Review: Is The New Syfe Select Better Than Brokerage?

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

I’ve definitely been guilty of signing up for new services just to enjoy their launch promotions (like free Apple stocks). The result? Small sums of money kept all over the place, and a hard time remembering what funds I’m already invested in, or what exposures I currently have.

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 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:

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? Well, this is where the training wheels come off and you get to create your own portfolio from scratch.

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 get ETFs from ARK (run by the legendary Cathie Wood), BlackRock, State Street and more.

There’s a wide variety of asset classes to choose from: stocks, bonds, real estate, gold, silver.

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

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

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.

Semiconductors

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.

I especially like how the top three holdings of SMH are Taiwan Semiconductor, the world’s most advanced contract chipmaker, Nvidia and Netherlands-based ASML. ASML is the world’s only supplier of top-tier EUV (extreme ultraviolet) lithography machines, which are used to manufacture the industry’s smallest 5nm and 7nm chips.

Syfe shows you the details of the ETFs you’re interested in. In this case, the details for SMH

Exponential technology

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

How I created my Syfe Select Custom portfolio

Creating my portfolio with CLOU, CIBR, SMH and XT was just a matter of adding them and deciding on the allocation I wanted. 

One thing to note is that once you confirm the portfolio, you can’t go back to edit it. The folks at Syfe tell me that they’re planning to introduce edit features soon, so that’s something to look forward to.

You can transfer funds via PayNow or Internet Banking. Once the funds are transferred, it will be invested within 1 – 2 working days. 

What’s the difference compared to a brokerage?

In my opinion, Syfe Select is a great option for investors who want to consolidate their investments in one place. For instance, I open my Syfe app and I’ll be able to see my investments in REIT+ and Core Equity100, my spare cash in Syfe Cash+, and my ETF holdings in Syfe Select.

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. And because I’m only human, I might get sucked into trying to “time” my purchases and spend time and energy worrying about that. 

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. 

If you want the flexibility of investing on your own terms, Syfe Select is a great choice. Additionally, the more you invest, the lower your fees get ultimately. Your fees drop to 0.5% and 0.4% per year if your portfolio value grows above $20,000 and $100,000 respectively.

Closing thoughts

I really like how Syfe Select allows you to add specific exposures that complement your current investments and keep track of all of them within one app. 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 referral 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!

This article is for informational purposes only and does not constitute financial advice. Please do your due diligence before making any investments.

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