Protected

• Is there a lock-in period for my investments?

  There is no lock-in period for Downside Protected S&P500. Simply withdraw your funds at any time with no withdrawal fees charged.
  For more information, please refer here. 

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• Is the protected portfolio exposed to currency conversion?

  As the protected portfolio is denominated in USD, the est. max loss and current upside cap levels are in USD. 

  If you have transferred funds in a currency other than USD, please note exchange rate fluctuations may affect your returns.

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• Are there any additional costs associated with the underlying constituents that help provide protection?

  No, there are no additional costs. The portfolio’s constituent ETFs invest in options to provide downside protection. The expense of this protection is offset by setting an upside cap on returns. As a result, there are no additional costs other than the management fees charged within the constituent ETFs which are already reflected in their daily net asset values (NAVs).

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• Does the protected portfolio have exposure to options?

  Yes, the downside-protected portfolio invests in constituent ETFs which have options embedded within to help give downside protection as well as an upside cap. This is achieved by buying put options which set your “est. max loss”. To reduce the expense of these puts (or protection), the ETFs also sell upside calls to set a "current upside cap" on returns. Read about our investment strategy to learn more.

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• How long are the est. max loss and current upside cap levels valid?

  Est. max loss and current upside cap levels are fixed until the next re-optimisation or until the next transaction is initiated in the portfolio (this can be due to deposits, withdrawals, or fees). With your consent, we periodically re-optimise your portfolio to reset est. max loss and current upside cap levels to lock in gains and capture even higher potential upside. More information here.

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• How are my estimated max loss and current upside cap levels determined?

  The downside-protected portfolio is constructed with ETFs which use options strategies that provide a high level of protection against downside losses (in USD) and correspondingly caps the upside potential. The est. max loss and current upside cap figures are calculated using the weighted average of the options’ downside loss and upside cap levels embedded within the constituent ETFs.These figures are calculated net of the constituent ETFs’ fees but prevailing Syfe management fees apply.

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• Can I invest in Downside Protected S&P 500 if I do not meet the Customer Account Review (CAR) criteria?

  Unfortunately, you cannot invest in a downside-protected portfolio if you have not met the CAR (Customer Account Review) criteria.
  
  Effective 1 January 2012, the MAS requires financial institutions to assess whether a retail investor has the relevant knowledge or experience to understand the risks and features of a Listed Specified Investment Product (SIP) before that product is offered to them.
  
  

  You are assessed to be eligible to transact in Listed SIPs when you fulfil any one of the three criteria based on your educational qualifications, working experience and/or investment experience. As such, it is important that you answer these questions accurately during the online application process.
  
  

  The CAR criteria will also be met if you have previously completed the SGX Online Education within the past 3 years, and scored above 75% for the assessment (edited) 
  
  

  If you do not meet the CAR criteria, you can still qualify for all securities by completing the SGX Online Education for listed SIPs.

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• Is there a lock-in period or withdrawal fees for my investments?

  There is no lock-in period for our downside-protected portfolio. You can withdraw your funds at any time with no withdrawal fees charged.

  Please refer here for more information.

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• How does the Downside Protected S&P500 portfolio compare with direct investing into the S&P 500?

  A downside-protected portfolio lets you participate in the upside potential of the S&P 500 while protecting against downside losses. To reduce the cost of downside protection (“est. max loss”), the strategy sets a "current upside cap" on returns. This means that as the S&P 500 trends higher, the portfolio returns will sacrifice some of the upside, subject to periodic re-optimisation (hyperlink). The downside protection and the cap on upside keep the protected portfolio less volatile compared to the S&P 500, and helps shield against major market downturns.

   

  When should you consider a protected portfolio?

  1. Risk-averse - if you are generally risk-averse and prefer to minimise your potential losses while still capturing some upside potential, a downside-protected portfolio is ideal. 

  2. Waiting for opportunities - for those who have been on the sidelines and are currently holding excess cash, this portfolio offers an excellent solution. Transitioning to a downside-protected portfolio lets you enter the equity markets with greater confidence. 

  3. Currently invested in US equities - if you are currently invested in the US markets but are unsure about the market’s direction, you can consider switching to a downside-protected portfolio in the meantime, instead of exiting the market completely.

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• Can the Downside Protected S&P500 portfolio go below the estimated max loss?

  The estimated max loss figure will vary depending on the time you invest in the portfolio, and will be fixed after your funds are invested. Though not guaranteed, the portfolio losses are expected to remain within the est. max loss level. While unlikely, the portfolio may sometimes sustain a loss greater than the est. max loss level during large market downturns.

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• How would periodic re-optimisation affect est. max loss and current upside cap levels?

  The est. max loss and current upside caps could be reset for 2 reasons: (1) as initiated by Syfe (subject to your consent) and (2) when existing options within the constituent ETFs expire and subsequently get rolled over to new options. These re-optimisation features make the downside-protected portfolio an evergreen alternate portfolio for you to invest in. 

   

  1. Syfe initiated 

  Syfe offers periodic re-optimisation usually on a semi-annual basis. This allows the portfolio to lock in the gains while continuing to capture further upside potential. This is achieved by replacing the existing constituent ETFs with new ETFs offering a higher return cap and loss protection closer to prevailing market conditions. Essentially, as the portfolio’s gains move closer to the current upside cap, we re-optimise the portfolio to these new ETFs which effectively helps to reduce loss potential and revise the current upside cap upwards to capture further growth. 

   

  2. Roll of options within the ETFs

  In addition, options embedded within the constituent ETFs will also roll over on an annual or bi-annual basis upon expiry. The newly rolled-over options will continue to protect against losses as the downside (put) option restrikes to the prevailing ETFs’ prices while the upside (call) option provides a new higher upside cap. This helps to keep the est. max loss unchanged (before fees) and revise the upside cap higher.

   

  Refer to our Investment Strategy to learn more.

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• How does a downside-protected portfolio work?

  The downside-protected portfolio lets you capture the upside potential of the S&P 500 while protecting against downside losses (in USD). The portfolio is constructed with a series of innovative ETFs, which make use of options strategies to provide a high level of protection against downside losses.

  As the S&P 500 goes down, the losses of the portfolio will be limited to approximately the “est. max loss” level. This keeps you shielded from major losses even as the market falls. To keep the cost of this protection low, we introduce a "current upside cap" on returns. This means that as the S&P 500 trends higher, the portfolio returns will initially be limited to the cap level. To help you get the most out of your investment, we periodically revise the cap level upwards to lock in gains and keep the upside growing.

  Imagine a Downside Protected Portfolio with an est. max loss of 5% and a current upside cap of 12%. Here are three hypothetical scenarios of how this portfolio may perform:

  • In a challenging market, say the S&P 500 drops by 20%. The portfolio would typically incur a loss of around 5%, protecting your investment from further declines.
  • In a positive market, say the S&P 500 gains 10%, which is within the upside cap of 12%. Your portfolio would potentially be up by 5%, and moving towards the upside gains in the index.
  • In a booming market, say the S&P 500 soars above 20%. Your portfolio would likely achieve the upside cap of 12% (subject to periodic re-optimisation). 

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