![\"\"](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2024\/11\/Syfe-REIT-Rebalance-Sep-2024-750x420.jpg\")
<\/p>\nSyfe\u00a0REIT+\u00a0portfolio has just been rebalanced in line with the September 2024 semi-annual rebalancing for the iEdge S-REIT Leaders Index.<\/p>\n
This twice-a-year rebalancing was completed on 24 September 2024.<\/p>\n
![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2024\/11\/image.png\")
<\/figure>\n<\/div>\nThe idea of using Syfe REIT+ is to rely on largely passive management, which means I don\u2019t usually check my portfolio very often.<\/p>\n
Once in a while, Syfe would send me an email to notify the latest updates on their end.<\/p>\n
Key Changes to Syfe REIT+ For Sep 2024<\/h2>\n
Real estate investment trusts (REITs)<\/a> are funds that invest in a portfolio of income-generating real estate assets such as shopping malls, offices, hotels and industrial properties with the aim of generating income for the REIT\u2019s unit holders.<\/p>\n Syfe REIT+ (review included)<\/a> is a Singapore REIT portfolio that tracks\u00a0the SGX\u2019s iEdge S-REIT Leaders Index<\/a>.<\/p>\n The iEdge S-REIT Leaders Index is a narrow, tradable, adjusted, free-float market capitalization-weighted index that measures the performance of the most liquid<\/strong> real estate investment trusts in Singapore in SGD.<\/p>\n Here are the key changes for this semi-annual update.<\/p>\n This was the exact opposite of what happened during the last Syfe REIT+ rebalancing<\/a> in March 2024, when Starhill REIT was excluded, and OUE REIT was included. Considering both their tiny weighting, this change is rather insignificant.<\/p>\n If you are wondering about the flip-flop in the constituents of the iEdge S-REIT Leaders Index, remember that a specific methodology governs the inclusion of REITs. Liquidity criteria such as\u00a0Average Daily Traded Value and Daily Traded Velocity<\/a>\u00a0must be met by REITs in order for them\u00a0<\/span>to be included in the index.<\/p>\n The constituents list has been updated to reflect the inclusion and exclusion below.<\/p>\n The methodology for the iEdge S-REIT Leaders Index takes into account average daily traded value, daily traded velocity, semi-annual free-float market capitalisation, capping, and weighting, which I elaborated on in my Syfe REIT+ review<\/a>.<\/p>\n In particular, if you look at the weighting more closely, you will notice that it resembles the table above with the adjustment factor in place, which intentionally overweights the top REITs but caps them individually at 10%.<\/p>\n That\u2019s a total of 7 REITs making up 70% of the portfolio.<\/p>\n Additionally, notice that Digital Core REIT is excluded from the portfolio (learn more below), although it is included in the CSOP iEdge S-REIT Leaders Index ETF.<\/p>\n I have written about Syfe\u2019s allocation strategy, and if you are new to Syfe REIT+, there are two main points<\/strong> to highlight.<\/p>\n First, Syfe employs an optimised allocation of only 20 (or fewer) REITs<\/strong> and not a full replication of the iEdge S-REIT Leaders Index. This intentional decision balances and prioritises:<\/p>\n Secondly, Syfe\u2019s REIT selection process includes only SGD-denominated REITs<\/strong> with a minimum free float of 20%<\/strong>.<\/p>\n Does Syfe REIT+ methodology mean better returns? Data shows that Syfe REIT+ has been outperforming its benchmark<\/strong> index.<\/p>\n The interesting thing I learnt is that the iEdge S-REIT Leaders index only has 21 constituents as of today. I guess there isn\u2019t much optimization to be done in the future, isn\u2019t there?<\/p>\n If more REITs do not meet Syfe\u2019s criteria, we will have fewer than 20 REITs included in Syfe REIT+.<\/p>\n To be honest, I don\u2019t think SGX has a user-friendly website at all.<\/p>\n Either information is tough to find, or I am pretty lousy at searching for it because I haven\u2019t seen any updates to the iEdge S-REIT Leaders Index under Index Publications<\/a> for the last few years.<\/p>\n If we visit the iEdge S-REIT Leaders Index<\/a> webpage, we also don\u2019t get to view the full list of the current constituents either.<\/p>\n My go-to solution is to refer to the\u00a0CSOP iEdge S-REIT Leaders Index ETF,\u00a0<\/a>which adopts a\u00a0full replication strategy<\/strong>\u00a0by constructing its portfolio with<\/span> the same weightings as the underlying index.<\/p>\n Therefore, we just have to take a look at the holdings of CSOP iEdge S-REIT Leaders Index ETF to know what the current constituents of the iEdge S-REIT Leaders Index are, which has only 22 at the moment.<\/p>\n Digital Core REIT is USD-denominated<\/strong> which equates to exclusion from the Syfe REIT+ portfolio.<\/p>\n According to Syfe, REIT+ (100% REITs)\u00a0is estimated to offer a dividend yield of around 5.56% p.a currently.<\/p>\n Syfe REIT+ has its ups and downs and will always be subject to interest rate fluctuations.<\/p>\n The good news is that we are at the beginning of a rate-cutting cycle<\/strong>, with interest rates expected to be in the 3.50%-3.75% range by the end of 2025.<\/p>\n When that happens, risk-free returns from options such as high-interest bank accounts, fixed deposits, Singapore Savings Bonds, and cash management solutions will become increasingly unappealing for yield hunters. In comparison, REITs will start to look more attractive.<\/p>\n However, it is important to understand that it will take at least a few quarters for the positive impact of lower rates to start being reflected<\/strong> in REITs\u2019 financial results.<\/p>\n Why is this important for REITs? The answer is obvious \u2013 lower interest rates will boost S-REITs\u2019 earnings.<\/p>\n Lower financing costs translate directly into higher earnings growth for REITs<\/strong>. Moreover, the improved debt and capital environment is likely to facilitate acquisition activities, opening additional avenues for earnings expansion.<\/p>\n There is still plenty of time next year when the price of REITs will be subjected to volatility. The euphoria and momentum of the Fed rate pivot (September 2024) have dissipated as investors realize that REITs will still be stuck with the high cost of debt in the near future. Meanwhile, we are getting paid to wait<\/strong>.<\/p>\n At the end of the day, we have to choose our poison and stick to our convictions. Time will take care of the rest.<\/p>\n If my blog post has helped you decide whether to invest with Syfe, you will be delighted to know that you can use my\u00a0exclusive referral code (TURTLEINVESTOR)<\/a>\u00a0to give your portfolio a head-start as a\u00a0new Syfe<\/strong><\/span> client. Learn more about the Syfe Referral program here<\/a>.<\/p>\n I earn rewards only when you do, so we share in the benefits together \u2014 a win-win for both of us!<\/p>\n Thanks for reading! Do drop me a comment or message if you\u2019ve found this helpful.<\/p>\n\n
Syfe REIT+ Updated List Of Constituents<\/h2>\n
![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2023\/06\/image-16.png\")
<\/figure>\n<\/div>\n![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2024\/11\/syfe-reit-sep-2024.jpg\")
<\/figure>\n<\/div>\nThe Syfe REIT+ Portfolio Optimization Strategy<\/h2>\n
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![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2023\/06\/image-17.png\")
<\/figure>\n<\/div>\n![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2024\/11\/image-1-1024x215.png\")
<\/figure>\n<\/div>\nSGX Website Is Not User-Friendly<\/h2>\n
Ending Thoughts<\/h2>\n
![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2024\/11\/image-2.png\")
<\/figure>\n<\/div>\n![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2024\/11\/image-3.png\")
<\/figure>\n<\/div>\nSyfe Referral Code \u2013 Cash Reward & Fee Waivers<\/h2>\n
![\"Syfe](\"https:\/\/www.turtleinvestor.net\/wp-content\/uploads\/2024\/11\/image-6-1024x625.png\")
<\/figure>\nLearn More About Syfe REIT+<\/h2>\n
Learn More About Other Syfe Products<\/h2>\n
![\"Kevin\"](\"https:\/\/secure.gravatar.com\/avatar\/441269e10cda0c91966b2d4ce9c87a74?s=100&r=g\")