The global rise of robo-advisors is transforming the investment landscape, not just in Singapore but also in major markets like the USA and Canada. These digital platforms utilise algorithms and AI to offer personalised, cost-effective investment advice, appealing to a wide range of investors. This trend reflects a shift towards accessible, tech-driven financial services, leading to increased competition and innovation in the sector, ultimately benefiting consumers with more options and lower costs.
Here in Singapore, investors have more than 10 different robo-advisors to choose from. Two prominent robo-advisory platforms known by many are AutoWealth and StashAway, which were amongst the first in the field. Other FinTech companies competing in the robo-advisory field include Endowus and FSM MAPS. You can read more about these companies by following the respective links.
Syfe was established in July 2019 and has quickly gained popularity among numerous retail investors in Singapore. This surge in popularity is evident from their widespread advertising efforts, which can be seen both online and in physical locations, as well as from the coverage they’ve received on various financial blogs. Before considering an investment with Syfe, here are seven key points you should be aware of.
Read Also: Robo Advisors in Singapore: What You Need To Know Before Investing
#1 Syfe – An Introduction
Syfe is a digital wealth manager launched in Singapore in July 2019 after raising $5.2 million in seed funding, led by UK-based venture capital fund Unbound. In September 2020, the company raised another US$18.6 million for its Series A round and another US$ 30 million in July 2021. In August 2024, they raised US$ 27 million taking their total funding to about US$79 million to date. They also received the capital markets services (CMS) license from the Monetary Authority of Singapore.
The company was founded by Dhruv Arora, who was previously a Portfolio Trader at UBS Hong Kong and went on to become a Director and lead UBS’s ETF efforts in the region. The company has built a platform that appeal to passive investors, enabling their customers to grow their savings through an automated platform that is both easy to use and affordable.
#2 A Risk-Managed Passive Investing Approach
The cornerstone of Syfe’s methodology is to manage risks first over returns.
The company focuses on risk management to provide investors with customised investment portfolios based on their individual risk profiles, rather than focusing on returns. This means that the platform optimises returns while maintaining your selected level of risk. The aim here is to maximise your risk-adjusted returns across all market conditions.
The platform gives its users a range of different portfolios that they can invest in based on their risk appetite. Users can also customise their portfolios accordingly based on their preferences. They can also make adjustments at any point in time if they wish. This can be done easily on the platform, which will result in the portfolio possibly being rebalanced.
#3 An Investment Portfolio Built With Exchange-Traded Funds (ETFs)
When investing with Syfe, your portfolio is built using Exchange-Traded Funds (ETFs) that are globally diversified across asset classes, sectors and geographies. ETFs have become a popular investment vehicle over the past few years. ETFs give you diversification into many different companies with a relatively small investment amount.
For example, if you invest in the Syfe Core Growth Portfolio, the current allocation you will get is about 70% in equities, 25% in bonds, and 5% in commodities across multiple geographic regions including the US and China. According to Syfe, this portfolio would provide an average return of about 8% p.a. over the past eight years.
Read Also: Step-By-Step Guide To ETF Investing In Singapore
#4 Syfe Offers Multiple Investment Portfolios That You Choose To Invest In
Syfe has also launched multiple robo-investment portfolios that give investors the option to choose the markets or sectors that they prefer to invest in.
Syfe REIT +: One such popular portfolio would be the Syfe REIT +, which is currently the only REITs-focused robo-advisory product that invests in REITs. Syfe REIT+ balances the potential volatility of REIT investing with risk management. It allocates a portion of the funds to Singapore government bonds according to its in-house algorithm to reduce your risk exposure. This would reduce the likelihood and severity of your REIT portfolio crashing during times of market volatility, such as in March 2020.
Syfe also offers a REIT portfolio that allows you to allocate 100% of your investments into REITs.
Whether you choose to invest in 100% REITs or REITs with Risk Management, either portfolio is a great way to enjoy instant diversification into the leading retail, commercial and office REITs in Singapore and to enjoy passive income from these REITs.
Syfe Equity 100: The Syfe Equity 100 is a fully-managed portfolio that puts 100% of your investment monies into global equities (i.e. stocks). You get access to a well-diversified global portfolio of over 1,500 stocks in the world’s leading companies via the Exchange Traded Funds (ETFs) that it invests in. These include the Invesco QQQ Trust, which tracks the NASDAQ 100 index, and the iShares Core S&P 500 UCITS ETF, which tracks the S&P 500. Equity100 puts all your money into equities only. So, while it’s a very well-diversified equity portfolio, ultimately, everything is in stocks only.
Syfe Core: To address the needs of investors who want equities exposure while reducing the downside risks, there is Syfe Core, a suite of 3 portfolios – Core Defensive, Core Balanced and Core Growth – which maximises risk-adjusted returns. Syfe Core does this by using equity ETFs, bond ETFs and gold ETF to create their portfolios. The equity component of the portfolio helps investors generate the high returns they want using the Smart Beta methodology, while the bond and gold components provide the portfolio with downside protection.
Read Also: Syfe Core and Syfe Equity100: What Are the Differences Between These Two Robo-Advisory Portfolios?
Syfe Cash +: Syfe Cash+ enables us to earn a higher interest rate either by taking on slightly higher investment risk and offers us a similar level of liquidity as bank accounts, allowing us to withdraw our funds with no lock-up. This makes it a fuss-free alternative to high-yield savings accounts.
There are three portfolios that you can choose from within Syfe’s Cash+. There are the Cash+ Flexi (SGD), Cash+ Flexi (USD) and Cash+ Guaranteed. You can see the different features between these cash management solutions below.
Read Also: Syfe Cash+: How Is It Different From Other Cash Management Accounts?
Syfe Select Themes: For those who prefer investing in specific themes because they believe that certain investment themes will perform well over the next decade, but are unsure of how to get started with investing in them, you can consider investing via Syfe’s specially created Syfe Select Themes portfolios. Currently, there are 4 thematic portfolios that we can choose from. 1) ESG & Clean Energy, 2) Disruptive Technology, 3) Healthcare Innovation and 4) China Growth.
Syfe Select Custom: For those who are already familiar with the various investment themes and would like to customise their own portfolio, they can invest via the Syfe Select Custom option. Through Syfe Select Custom, investors can build their own portfolios from a curated list of over 100 best-in-class ETFs. Clients can choose to construct their own portfolio based on a selection of up to 8 ETFs.Alternatively, Syfe Select Custom also allows you to make adjustments from your Syfe Select Themes portfolio if you generally like the portfolio that has already been constructed for you but prefer to make some adjustments. For example, many investors may already be investing on their own and Syfe Select Custom allows them to account for these investments.
Syfe Income+: For investors who want to get easy access to high-quality, globally diversified bonds that can provide regular income, Syfe has created Syfe Income+. Constructed by Syfe in collaboration with PIMCO, a global leader in active fixed income, Syfe Income+ allows investors to invest in PIMCO’s best-in-class fixed-income strategies. There are two options for Income+. There are 1) Income + Preserve and 2) Income + Enhance. Income + Preserve is built for investors looking to generate a steady regular income while seeking to preserve capital and is considered a low-risk investment by Syfe. Income + Enhance is built for investors seeking to generate higher current income and long-term capital appreciation. It’s considered a moderately low-risk investment by Syfe.
#5 Syfe Trade Account – Allowing Investors To Invest Directly In Shares (Or Fractional Shares)
One of the most unique value propositions offered by Syfe compared to other robo-advisors in Singapore is that clients can also invest directly in stocks and ETFs on their own as well. Syfe Trade is a low-cost, MAS-regulated, brokerage service enabling Singapore investors to buy and sell U.S. stocks and ETFs. This makes sense for investors who may not only want a robo-advisory managed portfolio, but would also want to make some tactical, self-direct trades.
This means through Syfe, we can view our entire investment portfolio including individual stocks and ETFs that we invest in and also our robo-advisory portfolios and cash savings within a cash management account.
Apart from being the only fintech solution to marry both robo-advisory and self-directed investing, Syfe Trade is the only other brokerage in Singapore to offer fractional trading. What this means is that we can buy and sell a fraction of a single share. For example, if we have US$200 to invest, we could choose to allocate US$100 each to Tesla (US$320.72) and Alphabet (US$173.890) to buy about 0.31 Tesla shares and 0.57 Alphabet shares. This allows us to more easily implement a Dollar-Cost Averaging strategy in the companies that we want to invest in based on the monthly budget that we set aside.
Lastly, Syfe Trade also gives us commission-free trades each month. New clients will enjoy unlimited free trades each for the first three months. Subsequently, clients will enjoy 2 free trades each month.
Read Also: Guide To Opening a Syfe Trade Account – And Buying Fractional Shares
#6 What Are The Fees Involved?
You cannot control your portfolio’s performance, but you can control the fees you pay.
No matter what type of investment you make, all investments come with some form of cost or fee, such as transaction costs, management fees and administrative charges. However, what’s important is to keep these costs low as they inevitably eat into your investment returns.
Investors these days have a wealth of resources available online, allowing them to read up on the types of investments available as well as the fees incurred. With numerous fintech companies being able to provide their investors with low fees, to effectively compete in the robo-advisory space, offering competitively low fees is important.
Syfe charges between 0.25% to 0.65% per year, depending on your invested amount across all portfolios. This all-inclusive management fee gives you unlimited, free withdrawals and unlimited rebalancing. It is calculated on a daily basis and billed at the end of each month. Should you withdraw your balance before the end of the month, you pay only for the days your money was managed.
Syfe does not charge transaction or brokerage fees. However, there are other fees and charges apart from Syfe’s 0.4% to 0.65% per year fees to take note of. This includes:
- Securities and Exchange Commission (SEC) fees of 0.0013% when selling (charged by SEC)
- ETF Management Fees reflected in the prices of your ETFs average to about 0.15% (charged by the ETF manager)
- Currency conversion charge at 0.10% on the amount converted (charged by Broker, SAXO)
Read Also: What Fee Stacking Means For Your Robo-Advisor Investment Cost In The Long Run
#7 Funding Your Syfe Account
You can fund your account in both Singapore Dollar (SGD) and U.S. Dollar (USD). You can also top up your account anytime and the funds will automatically be invested the next day. Funds in your Syfe account are held in a Trust Account in HSBC Bank while your investments are held in a Custodian Account through Saxo Capital Markets.
To open an account, you will first be tasked to complete your risk profile. Through this risk profiling, you will also get a better understanding of your investment objective, financial situation, investment expertise, how much you need to achieve your goal and most importantly, your downside risk.
There is no minimum amount for investors to start investing with Syfe. There is also no minimum holding or lock-in periods. This means that you can withdraw your funds at any time with no withdrawal fees charged. You can invest in Syfe’s portfolio using your cash or SRS savings. Do note that SRS funds can be used currently only to invest in in Syfe Portfolios (Cash+ Flexi SGD, Income+ Preserved, Income+ Enhance, Core Equity100).
Read Also: 5 Key Factors To Consider When Investing Our SRS Savings
Just like investing with any other robo-advisor, look out for promotions that the robo-advisor is running.
If you are interested in getting started on investing with Syfe, DollarsAndSense has an exclusive partnership with Syfe – enjoy a 0% management fee for the first $30,000 during the first 6 months after you sign up. Apply here to enjoy the promotion.
This article was first published on 6 September 2019 and has been updated to include the additional portfolios that have been launched.
The post Investing With Syfe: 7 Things You Need To Know About This Singapore’s Robo-Advisor appeared first on DollarsAndSense.sg.
