volatile for your liking, you may want to allocate a portion of your funds to the Global Income portfolio. It consists of a mix of investment grade, high yield corporate and government bonds. Government bonds provide stability during times of volatility while corporate bonds have higher risk but generate higher returns as well. Additionally, emerging market bonds from China, Mexico and Indonesia make up slightly more than half of the portfolio. They combine to target a blended yield of 4.25%, which is definitely not too shabby for an all-income portfolio.

The 5-year annualised returns stand at 5.01% as of 31 July 2021.

Promotion for Syfe Select

While Syfe Select is a new product offering by Syfe, they have stuck to their promise of no brokerage fees, no minimum investment amount as well as no lock-ins. Dividends are reinvested for free and the Syfe Select thematic portfolios automatically rebalanced, elements which make it suitable for dollar cost averaging. This approach is similar to its other portfolios such as Syfe REIT+ and Core portfolios.

While Syfe Select Custom portfolios are not rebalanced, dividends are still reinvested for you automatically.

Fees for both Syfe Select Custom and Theme portfolios start from 0.35% per year- the same fee as the other Syfe portfolio. Furthermore, if you sign up using the promo code “HEARTLANDBOY”, you will enjoy 3-month fee waiver on all deposits up to $30,000. This translates to savings of $37.5 from $150 worth of annual fees for an AUM of $30,000! That’s right, that is how competitive Syfe’s fees are for those looking to create a diversified portfolio via a DCA method with low fees. I set up my own account and the money was securely processed and credited, and that the funds are typically invested in 1-2 working days.

Conclusion

I feel that Syfe Select is a great platform to enhance exposure to specific trends and improve diversification of one’s portfolio. For instance, the China Growth thematic portfolio is a great way to ensure that one does not miss out on China’s next leg of growth. At the same time, as the portfolio is invested in a diverse pool of ETFs, this mitigates the nasty consequences from any new and unexpected government regulation. Therefore, Syfe Select also serves its purpose as satellite investments meant to complement one’s core portfolio holdings.

Disclaimer: This article is written in collaboration with Syfe but the views expressed here are entirely from Heartland Boy. This article is only for information and not financial advice and has no regards to any person’s investment and financial needs. Past performance of a product is not indicative of its future performance. This is not an offer, recommendation or solicitation to buy or sell any products. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Information is correct as at 6 September 2021