Syfe REIT+, which debuted in 2020, is a portfolio of 20 REITs that aspires to closely replicate the performance of the iEdge S-REIT Leaders index.
S-REITs refer to Singapore real estate investment trusts. They are a valuable component of many income investors’ portfolios, namely for its stable dividend income.
Who is Syfe?
Syfe is a digital wealth manager (or robo-advisor) launched in July 2019 after raising S$5.2 million in seed funding, led by UK-based venture capital fund Unbound. They are also licensed by the Monetary Authority of Singapore (MAS) under a Capital Markets Services License.
Read more: Best robo advisors
Syfe has launched multiple robo-investment portfolios that give investors the option to choose the markets or sectors that they prefer to invest in.
REIT+ is one of the portfolios that you can select when investing with Syfe, and it is an easy way to invest.
Syfe REIT+ is a portfolio of the 20 largest REITs in Singapore. It tracks the iEdge S-REIT Leaders Index and includes well-known REITs such as Ascendas REIT, CapitaLand Integrated Commercial Trust, Mapletree Commercial Trust and more. Even if you’re not familiar with these REITs, you probably know the properties they manage, from Vivocity to Bugis Junction to Changi Business Park.
iEdge S-REIT Leaders Index. Estimated Yield: Ratio of best dividend per share forward 12M and previous day’s closing price multiplied by 100. Source: Syfe
Deep diving into REIT+, the portfolio consists of two asset classes: equity and fixed income. You have the option to invest 100% in equity, or a blend of both.
The equity component of the portfolio consists of REITs. But rather than to invest in all the REITs listed on the SGX, Syfe REIT+ chooses 15 high-quality REITs to invest in for the portfolio. The portfolio has exposure across various sectors such as industrial, retail, office, residential and others.
For the fixed income portion, Syfe uses the ABF Singapore Bond Index Fund. This allows it to shield your portfolio against volatility by managing your risk with Syfe’s ARI methodology and gain diversification into an ETF, which invests in high-quality Singapore government bonds.
Syfe REIT+ holdings following the March 2023 semi-annual rebalancing. Source: Syfe dashboard
You can also choose to have dividends paid out quarterly to your bank account or have them reinvested automatically, at no additional cost.
Who should get it
Syfe REIT+ is not an ETF. When you invest in the REIT+ portfolio, you own actual units of all the underlying REITs. This is different from a REIT ETF, where your funds are used to purchase that particular ETF – itself a product that is traded on the SGX.
We recommend this for people looking to generate a stream of passive income through dividends. Budding investors looking to start investing in REITs can also see the diversified REIT+ portfolio as a good starting point.
For seasoned investors that already have various other investments, the REIT+ could be a good supplement to your overall portfolio, especially if you are lacking in REITs exposure.
Syfe REIT+ is currently the only REITs-focused robo-advisory product that invests in REITs. Syfe REIT+ balances the potential volatility of REITs investing with risk management. It allocates a portion of the funds to Singapore government bonds according to their in-house algorithm to reduce your risk exposure.
REIT+ holds REITs across the retail, office, industrial, data centre, healthcare and hospitality sectors. This means that even if retail and office REITs hit a rough patch, you still have exposure to other sectors to cushion the blow.
The funds and the fees
One Syfe’s biggest advantage is that it doesn’t require a lot of money on your part to get started, which is great news for many beginner investors. Their most basic account tier has no minimum investment value, which means you can just jump in with a small sum.
You can fund your Syfe account in both Singapore dollars (SGD) and US dollars (USD). You can also top up your Syfe account any time and the funds will automatically be invested the next day. Funds in your Syfe account are held in a Trust Account in DBS Bank while your investments are held in a Custodian Account through Saxo Capital Markets.
Opening an account with Syfe is simple. You will first be tasked to complete your risk profile. Through this risk profiling, Syfe 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 holding or lock in periods for investing with Syfe. This means that you can withdraw your funds at any time with no withdrawal fees charged.
While you cannot control your portfolio’s performance, 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.
Syfe charges between 0.4% 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 daily 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 by Syfe.