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)
- 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 Aug2019 allocations. 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.
Balanced portfolio since inception is 5.5%p.a while Capital Accumulator portfolio since inception is 6.9%p.a.
Key points from Aug 2019 newsletter to DPMS investors
Despite the volatile market conditions in August, most of the best-performing funds in our portfolios were surprisingly equity funds. The Invesco China Technology ETF, which delivered a 2.8% gain over the month.
Meanwhile, our fixed income funds delivered mixed performances. The Fullerton Asian Bonds Fund was the best-performing bond fund with returns of 1.0%. Meanwhile, the Allianz Dynamic Asian High Yield Bond Fund, lost -1.5% over the month. The performance of the Neuberger Berman Emerging Market Debt Hard Currency Fund fell by -0.8% due to the fund’s exposure to Argentinian bonds.
We made no changes to the portfolios over the month. However, portfolios were rebalanced as the sell-off in August has resulted in current allocations deviating significantly from our long-term strategic target allocation. At this juncture, we are happy to retain our +5% overweight in equities.
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 1.3%p.a and NET returns for the balanced portfolio since inception is 5.5%p.a*
(* Past performance 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.
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 by mail at Josh.email@example.com or complete form below
Last updated on October 15th, 2019 at 12:29 am