Hi there,
Thank you for your question!
To summarize, here are a few changes we've done:
1) We've made our portfolios more globally diversified. We previously had 19 asset classes, we now have 32 different asset classes. You can have a look at the full list here: https://www.stashaway.sg/r/stashaways-etf-selec.... It's been 2 years since our original list of ETFs and it would make sense to update the list based on the performance and information over the past 2 years to ensure that we always have an optimal list of asset classes or funds on offer for our clients. For example, if we have 2 ETFs with the same features i.e tracking error, net returns (performance), liquidity etc then we will compare the amount of withholding tax we are able to claim back for both and select the higher one. In particular, VGIT qualified for withholding tax refund in 2017 but did not in 2018, hence we decided to change it to another ETF with similar qualities but has a lower expense ratio and one that will potentially qualify for the withholding tax refund. 2) We re-optimized our clients' portfolios i.e we've changed the target allocation of the asset classes in your portfolio and have changed the asset mix (either by adding or removing ETFs). We do still see strong data coming out of the US but we do see a slowdown in non-US economies. We are deploying asset allocations that maintain portfolios under a “disinflationary growth” regime for US-based assets and shifting to our “All-Weather” strategy for non-US assets. What you’ll see in your updated asset allocation is that we are allocating more growth-oriented assets toward the US and invest more in protective assets when it comes to non-US markets.
We are also allocating funds toward European equities, despite weaker economic performance in the Eurozone. This is because one of the core pillars of our investment framework is to monitor the market’s valuation relative to economic fundamentals and to make valuation adjustments whenever their differences are significant. In the case of European equities, we have identified that the market has priced in a level of sentiment that is significantly more depressed than what economic numbers are suggesting.
You may also find these articles about the recent changes, helpful:
https://www.stashaway.sg/r/stashaway-adds-new-a... https://www.stashaway.sg/r/non-us-economy-slow-...
The reason the portfolio risk level recommended may be higher is because based on your inputs (current financial situation, risk preferences, future goals, investment horizon etc.) when you are creating that particular goal, we recommend a portfolio risk level that we believe will help you achieve your goal amount. You are however free to adjust it to a higher or lower risk level, as per your preference. With that said, we recommend that you select a risk level that is in line with your risk appetite.
If you'd like, I am happy to have a look at your portfolio and discuss this in greater detail with you perhaps over a call? You can also always reach out to us via any of the following channels: [email protected], call us at +65 6248 0889 (9 am - 6 pm, Monday - Friday, excluding SG public holidays) or Whatsapp us at +65 9467 2416.
Hi there,
Thank you for your question!
To summarize, here are a few changes we've done:
1) We've made our portfolios more globally diversified. We previously had 19 asset classes, we now have 32 different asset classes. You can have a look at the full list here: https://www.stashaway.sg/r/stashaways-etf-selec.... It's been 2 years since our original list of ETFs and it would make sense to update the list based on the performance and information over the past 2 years to ensure that we always have an optimal list of asset classes or funds on offer for our clients. For example, if we have 2 ETFs with the same features i.e tracking error, net returns (performance), liquidity etc then we will compare the amount of withholding tax we are able to claim back for both and select the higher one. In particular, VGIT qualified for withholding tax refund in 2017 but did not in 2018, hence we decided to change it to another ETF with similar qualities but has a lower expense ratio and one that will potentially qualify for the withholding tax refund. 2) We re-optimized our clients' portfolios i.e we've changed the target allocation of the asset classes in your portfolio and have changed the asset mix (either by adding or removing ETFs). We do still see strong data coming out of the US but we do see a slowdown in non-US economies. We are deploying asset allocations that maintain portfolios under a “disinflationary growth” regime for US-based assets and shifting to our “All-Weather” strategy for non-US assets. What you’ll see in your updated asset allocation is that we are allocating more growth-oriented assets toward the US and invest more in protective assets when it comes to non-US markets.
We are also allocating funds toward European equities, despite weaker economic performance in the Eurozone. This is because one of the core pillars of our investment framework is to monitor the market’s valuation relative to economic fundamentals and to make valuation adjustments whenever their differences are significant. In the case of European equities, we have identified that the market has priced in a level of sentiment that is significantly more depressed than what economic numbers are suggesting.
You may also find these articles about the recent changes, helpful:
https://www.stashaway.sg/r/stashaway-adds-new-a... https://www.stashaway.sg/r/non-us-economy-slow-...
The reason the portfolio risk level recommended may be higher is because based on your inputs (current financial situation, risk preferences, future goals, investment horizon etc.) when you are creating that particular goal, we recommend a portfolio risk level that we believe will help you achieve your goal amount. You are however free to adjust it to a higher or lower risk level, as per your preference. With that said, we recommend that you select a risk level that is in line with your risk appetite.
If you'd like, I am happy to have a look at your portfolio and discuss this in greater detail with you perhaps over a call? You can also always reach out to us via any of the following channels: [email protected], call us at +65 6248 0889 (9 am - 6 pm, Monday - Friday, excluding SG public holidays) or Whatsapp us at +65 9467 2416.