IFAST runs this portfolio IFAST DPMS whereby you or any investor in it gives discretion to the asset manager (IFAST) to manage the portfolio on your behalf fully.
DPMS stands for Discretionary Portfolio Management Solutions.
The investment service helps you invest for the long term by
1) Choosing the opportunities in the market to invest more (If china equities are cheap, the portfolio has more of it)
2) Choosing the best performing fund (wouldn't it be make sense to choose better performing funds)
3) Keeping portfolio according to your risk profile (this is done by re-balancing)
How to find the portfolio that suits you
There are 5 portfolios that you can choose from to suit your risk profile and objective. They are
- Income (Conservative)
- Income Growth (Mod Conservative)
- Balanced
- Capital Accumulator (Mod Aggressive)
- Capital Growth (Aggressive)
15-30 funds are chosen to form the portfolio.
The funds chosen can be made up of unit trust, ETFs or index funds.
Below is Nov2020 allocations for the equity component only. If you compare it to previous month's allocations, you'd realise that new funds with better performance are also added in to replace underperforming one.
The comparison work will be done on an ongoing basis and this is done by IFAST in-house research team.
A balanced portfolio is around 50% equities to 50% bonds.
With this portfolio, you are invested globally.
Based on historical data of other balanced funds, a drop during a market crisis can be reasonably expected at 35%-40% in a worst case scenario. This is a key question when you think through your risk appetite.
With a $100,000 portfolio, a $40,000 paper loss, is it going to be uncomfortable with you?
If it is not, then a balanced portfolio or a more aggressive one can suit you.
You may read on balanced funds like FIRST STATE BRIDGE over here.
Capital accumulator and capital growth have more allocations to equity. Hence, they will have higher volatility but can potentially deliver higher long term returns.
Performance table of the 5 IFAST DPMS portfolios
Below is the performance summary table since Dec2016.
The more aggressive the portfolio, the higher the volatility as shown below.
Capital growth (in red) has the highest equity allocations gave the highest return and likely the most volatile.
A more recent summary of performance on the balanced portfolio can be seen below.
Updated to Nov2020 which has seen a very strong rally post mar2020 covid-19 triggered market crisis.
Key points from Nov2020 newsletter to DPMS investors
While digital economy stocks underperformed most cyclical sectors, the O’Shares Global Internet Giants Index delivered a respectable return of 10.8% in November, led by Pinduoduo’s 54.3% rally, as the company reported encouraging earnings figures in 3Q 2020. Farfetch Ltd, an online luxury fashion platform that is part of the O’Shares Global Internet Giants Index, also saw its share price soar 94.3% in November, after the company signed a partnership with Alibaba and posted strong 3Q results.
Europe’s Stoxx 600 Index rebounded strongly by 14.5% over the month amidst positive vaccine news, and encouraging signs that COVID-19 infection rates were slowing in several European countries, after governments imposed lockdowns and other social distancing measures. Meanwhile, Japan’s equity market also ended the month in positive territory, with the Nikkei 225 rising sharply by 13.1%.
Asia and emerging markets underperformed developed markets over the month, with the MSCI Asia ex-Japan Index and the MSCI Emerging Markets Index rising 5.9% and 7.1% respectively in November. Thailand and Singapore were amongst the best-performing equity markets in Asia, with the SET Index and the Straits Times Index rising 19.0% and 16.2% respectively.
Elsewhere in Asia, Chinese equities were lukewarm over the month. While the MSCI China Index has outperformed significantly on a year-to-date basis, the index only delivered a muted 0.7% gain in November. The rotation into cyclical stocks was also notable in China, as financial stocks, including China Construction Bank and Ping An Insurance, clocked strong gains.
However, the index was weighed down by China’s big-tech stocks, Alibaba and Tencent, as the government announced a new set of draft rules aimed at controlling the growing influence of Chinese Internet companies, a decision that came right after the government suspended Ant Group’s initial public offering. Alibaba and Tencent fell by -10.9% and 4.7% respectively over the month.
Regular portfolio reviews done for you
I've personally invested into the the Capital Accumulator (Mod Aggressive) portfolio, review has been made every month or two.
Below is a typical update look when a portfolio change is done for you.
If you are invested into it, there will be no need for any action.
What is popular?
If you are unfamiliar with investments, the "capital growth" portfolio may be too volatile to get started with. It's allocation currently is 90% equities and 10% bonds.
On the other hand, the Income and Income Growth portfolio may have too little flexibility to get into equities for potential long term returns.
A pure bond portfolio may be better than a investment service that is too conservative.
Hence, the balanced portfolio (in green above) and the capital accumulator (moderately aggressive portfolio in yellow above) are MORE POPULAR portfolios.
These two portfolios also have a wider diversification of funds.
You can check the fund breakdown in a previous section.
But again, choose the portfolio that suits you long term.
Lastly, is 5.5%p.a sufficient to attain your financial goals?
The DPMS has performed well thus far and a great way to invest on a hands-free approach.
Fees are up to 1.28%p.a and NET returns for the balanced portfolio since inception is 7.74%p.a*
(* Past performance till Nov2020 does not indicate future returns)
I advice on how to approach using the portfolio and how to make strategies with it to attain your financial goals. Investing for the long term is a key strategy and IFAST DPMS is a simple solution to get it done.
To learn more about how to invest towards retirement, watch video below!
Investing can also be done on a regular monthly basis. The minimum amount to sum to start is $500/m.
I'd show you more on how to use an investment portfolio to achieve forced savings and meet long term financial goals,
Reach me here https://www.theastuteparent.com/josh-tan/
Last updated on February 19th, 2021 at 01:33 pm