Syfe Select Review – Fully customisable Robo Portfolio? How would I invest with Syfe Select Themes / Custom?

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Syfe has launched a new, fully customisable ETF Portfolio builder – Syfe Select.

It’s a very interesting product, so I was keen to do a deep dive.

Note: This post is sponsored by Syfe. All views and opinions expressed in this post are from Financial Horse.

 

Basics: What is Syfe Select? Themes vs Custom

Syfe Select is a new fully customisable portfolio builder.

It’s split into 2 options:

So in essence, you can either invest in ready-made thematic portfolios or DIY your own custom portfolio. For Syfe Select Themes, there are 5 different thematic portfolios you can choose from (ESG, Disruptive Tech, Healthcare Innovation, China Growth, Global income).

For Syfe Select Custom, you can assemble any portfolio of up to 8 ETFs you like, to create your own custom portfolio.

For advanced investors who want more control over their Syfe portfolio, these are good options to look at.

Let’s dive deeper into each of these.

Syfe Select Themes

For Syfe Select Themes, you can invest from 5 different themes:

What is the Asset Allocation?

Let’s say you decide to go with ESG because you believe ESG is the future.

Syfe will then allocate into 8 ETFs that will constitute your ESG portfolio. About half of the portfolio is invested in broad ESG funds while the other half is invested in clean energy and water sustainability ETFs

Here’s a quick snapshot of some of the underlying holdings:

  • iShares ESG Aware MSCI USA ETF (ESGU)
  • iShares Global Clean Energy ETF (ICLN)
  • Global X Lithium & Battery Tech ETF (LIT)
  • Invesco Water Resources ETF (PHO)

Syfe generates a bunch of useful charts that will show you your country allocation, sector allocation, and company allocation. This allows you to know how diversified (or concentrated) you are.

There are also historical returns that show how much you would have made had you invested in this portfolio in the past. Of course, historical returns are not an indicator of future returns, but it’s still good to know, nonetheless.

Disruptive Tech

Likewise for Disruptive Tech, these are the 8 ETFs, with a fair bit of allocation into the ARK funds, eSports, Cloud Computing, Cybersecurity, China Tech and Artificial Intelligence (AI).

Here’s a quick snapshot of some of the ETFs in the portfolio:

  • VanEck Vectors Video Gaming & eSports ETF (ESPO)
  • Global X Cloud Computing ETF (CLOU)
  • Global X Robotics & Artificial Intelligence ETF (BOTZ)
  • Renaissance IPO ETF (IPO)

You can click on the links below, to find out more information on each thematic portfolio.

Asset Allocation can be tweaked (Syfe Select Themes)

One of the greatest advantages of Syfe Select Themes is that the asset allocation is fully customizable.

Let’s say you’re buying the Disruptive Tech portfolio, but you already have a big allocation to ARK ETFs in your existing portfolio.

You may decide to dial the ARK allocation down to 2-3%, and increase the allocation to Cloud Computing and China by clicking on the “Customize”option

I really like this – it allows you to tailor the portfolio based on what you already own.

Automatic dividend reinvesting and rebalancing (Syfe Select Themes)

All dividends are automatically reinvested at no extra charge.

The Syfe Select Themes portfolio is also automatically rebalanced twice a year.

According to Syfe, they may add in new themes and sectors for inclusion in the portfolio, so the asset allocation may change over time.

If you don’t wish for your thematic portfolio to be rebalanced, you can choose to “Customise” it and make a tiny change to the asset allocation (as shown above). Once you do this, the rebalancing is disabled.

There are pros and cons to this automated rebalancing.

It’s good if you want a solution to buy and forget, and leave all the rebalancing and updating work to Syfe.

But if there’s a specific asset allocation you want to achieve, then Syfe Select Themes may not work out so well – Syfe Select Custom might be more suitable for you.

Syfe Select Custom

The key highlight for Syfe Select Custom is that:

(1) you have full control over which  ETFs go into your custom portfolio (up to 8 ETFs can be added),

(2) you determine your asset allocation and

(3) there is no rebalancing.

For the more advanced investors who know exactly which ETFs they want and in what proportion, this is probably the go-to option.

All ETFs are carefully vetted and pre-curated (Syfe Select Custom)

All 100+ ETFs that you can choose from for Syfe Select Custom are pre-selected by Syfe based on:

  • Fees
  • Liquidity
  • Tracking error vs benchmark
  • Track Record
  • Reputation of Asset Manager

There are thematic ETFs covering biotech, space exploration, semiconductors, and many more trends. There are also broad sector and style ETFs like the Financial Select Sector SDPR Fund (XLF) and iShares MSCI USA Momentum Factor ETF (MTUM).

 

Examples of the Trending ETFs curated by Syfe’s investment team

Beyond equities, you can choose fixed income ETFs as well. High-yield, investment grade, government bonds, corporate bonds. There are various bond investments to choose from.

Each ETF also has a “Syfe Risk Score” that will let you know how risky the ETF is. E.g. a score of 1 is very low risk; a score of 5 is very high risk.

You can create as many Syfe Select Custom portfolios as you prefer.

Based on the ETFs you have added to your Custom portfolio, Syfe will also generate a portfolio analysis to let you know your exposure to each country, company,  the historical returns, and overall portfolio risk level – just like Syfe Select Themes.

For instance, a portfolio using ARKG, LIT, IGSB and FALN ETFs will have the following top holdings,past returns and portfolio risk level.

When you adjust your allocation, or add/remove certain ETFs, you can see how this portfolio analysis changes. Based on this information, you can tweak your portfolio until you’re satisfied with all aspects of it.

Although your Custom portfolio won’t be automatically rebalanced, all dividends you receive will still be reinvested for you at no charge.

 

Fees of Syfe Select Portfolios (Themes and Custom)

Whether you’re using Syfe Select Themes or Custom, the fee is an all-in-one fee that depends on how much money you hold with Syfe.

  • Below $20,000, you’re paying 0.65% a year.
  • From $20,000 to $100,000 you’re paying 0.5%.
  • Above $100,000 it’s 0.4%.
  • Above $500,000 it’s 0.35%.

It’s an all-in-one fee, so there are no additional fees for the rebalancing, or to redeem your investment.

You can dollar cost average any amount a month, or invest as small an amount as you want, and the fee wouldn’t change.

What I like about Syfe Select – Cost efficient, bespoke options 

One of the best parts I like about Syfe Select is the all-in-one fee for creating a personalised portfolio.

For investors who want to invest smaller amounts regularly, Syfe Select is a great feature. 

For example – If you’re investing $5,000 lump sum, and plan to invest $500 a month going forward, it’s very hard to cost effectively average into 8 ETFs a month. Even if you’re using a low-cost broker like IBKR.

So the options then are to either (1) reduce the number of ETFs you buy, or (2) save up for a few months before buying at one go.

Which is not a perfect solution.

So for dollar cost averaging smaller amounts, I think Syfe Select is an option worth considering. It offers diversification at a low price point, and may potentially even be more cost effective than DIY investing.

For more sophisticated investors?

Compared to manual DIY investing, you will be paying fees to Syfe and at the ETF level.

Which option is preferable really depends on you as an investor.

I did some rough numbers. Assuming a $100,000 portfolio, averaging in at $5,000 a month into 8 ETFs, the total cost per year on IBKR works out to about US$100+ in brokerage fees.

On Syfe Select, the same would cost you $400 in fees.

But don’t forget that with DIY, you need to login every month, and make the same 8 purchases. That’s frankly quite a lot of time and hassle, that Syfe Select will fully automate the process for you.

So again, really depends on what you want as an investor.

How to use Syfe Select to Invest?

Syfe’s recommendation is that Syfe Select be used as a satellite investment.

So you should still have a core portfolio that is broadly diversified, and you use Syfe Select as a way to add targeted exposure – for example to China Growth, or ESG.

If you’re really creative, you can also create your own portfolio with S&P500, China allocation, Bond funds and do up a DIY core portfolio on Syfe Select.

There’s a lot of optionality here.

How would I use Syfe Select within my own portfolio?

If I were to use Syfe Select for my own portfolio, it would probably be for one of the areas I am currently underexposed to.

Currently for me:

  • US Market: I buy a mix of ETF and individual stocks
  • China Market: I buy individual stocks
  • Singapore Market: I buy a mix of REITs and Stocks

The one big area I’m lacking would be ESG and Healthcare because I’m less familiar with those areas.

So if I were to use Syfe Select, the Thematic portfolios for ESG and Healthcare might come in handy.

But that’s just me, and you need to analyse your own portfolio to see how best it can fit in.

Closing Thoughts

Personally I’m a big fan of optionality, and I think that’s exactly what Syfe Select offers you.

Whether you already have a big allocation to ARK or China Tech, or want to invest thematically, Syfe Select allows you to customize a portfolio around that, and allocate to areas that you’re underexposed to.

All fully automated, and for a decently low enough fee.

Worth looking at in my books.

As always – love to hear what you think!

Promo Code

For new Syfe clients, don’t forget to use the Syfe Promo Code.

The code is: “FHWAIVER” and you will get SGD $30,000 managed FREE for 6 months.

This works out to $75 saved in fees if you invest $30,000, so don’t forget to use it if you’re signing up.

Note: This post is sponsored by Syfe. All views and opinions expressed in this post are from Financial Horse.

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.

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