Syfe VS Stashaway: Which Robo Is Better?

Stashaway and Syfe are 2 of the most popular Robo-advisory platforms that beginner and advanced investors in Singapore can invest in. With a clean user interface, easy to understand investment method and a structured fee structure, it is extremely difficult to compare the 2 head-to-head.

If your starting capital is small, these 2 Robo Advisors have no minimum investment requirements, so you can start with whatever spare cash you have right now.

Many readers and friends wanted me to do this article for quite some time due to popular demand regarding my previous article on Syfe. To begin, Stashaway is a larger, older Robo Advisor in the market since 2017 while Syfe is a newcomer. Despite being a newcomer, Syfe has been rolling out popular portfolios such as the REIT+ and the Equity100 for investors who want an SG-based Income Portfolio which is currently a first in the market as well as a 100% equities portfolio for investors seeking aggressive growth looking for the highest risk-adjusted return in the long run.

With a myriad of portfolios offered by Stashaway, investors are spoilt for choices with the multiple risk indexes offered. Stashaways’ portfolios pretty much adopts a risk-management strategy to investing through the application of “Modern Portfolio Theory” and creating portfolios which can weather a market downturn by investing into different asset classes such as equities, bonds and commodities. This is similar to Syfe’s Global ARI portfolio which also focuses on downside risk management and returns from both Robos should reap similar returns because they have very similar holdings. (based on respective risk indexes) Do note that both Stashaway and Syfe invest into mostly US-based ETFs for their Global Portfolio.

TL;DR

Syfe Promo Code

For people who are interested to invest into Syfe and wants to open an account, you can use the promo code below as a bonus 🙂

Promo Code: SRPTH8LK3

$10 bonus for the first deposit of $500 (or more)!

$50 bonus for the first deposit of $10,000 (or more)!

$100 bonus for the first deposit to $20,000 (or more)!

Note: Bonus is applicable on the first deposit made only. The bonus will be automatically credited to your portfolio and invested along with your existing investments

We will be comparing the Robos based on two factors:

  1. Fees
  2. Performance

1. Fees

When it comes to investing, the amount of fees you pay as a percentage of your investment is really substantial in the long run. 2% of 100k is $2000 and 0.5% of 100k is $500. Are fees significant? Yes. They play a huge role when it comes to overall returns of a portfolio in the long run. Since the fees are recurring, as your capital compounds, so does fees. Therefore, the lower the fees, the better!

So what are the fees structure when it comes to Stashaway and Syfe? Both do not have any minimum capital to start, (meaning you can start with even $100!) but they differ slightly when it comes to their fee structure.

Stashaway

When it comes to Stashaway fees, an investor with less than 25k to invest will find that fees are rather high at 0.8% (not counting in ETF expense ratio.) If you were to count in ETF expense ratio (Average 0.28%), that will bring overall fees to 1.08% of your entire investment.

Unless you are an investor with $100,000 or more to invest into Robo, Stashaway’s overall fees are pretty steep and not really beginner friendly for someone starting out with maybe a $2000 capital. Stashaway is really targeting a different segment of investors with more capital and for people who want flexibility in choosing their risk profiles to capture gains from Higher Risk Portfolios while hedging risk using the Lower Risk Portfolios.

Syfe

When it comes to Syfe, it is obvious that they are more beginner friendly with a straightforward pricing structure:Anything from $1 to $19,999 will be 0.65% (excluding ETF expense ratio) and above 20k will be 0.5% and 0.4% for 100k and above investments. Compare this directly to Stashaway, if you were to hit 0.5% fees from Stashaway (excluding ETF expense ratio), you will need to invest $100k and above to match Syfe.

What this means is that, if you only have a capital of 20k or less to deploy, Syfe is the clear winner when it comes to fees because you are paying lesser fees on a recurring basis which will become really significant in the long run. Fees are the number one reason why most funds underperform.

Two similar funds can have extremely similar holdings (hence returns) but if one fund has a higher management fee, the clear winner is the one with lower fees since annualised returns takes into account the fees that you pay for trade commissions/ management fees.

In conclusion: If you are an investor in their early 20s with less than 100k capital, you are paying lesser fees yearly if you opt for Syfe since you will be incurring 0.65% fees (excluding ETF expense ratio) compared to Stashaway’s 0.8% fees (excluding ETF expense ratio) if you have a small capital.

If you are an investor in their 30s or 40s and beyond and looking for somewhere to invest spare monies of 100k or more, Stashaway may make sense to you since fees will be 0.5% or lower depending on how much capital you have. You can also choose Syfe since their fees drop to 0.4% (excluding ETF expense ratio) when you invest more than 100k and have a dedicated financial advisor who will guide you along the way.

Winner: Syfe (Lower fees = Higher Returns)

2. Performance

One of the key reasons why we choose an investment is due to its performance: Is the investment able to generate you the highest risk adjusted returns based on your own risk profile and time horizon? If yes, you found your right fit and can start to decide on what to invest. We shall now dive into the performance of the 2 Robo Advisors and see which one makes more sense based on your own individual risk profile and time horizon.

Stashaway

The above illustration is adapted from Wei En’s Stashaway Analyser on Seedly where he analysed every single of Stashaway’s global general investing portfolio. As you can see, Stashaway’s portfolios have been outperforming the S&P 500 across the board with the highest return so far being Stashaway Risk Index 36% @11.75% YTD return.

The above also shows the graphical performance of all of Stashaway’s portfolios Year-To-Date (YTD). As you can see, the lower risk portfolios declined lesser compared to higher risk portfolios during the March selloff due to higher allocation of Bonds and Gold. The higher risk portfolios(more equities) eventually recovered though and outperformed the lower risk portfolio so far which can be seen on the graph above.

As a general rule of thumb, the more equities (stocks) you hold in your portfolio, the more volatile (price fluctuations) your portfolio return is going to be. But do note volatility does not equate to risk. A common misconception beginner investors make is to think that a volatile instrument is a risky investment, risk can be defined by many different things but the biggest risk to investing is not knowing what you are doing. Even putting your money in the bank has risk, such as credit risk and inflation risk. So everything in life comes with risks. It’s sad that the only thing certain in life are taxes and death…

Stashaway’s portfolios generally follows a “Modern Portfolio Theory” approach by diversifying into multiple asset classes such as Stocks/Bonds/Commodities and in general these types of portfolio tend to do decently well in any condition. The only caveat here is that returns will neither be the best nor the worst. You will just enjoy a decent risk-adjusted return with downside risk protection from bonds and gold but when markets go up bonds and gold will be weighing down on your potential gains.

In conclusion, Stashaway’s myriad of portfolios offer a decent risk-adjusted return with downside protection and is significantly outperforming the S&P 500 which has a YTD return of 5.42% as of 31 July 2020. The potential cons going forward will depend on how much bonds and gold you have but at the same time the amount of downside you will face potentially also depends on how much equities you have.

Stashaway’s portfolio is designed for busy professionals wanting a lower cost collective investment scheme as compared to higher fees Unit Trusts. The portfolios itself consist of ETFs only though, so returns generally depend on overall market conditions. This Robo is recommended for investors with Low/Balanced/Medium-High Risk Profile with a bigger capital, since the targeted group will be investing into the different portfolios with a short, medium and medium-long term time horizon.

Syfe

When it comes to Syfe, Syfe offers 3 different portfolios targeting different types of investors with different risk profile and time horizon. For one, Syfe’s Global ARI is extremely similar to Stashaway’s portfolio with a focus on downside risk management and tilt towards international ETFs. It can be seen in the above backtest done by Syfe which shows that they have the ability to outperform the index they are tracking.

Syfe offers the industry’s first and only SG REIT based portfolio REIT+ which was extremely popular among Singaporean investors when it first released. It gave an opportunity to Singaporean retail investors to own the top 20 REITs in Singapore without incurring hefty trading fees and upfront capital if they were to do it themselves. In fact, this is the only portfolio which does not invest into ETFs but buy into the actual underlying REIT which you will be able to own directly albeit being a custodian. However, it is still a good way to diversify into the S-REIT market and a good starting Income Portfolio. It generated a return of 27.1% with a dividend yield of 5.1% in 2019. However do note that past return is not a guarantee of future performance so it is still up to you if you choose to invest in this portfolio.

As for Syfe’s newest portfolio Equity100, it changed the entire ball game when it comes to Robo advisory investing: They have opt for a 100% equities (stocks) portfolio targeting investors seeking the most aggressive growth with a long time horizon. This portfolio will outperform any other portfolio offered by Stashaway if you as an investor hold it long enough because equities trend upwards in the long run and absolutely destroy any other asset class over a long time period.

From my StocksCafe portfolio

Based on my own computation of my Equity100 portfolio, it is significantly outperforming the S&P 500 ETF, VT (World) ETF, and absolutely crushing our local STI ETF. (+18.39% VS -19.47%) Year-To-Date. While this computation is backtested since Equity100 was only released in June 2020, this just shows the potential that a fully equity portfolio can offer and I will definitely continue to invest into this portfolio in the long run.

In conclusion: Syfe offers 3 strategic portfolios which caters to different investors or for an investor to craft a powerful Core-Satellite Portfolio to capture higher gains using Equity100 and hedging against downside risk using the Global ARI portfolio as a Core holding. The REIT+ can also compliment the growth segments by providing passive income in the form of dividends.

Based on individual risk profile and time horizon, you can then determine which portfolio to choose. As a general rule of thumb, the younger you are the more risk you should be willing to take due to the long time horizon you have ahead. Hence, Equity100 will become part of my long-term portfolio since it will give me the highest risk-adjusted returns in the long run compared to diversified portfolios holding bonds and gold which may weigh down my potential gains in the long run.

Winner: Depends (Syfe if you are able to stay long term with them/Stashaway if you are a busy professional wanting downside risk and decent risk-adjusted returns with a medium term time horizon.)

Overall Thoughts

So at the end of the day, which Robo advisor you choose really depends on how much capital you have and what kind of investor you are. If you are currently schooling and only have a couple hundred bucks, or less than $25,000 to invest, Syfe makes the most sense given its lower fees (0.65%) compared to Stashaway (0.8%).

Other than fees, an investor can opt for Syfe if you are looking for a 100% equities portfolio through the Equity100 or a 100% S-REITs portfolio through the REIT+. Both of these are unique and the industry’s first, so if you are a young investor that wants to go full equities like me or simply wants to invest in Singapore’s top 20 REITs, Syfe will make the most sense to you.

Likewise, if you are busy professional with little time to care about your finances and investments, wants to have the flexibility in choosing different risk profile while protecting your downside risk, you can opt for Stashaway’s portfolio and customise it whichever way you like and call it a day. Or you can also use a Core-Satellite strategy using Syfe’s Global ARI as a core holding, and then Equity100 and REIT+ as a satellite holding.

This will make sure you have your downsides covered while at the same time enjoying some of the gains from the satellites holding that the Core is not able to attain.

At the end of the day, investing should not be binary and you can opt for both Robos if you want to. You can even use Stashaway’s portfolio as a core holding while Syfe as a satellite holding, it is totally up to you!

All of these comes back to the same questions:

  1. How much capital do you have?
  2. How long is your time horizon?
  3. How much risk are you willing to take?
  4. Are you in a profession whereby there’s simply no time to care about investments?

Once you are able to answer these questions, the right Robo will naturally make sense to you. But the most important thing is to start now and stop procrastinating!

Stashaway Beanstock Rating:

Rating: 4 out of 5.

Syfe Beanstock Rating:

Rating: 4.5 out of 5.

Both Robos have an extremely clean UI and easy to understand platform with great customer support. Both are able to bring back decent returns for their investors and even outperforming the S&P 500 so far. The reason Syfe got a higher Beanstock rating is because it ticks more of my personal checklist of investing but that is because my needs and your needs may be different.

Choose the Robo which can offer you the highest risk-adjusted returns based on your own risk profile, time horizon and capital available. With the capital you have, choose the one that will incur the least fees because fees will really eat into your returns and will be compounded just like your capital. Hence, the Robo you choose should be in line with all the above criteria and you should always stay invested, so remember to pump in spare cash every now and then.

Thank you for reading! I hope you have more clarity on the similarities and differences between Stashaway and Syfe. Both are excellent Robos which allow investors to diversify into Global ETFs without incurring hefty trading fees and require no minimum investment capital to start. So which one did you choose? Leave your comment down below! Stay safe and stay invested!

Oh yes, Syfe Promo Code for those who wanted to scroll back and find it, here it is for your convenience 🙂

Promo Code: SRPTH8LK3

$10 bonus for the first deposit of $500 (or more)!

$50 bonus for the first deposit of $10,000 (or more)!

$100 bonus for the first deposit to $20,000 (or more)!

Disclaimer:

The content here is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security. In fact, the content is not directed to any investor or potential investor and may not be used to evaluate or make any investment.

Do note that this is not financial advice. If you are in doubt as to the action you should take, please consult your stock broker or financial advisor.

Author: Investing Beanstock

Writer @Investing Beanstock www.yhlens.com

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