Is The New Syfe Select Portfolio Better Than Brokerage?

If, like me, you have some money parked with robo-advisors and some funds with brokerages like Tiger or moomoo, it may be getting hard to keep track of everything across the different platforms.

As such, I was excited to learn that Syfe is now offering a build-your-own ETF portfolio option on their platform! Apart from investing in their ready-made portfolios like REIT+ or Core Equity100, you can now create your own ETF portfolio from scratch and view them all within one app.

Very intriguing, and worth checking out.

What is Syfe Select?

Syfe Select is a new portfolio from Syfe. There are two options:

• Syfe Select Themes (ready-made thematic portfolios)
• Syfe Select Custom (build your own portfolio)

Syfe Select Themes is thematic investing, but with training wheels. The 5 thematic options are ready-made for you, so you don’t have to worry about choosing the ETFs or deciding the asset allocation. Just pick a theme you think has the most potential, transfer funds, and Syfe will invest for you automatically.

The 5 themes they’ve curated are:

• ESG and Clean Energy
• Disruptive Tech
• Healthcare Innovation
• China Growth
• Global Income

According to Syfe, these themes represent global megatrends that capitalise on long-term structural shifts.

A closer look at Syfe Select Custom

But what if you want the flexibility of choosing your own thematic investments?

Syfe has helpfully pre-selected 100+ ETFs for you, out of the thousands of ETFs out there. These have been vetted on the basis of low fees, high liquidity, track record and reputation.

You can pick broad-based funds like your S&P 500 ETFs; thematic ETFs covering trends from cybersecurity to ESG to genomics; or country funds covering regions like China, India, South Korea.

ETFs under Syfe Select's Trending category

ETFs under Syfe Select's Recommended category

Source: Syfe | Snapshot of available ETFs and their historical returns

What I’m most excited about are the thematic ETF options. Thematic ETFs are an easy way to get exposure to specific trends without the risks of trying to pick winning stocks.

Themes I’m adding to my portfolio

You can add up to 8 ETFs in your Custom portfolio. For my Syfe Select Custom portfolio, I’m going with these four thematic ETFs that I think have good long-term potential:

• VanEck Vectors Semiconductor ETF (SMH)
• iShares Exponential Technologies ETF (XT)
• Global X Cloud Computing ETF (CLOU)
• First Trust NASDAQ Cybersecurity ETF (CIBR)

Of course, these are just my personal opinions and you should always do your own research into any investment you’re considering.

Cloud & cybersecurity

First, I think that cloud and cybersecurity are two themes that will grow increasingly important as we spend more of our lives online. The more we shop, socialise, work, and bank online, the more we need cloud storage to keep all our data, and cybersecurity to keep our digital footprint safe.

Another positive for cybersecurity? The increasing number of crypto hacks we're seeing. This may not be good news for crypto bros, but it certainly has potential for CIBR. Breaches of wallets and exchanges are the most common attacks, and Bitcoin not surprisingly is the most targeted cryptocurrency. This highlights the need for more cybersecurity spending especially as more investors embrace crypto.

Semiconductor

The world is now facing a shortage of semiconductor chips. These chips power everything from our phones to our cars. With the Internet of Things (IoT) poised to transform almost a variety of products into smart devices, the demand for chips is only going to grow.

Exponential tech

Lastly, I’m interested in XT ETF for high growth potential. Its objective is to invest in innovative, disruptive companies across themes including data analytics, medicine and neuroscience, robotics, fintech, and nanotechnology.

Frankly, it’s quite unlike any other tech fund. The top holdings are not what you might expect from a conventional growth fund which may hold many mega-cap tech stocks.

Additionally, with weightings of less than 1.5% each, the top holdings do not dominate the portfolio. This speaks to its diversification, which I think is important when it comes to disruptive companies.

Top holdings, XT

What’s the difference compared to a brokerage?

In my opinion, Syfe Select is a great option for investors who want to consolidate their robo and thematic ETF investments in one place.

Another useful feature is seeing the breakdown of your ETF portfolio before you invest. After creating my portfolio, I’m able to see the top holdings, sector, geographical exposure, historical return, and overall risk level of the portfolio as a whole.

Top holdings of the Custom portfolio I created

Historical returns of the portfolio I created

This is very useful. You won’t get this portfolio drilldown if you buy ETFs from a broker.

Then, there’s the convenience factor. Syfe does the trading automatically for me. Dividends are automatically reinvested. If I want to DCA monthly, I can simply set up a recurring transfer to my Syfe Select Custom portfolio and the ETFs will automatically be bought for me every month in the allocation I’ve set.

If I DCA through a brokerage, there’s the hassle of buying 4 ETFs every month.

Are Syfe Select fees competitive with brokerage?

Compared to buying 4 ETFs every month, dollar-cost averaging with Syfe is more cost effective. There is no minimum investment and for investment amounts less than $20,000, Syfe charges 0.65% per year. This includes all trading costs so you can DCA monthly or even weekly if you prefer.

Tiger Brokers charges you USD 1.99 (SGD 2.70) for both commission and platform fees per trade. Buying 4 ETFs a month means paying S$10.80 in monthly commissions.

Here’s how much I'll have to pay over a year if I want to invest $500 in 4 ETFs monthly.

Of course, one way around this is to not DCA with a brokerage. This way you won’t need to pay frequent commissions. But not everyone may be able to invest a lump sum straightaway, or have the risk appetite to do so.

Closing thoughts

If you want the flexibility of investing on your own terms, Syfe Select is a great choice. In fact, I see Syfe moving to become a super app for investing of sorts. It will be interesting to see how much further they take this customisation theme.

Interested to start building your own portfolio? Enjoy ZERO fees for 6 months when you use our promo code FRUGALFOX. 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 for a Syfe account!