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My thoughts on Roboadvisors (Final Part – Syfe)

Syfe

Management

Syfe also boasts a very respectable team. Their CEO was a director at UBS Hong Kong and led UBS’s ETF efforts in the region.

More importantly, Syfe offers various products for investors, each targeted at different investors with different intentions. Their flagship product, Global ARI uses risk management to mitigate volatility in your portfolio. Then, they also have a REIT+ portfolio which invests in an index by the SGX, known as iEdge S-REIT 20 index, which seeks to invest in the top 20 REITs listed in the SGX.

Most recently, they have also launched a portfolio known as Equity100, which is designed for investors who want maximum exposure to global equities. It is a very aggressive portfolio that invests in purely equity ETFs so as to achieve maximum capital growth for the investor.

Through these products, we can see that Syfe’s approach is more broad-based and tries to cover the various needs of various investors. Of course there are benefits to this as certain investors can choose what they want. However, the issue is that most investors who use roboadvisors are beginners. More often than not, they would not know what is suitable for them and what they would want.

Products

Global ARI Portfolio

For the Global ARI portfolio, you can adjust your risk level just like any other portfolio provided by Stashaway and Endowus. However, from what I observe, the Global ARI portfolio tends to err on the side of caution. Even when the maximum risk setting is active, the bulk of the portfolio consists of US Treasury Bond, a low return instrument used by investors as a hedge against “volatility”. I believe that this is the case currently due to the volatility in the market due to the current coronavirus pandemic. This can be why Syfe introduced the Equity100 portfolio, which is to satisfy investors who wanted more exposure to equities even during periods of volatility.

Equity100 Portfolio

For the Equity100 portfolio, it consists of ETFs and is overweight on QQQ. QQQ is an ETF which tracks the 100 largest companies on the NASDAQ index. This index has performed very well over the past decade due to its heavy exposure in the technology sector. However, this portfolio seems to be overweight towards the US markets, which can exemplify the lack of diversification. This portfolio seems slightly gimmicky to me because I personally believe that a DIY investor can do much better. He can just invest in a VT ETF as well as the QQQ ETF in a percentage of 70% to 30% respectively. This can almost replicate what is on the Equity100 portfolio.

REIT+ Portfolio

For the REIT+ portfolio, it tracks the iEdge S-REIT 20 Index. It provides a relatively high dividend yield of around 5%, which is pretty decent considering that capital growth of the portfolio has been performing well.

They also offer their REIT+ portfolio with Risk Management, where the part of the portfolio is invested into a bond fund, this acts as a hedge against volatility while providing some fixed income for the investor.

No matter which version of the REIT+ portfolio you choose, I think they are good ways to get exposed to the Singapore market. This is because I strongly believe that the Singapore market is very conducive for dividend investing, and the REIT+ portfolio leverages on that.

Fees

Syfe offers a 3-tier payment structure.

FeesAmount invested
0.65% (Blue)$0 to $19,999
0.5% (Black)$20,000 to $99,999
0.4% (Gold)>$100,000

From the above table, we can see that Syfe’s fees are actually the lowest (given how reasonable it is to hit the target). If you can hit an investment amount of $20,000, you can enjoy a fee of 0.5%. This is very attainable.

However, considering these fees, I do not suggest investing in the Equity100 portfolio, because a DIY approach I suggested above will probably be cheaper for the typical investor, and perform similarly as well. Therefore, I believe that the main attraction of Syfe’s offerings would be the REIT+ portfolio. It allows investors are able to attain consistent dividend incomes from being REIT investors.

User Interface

Syfe provides a mobile application platform for investors. This can help in the quality of life for investors and increase their convenience. Thus ensuring that there is no excuses for not investing.

While their website is easy to use, I find that there are certain parts of the website which look different from others. This can make a website “seem” more untrustworthy for first-time users. At this point, I am just nitpicking. All 3 fintech firms have executed the “technology” part of their idea very well. As for the “finance” part, it would depend on the portfolio that the investor chooses.

Thoughts

Unlike the other 2 roboadvisors I mentioned, Syfe does not offer a cash management solution. But I do not see that as a con for the platform.

I believe that the two main products for Syfe are its Global ARI portfolio as well as its REIT+ portfolio. The Global ARI portfolio however seems to be very safe in general especially in the current times of economic volatility. Thus I do not think it may be very beneficial for investors who can stomach the risk. This may result in investors thinking that the Equity100 portfolio is for them. However, I view the Equity100 portfolio as a marketing trap. I believe that a typical investor can do the same but with lower fees.

This leaves us with the REIT+ portfolio. At one point of time, I thought that the REIT+ portfolio would be a good choice for me. That is because it invests in a diversified asset of REITs listed in the SGX while producing a relatively consistent source of passive income for investors. Although I decided to pick my own REITs in the end, I still believe that it is a good product to look at.

Final Thoughts

After this 3 part series of the 3 roboadvisors, I strongly believe that each roboadvisor has its pros and cons.

For investors who want a fuss-free experience and want their portfolio to be managed by someone else, Stashaway seems like a good choice for that. I am recommending this mainly due to its very clean user interface.

For investors who want to invest their CPF money, the only choice would be Endowus. That would be a great choice as well. If you can stomach the volatility that index funds possess, it is worth the additional returns in the long run. After all, your CPF is a long term investment. (I am talking like 3 to 5 decades of time.)

For investors who want to be exposed to Singapore REITs, Syfe’s REIT+ portfolio remains a good choice for most investors. Whether it is the version with risk management or not, they both provide solid sources of passive income for the investor.

As for me personally, I will probably not touch roboadvisors for now. Currently, I approach investing very passively. This means that ETFs form the bulk of my portfolio. If you buy the ETFs from a low cost broker, such as VOO or VT from FSMOne, it is very easy to beat the price that the brokers offer.

For now, I can only see myself investing in Endowus. However, I would only do that with my CPF money. Even so, I will ensure that I have sufficient CPF money to pay off my housing first before doing any kind of investing with it.

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