A Look At Syfe’s New Robo-REIT+ Portfolio

Recently, Singapore’s Roboadvisor Syfe has just announced the launch of their new real estate portfolio.

As the name suggest, with the new Syfe REIT+, you get to invest in a basket of REITs in Singapore.

The portfolio also combines Singapore listed REITs and Singapore Government Bonds and rebalances both the composition based on market sentiments.

For example, during good market condition, Syfe will auto rebalance the portfolio such that there is a higher proportion of REIT and a lower proportion of bond.

Here’s a look at the Syfe REIT+ composition breakdown: 

At first glance, the Syfe REIT+ portfolio looks really enticing and sounds somewhat too good to be true!

With just a fraction of cost from as low as S$100, you can get access to all the high quality Reits in Singapore, such as Ascendas REIT, Keppel DC REIT, Mapletree Logistics / Industrial Trust and more. Investing via Syfe means you dont have to pay any additional transaction fees or CDP fees as the stocks will be hold as a custodian stocks for you.

Individually, these counters are trading at high PEs now and you will have to fork out a lot of money to own all these REITs. To buy all these individual stocks, you will have to pay the individual stock transaction fees and CDP fees. These fees will definitely add up and will not make sense for small positions of S$1000 – S$3000. I’ve previously done a calculation for the fees here.

Also Read: What Is The Ideal Stock Amount To Buy For The Brokerage Fees To Make Sense

So from a fees perspective, you will end up saving a lot just by buying these REITs via Syfe REIT+.

Returns wise, here are the projected 15 year returns provided by Syfe REIT+

The returns are also in the range of 6 – 10% IRR for a 15 year forward looking projection – and that sounds really attractive!

When I compared the returns to the global equity portfolio, the Syfe REIT+ is projected to also provide almost similar returns as the global equity portfolio, and this gave me quite a shock – Shouldn’t the global equity portfolio provide a higher return since they are a higher risk instrument and comes with more downside risk? 

For context, here’s the projected returns for the Syfe Global Equity portfolio with 25% downside risk:

Syfe Global Equity Projected Returns

The most likely returns for the global equity is at S$321,164 while it is S$315,874 returns for the Syfe REIT+ portfolio!

There are other articles that says that actually REIT as a investment class is behaving more like equities now since they are providing equity-like returns, and most REITs in Singapore has been benefitting from a low interest environment over the past few years. Hence we are seeing REIT as attractive investment options in Singapore. 

Knowing that, will we shift our monthly contribution from Syfe global equity to Syfe REIT+?

To be honest, I’m not entirely sure.

I do manage my own portfolio of REITs at this point, and can definitely use more global diversification, hence I started a RSP into Syfe’s global equity portfolio. 

While the new Syfe REIT+ provides a really attractive alternative for me to continue my exposure to Singapore’s REIT market, I guess for now it makes more sense to continue my RSP into the global equity portfolio as I have a relatively high exposure to Singapore equities and REITs. 

Here’s a look at my current portfolio composition:

Pension Fund36.03%
Global Equities13.85%
SG Equities & REITS27.03%

However, if you are looking to get really high quality Singapore REITs at a low cost, you should definitely check out Syfe REIT+. If I don’t already own some of the REITs in the Syfe REIT+ portfolio, I would definitely start a RSP into the new Syfe REIT+ portfolio.

If you do sign up for Syfe, do use my Syfe Referral Code: SRP6X8B8Y and you will receive S$50 when you invest with Syfe.

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Syfe Portfolio Update – January 2020

Frequent followers of Mr and Mrs Budget will know that Mr Budget had started a regular savings plan with Syfe, a relatively new roboadvisor in Singapore. 

The main reason why Mr Budget decided to go for Roboadvisor is because he is looking for a more affordable way to invest in multiple baskets of ETFs to get more diversification.

Another reason is that, Mr Budget views roboadvisors as the professionally managed portion of his portfolio since he does not have any financial advisor. As Roboadvisor firms have professionals looking at the funds daily, I’d think the results won’t be that bad as compared to our own DIY portfolios.

So here’s Mr Budget’s monthly Syfe portfolio summary.

January 2020
Total invested: S$2010.00
Current Value: S$2009.00
Portfolio Return: -0.25%
Downside Risk: 25%

Portfolio Breakdown

Not too concerned about the returns at this point as this will be a long term investment. It will take time for the portfolio to see some returns. 

According to Syfe’s forecast, based on a monthly RSP of S$1000 for 15 years at max risk, the optimistic expected return with a total capital of S$181,000 will be S$400,831, or an IRR of 10.856%. For the conservative return of S$245,971 after 15 years, the IRR will be 4.85%, still higher than the bank’s interest rate or even comparable to CPF. 

Will we be able to get the 10.85% return? Only time will tell. We will be tracking the returns monthly and will update here accordingly. 🙂

Syfe Referral Code: SRP6X8B8Y

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Our Portfolio Is Probably Lacking A Roboadvisor Component – Here’s Why

Earlier last week, after reading our post on the ideal minimum salary range and the thoughts on retirement, Syfe reached out to us to have a chat with us on our financials.

We subsequently agree and met up earlier today. 

If you didn’t know, Syfe is a roboadvisor which adopts a hybrid model – there is the automated monthly investment portion and it is complemented with a human financial advisor.

From a methodology point of view, compared to the other roboadvisors in Singapore, Syfe believes that your investment should be more about managing its risk and if that is properly defined, you are able to see what your potential returns (and subsequently your portfolio allocation) are based on your acceptable risk.

This approach is in line with Mr Budget’s view towards investment – the first step to investing is to know what is your risk profile.

For Mr Budget, I am a rather impatient guy, and has a relatively high risk profile. 

Hence when I first dabbled into investment, my first stocks that I bought were all US stocks. US stocks is probably one of the investment product with the highest risk (daily fluctuation of 1-5%). With an understanding that my investment journey will be at least 10 to 20 years old, I am more focused on building my capital now. 

US stocks also fits me the best because it can provide a decent capital gain in a short period of time (although this can go both ways). I can also accept the higher risk that comes with this.

For other products like ETFs, local REITS et cetera, you can only see the return in 5-10years for the compounding interest to kick in. 

So this forms the fundamentals of my investment strategy: 

  1. For the first 2-3 years, aim for capital gain via higher risk instruments
  2. With the capital gain, invest them into relatively safer instruments such as REITs and subsequently fixed income or bonds.
  3. Rinse and repeat, and at year 5 – 10, I should have built up a strong portfolio of REITs as well as holding on to some of my US stocks which hopefully have become multi baggers by now

For Syfe, the process is largely similar, you identify your risk profile, and then you will be allocated a recommended portfolio based on the maximum drawdown you are able to take. 

So for example, taking the self assessment test on Syfe, my risk profile will be the highest, and I am recommended the high risk portfolio with a potential drawdown of 25%.

This portfolio has a 100% equity allocation.

One of the pointers brought up by Syfe’s head of investments was that, for DIY investors (like us), how often do we beat the index?

More often than not, we can’t, because there are just too much information out there, and that we might miss out on some opportunities because we are caught up with other aspects of life. 

And that is true, if I look at the returns I generated for my portfolio over the past few years, I have not beaten the index at all. So perhaps, our portfolio has been lacking a roboadvisor component which serves as a “professional managed” portion of our overall portfolio.

For a while now, we have been looking to try out roboadvisors, and do monthly regular investments into these platforms and let professionals manage a small portion of our portfolio for us. 

Who knows, with the addition of roboadvisors in our portfolio, our overall portfolio might enjoy higher returns.

The outreach by Syfe is timely since this has been in our mind for a while now, and we will most probably be starting a regular investment into Syfe.

This post is not sponsored, and nor was there at any point did Syfe ask us to help promote the brand, but here are some personal thoughts which I like about Syfe:

  1. Relatively low fees (0.4% – 0.65%) + 0.15% ETF fees, with no withdrawal fees, no trading fees and no entry or exit charges
  2. The investment methodology is in line with my belief
  3. Investment team is definitely more experience than I am
  4. Aggressive portfolio allocation is investment in not just companies that I am similarly following (US high growth equities), but also in other industries I am not familiar in: utilities, consumers, energy etc. Would love to have some exposure to these areas which I am not familiar in.
  5. Access to financial advisors to periodically check in on any gaps that we may have in our financial planning process

To me, the last question I ask myself is, what is the risk for this other than market risk, which I am also exposed to. The biggest risk is that Syfe closes down, and that we will lose all of our capital. But that is minimised by the fact that they are regulated by MAS, and that they have several high profile backers. Hopefully that doesn’t happen.

So for Mr and Mrs Budget, we will most probably start to park a monthly amount to Syfe and use that as our emergency + retirement hybrid fund.

When we start doing that, we will be tracking the monthly investment gain from the portfolio and share it with you guys. 🙂For now, Mr Budget will have to go back to number crunching mode to see how much we can invest and what will the impact be towards our financials projection before committing an amount.

If you are looking to sign up for Syfe, here’s a referral code for you: SRP6X8B8Y

If this referral code, you can get $50 when you invest S$10,000.

Are you investing in any roboadvisors? 

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