There are four types of Core portfolios.
The key difference between each Core portfolio is their exposure to stocks and bonds, which in turn determines their overall risk level. In a nutshell, Core portfolios with a greater equity allocation (and lower bond allocation) will have higher potential returns, but the addition of increased risk.
Choosing between the four Core portfolios very much depends on your investment goals, time horizon, and risk appetite. Here’s a quick guide to help you understand which portfolio is right for you:
- Core Defensive
The Core Defensive portfolio is a low-risk portfolio that is invested mainly in high-quality bond ETFs. It also contains an allocation to stock and gold ETFs for added diversification.
The portfolio is designed for investors who prefer stable returns
A defensive portfolio generally focuses on lower-risk investments to generate steady returns that are better than what a traditional savings account can generate. Although the return potential may be lower compared to a growth-focused portfolio, the higher exposure to bonds helps limit short-term fluctuations. Learn more about Core Defensive portfolio here.
- Core Balanced
The Core Balanced portfolio is a medium-risk portfolio with an optimal mix of stock, bond and gold ETFs. The asset allocation focuses on better risk-adjusted returns, with the ETFs collectively invested in over 3,500 stocks of the world’s top companies.
A balanced portfolio aims to balance risk and reward by holding both equities and bonds in a more or less equal split. It is designed for investors who are willing to take on some risks to achieve moderate long-term growth, while still having an exposure to bonds and gold to cushion their portfolio during market declines. Balanced portfolios are generally less likely to experience the large fluctuations an equity-heavy portfolio could encounter. Learn more about Core Balanced portfolio here.
- Core Growth
The Core Growth portfolio is a higher risk portfolio that is invested mainly in stock ETFs. These ETFs collectively invest in over 3,500 stocks of the world’s top companies. To provide additional diversification, the portfolio also contains an allocation to bond and gold ETFs.
A growth portfolio is one that’s predominantly invested in equities, with a smaller allocation to bonds and other assets for diversification. Historically, stocks have delivered higher returns than bonds. As such, a larger allocation to equities tends to help maximise your return potential.
The Core Growth portfolio is generally more suitable for investors with a long-term investing horizon who are comfortable with short-term market volatility. Learn more about Core Growth portfolio here.
- Core Equity100
Core Equity100 is 100% allocated to global equities. The portfolio holds equity ETFs which collectively invest in over 1,500 stocks of the world’s top companies, aiming to achieve global diversification.
Syfe selects ETFs that are liquid and have low expense ratios to minimise costs and maximise returns. Additionally, Core Equity100 uses a Smart Beta strategy that takes into consideration the following factors: growth and value, volatility and country exposure.
The portfolio is designed for investors who want maximum exposure to global equities and are willing to take on higher systematic risks to potentially generate better returns relative to a traditional passive indexing strategy. For investors seeking low-risk investments, this portfolio may not be appropriate. Learn more about Core Equity100 portfolio here.
Still unsure which portfolio is the most suitable for you? Schedule a complimentary consultation with our wealth experts here.