Waking up bleary-eyed for school, some parents may put on cartoons while their kids nibble at breakfast. Not for Dhruv Arora, however. Growing up, he was not afforded such a luxury, because his father would be hogging the television.

As Arora recounts: “My dad was a pretty active day trader. He had a full-time business, but he really enjoyed the markets and would watch CNBC overnight — what’s happening in the US markets, the impact on the next day and things like that.”

Thus, Arora began his financial education from a young age by watching his father navigate the global markets from their home in India.

By the time he was eight, Arora claims to have understood the ins and outs of the stock market. “My dad took an interest in teaching me a lot about it, so that was definitely the starting point of my whole journey.”

With his financial know-how, Arora outpaced his peers. He joined UBS as an investment banker in Hong Kong after graduating from the Indian Institute of Technology Bombay in 2008.

He stayed there for seven years, servicing ultra-high net worth clients — “the 0.01%”, he says — with investment tools he felt the world needed access to.

In a recent interview with The Edge Singapore, Arora says: “We were doing all these cool things but what really struck me was, ‘Can we have a slightly broader reach?’”

“Most people across Asia were making much more money than before, as economies were doing well. But banks’ rates of interest were negative. Most people’s assets were in those same bank accounts,” he adds.

The idea for <a href="https://www.theedgesingapore.com/tags/syfe">Syfe</a> began brewing in Arora’s mind around 2015, a thought he entertained while serving as vice-president and head of growth at Indian online grocery store Grofers.

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Arora: [Singapore’s robo-advisors] don’t even have 1% of the banks’ [assets under management]. We will see more entrants come into this space

Two years later, Arora left to incorporate his company, and the digital wealth manager officially launched in Singapore in July 2019. “I asked myself, ‘With front office trading experience of billions of dollars a day, and with experience seeing a super successful start-up cater to billions of users daily; if someone like me doesn’t believe that you will get there, then who will?’ That was what led us into Syfe,” says Arora.

Last month, Syfe released Syfe Select, Singapore’s first fully customisable exchange-traded fund (ETF) portfolio builder. Arora says the new offering had been in the works for nearly a year.

<hr/>See: <a href="https://www.theedgesingapore.com/capital/company-news/syfe-introduces-singapores-first-customisable-etf-portfolio">Syfe introduces Singapore's first customisable ETF portfolio</a><hr/>

“We originally thought that launching themes would be relatively too easy, too simple. But the mission of Syfe is much more than just being a robo-advisor, it’s being a holistic digital wealth manager. We realised some people prefer curated themes but the key point was to build personalisation and customisation. That’s why it took a bit longer; but we’re happy,” he adds.

With Syfe Select, investors can construct their own portfolios from scratch, choosing up to eight ETFs from over 100 options.

Alternatively, investors who prefer ready-made portfolios can explore Syfe Select Themes, a collection of five thematic portfolios, namely <a href="https://www.theedgesingapore.com/tags/environmental-social-and-governance-esg">ESG (environmental, social and corporate governance)</a> and Clean Energy, Disruptive Technology, Healthcare Innovation, China Growth and Global Income.

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But given that the selling point of robo-advisors is relying on data instead of humans, is Syfe worried about tainting its agnostic approach?

Not so, says Arora. He believes the customisation options are not at odds with robo-advisory. Instead, they are complementary to Syfe’s platform.

“Syfe’s experts shortlisted those 100-plus ETFs from a pool of more than 10,000. So, we’ve chosen the best ETFs for you,” he explains. “When you build a custom portfolio, we actually tell you what is the risk of that portfolio. In some ways, these are the tools we were using internally; we have now made these available for the public.”

When users go shopping for ETFs to build their own basket, Syfe offers to sort the funds in a number of ways. One option arranges funds by popularity. “This actually came from user feedback. When building their portfolios, people sometimes want to know what’s popular on Syfe,” says Arora.

The three most popular ETFs on Syfe Select now are all from American investor Cathie Wood’s Ark Invest firm. ARK Fintech Innovation, ARK Genomic Revolution and ARK Innovation — all with one-year annualised returns above 30% — are labelled “very high risk” by the platform.

Wood is most famous for cheering Tesla on with her target price of US$3,000 ($4,049) in five years.

Users can also choose to view the least popular funds. “When users are deciding, some may think, ‘If something is mainstream, it probably already had its rally, and I’m not interested’,” says Arora.

The five pre-selected themes reflect mid- to long-term investing trends with “transformative” impact, he adds. By pairing the popular ESG category with an emphasis on clean energy, for example, Syfe’s users can invest in water treatment plants and solar companies, which have a direct impact on sustainability.

While China’s recent regulatory crackdown may have spooked some investors, Arora believes in the superpower and is personally invested in Syfe Select’s China Growth theme.

“In the long run, no one doubts that China will become the world’s largest economy.” Syfe Select portfolios have no minimum investment, no lock-ups, automatic dividends reinvesting and fees between 0.35% and 0.65% per annum.

Syfe’s REIT+ portfolio — which replicates the Singapore Exchange’s iEdge S-Reit 20 Index — has been one of the company’s most successful products since its launch in early-2020.

<hr/>See: <a href="https://www.theedgesingapore.com/capital/reits/syfe-drops-sph-reit-reit-portfolio-adds-lendlease-and-aims-apac">Syfe drops SPH REIT from REIT+ portfolio, adds Lendlease and AIMS APAC</a><hr/>

So popular, in fact, that Syfe has also welcomed users from across the Causeway. “We actually see a lot of interest from users in Malaysia,” says Arora. “I think there is some sort of cultural similarity with risk-taking appetites and the need for passive income.”

Syfe is licensed with the Monetary Authority of Singapore (MAS), and it does not market in Malaysia. “It’s purely through word-of-mouth, their own research, their own findings; we have never shown a single ad or webinar in Malaysia.”

Singaporeans are slowly warming up to robo-advisors, a trend led by millennial and Gen Z users. “The majority of our users are still in the 25 to 45 segment. We’ve seen an increase in users even younger than that.”

Those young users are encouraging their parents to sign up for Syfe as well. “What has been interesting for us is that we’ve also seen uptake among the above-50 segment. If you look at the assets they deploy, it is twice, if not thrice, of what the [25 to 45 year old] segment deploys,” says Arora.

Mature users may be more familiar with in-person financial advisors, but Arora thinks they are probably tired of hard-sell tactics. “Syfe is way cheaper, way more effective and way more transparent — one click and you’re ready to roll. When you go to an agent to withdraw funds, it’s almost emotional, you know.”

“I’ve always said that we are in the business of trust,” says Arora. That trust is deepening — in the first six months of 2021, Syfe’s AUM grew over four times.

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Besides Syfe, competitors Stashaway and Endowus are fighting for market share in Singapore’s robo-advisory space.

Despite the neck-and-neck competition, Arora maintains that Syfe’s goal is to wean Singaporeans off banks’ savings accounts as global interest rates turn negative.

“I personally think the competition is not with the names you mentioned. For us, the competition is quite clearly the saving bank accounts… If 10% of your wealth is in a savings account and the real rate of interest is negative, it’s a mild concern [and] you can live with it, in my view. But if 40% to 50% of your net worth is receiving a negative rate of interest, it’s a serious problem,” says Arora.

The robo-advisory space is still in a “super early phase” here, he adds. “All the players that you mentioned combined don’t even have 1% of the banks’ [assets under management]... We will see more entrants come into this space. We are all scraping just the tip of the iceberg."

Most of Arora’s investments are in equities

An “asset-light” strategy is Dhruv Arora’s portfolio of choice. “Most of my investments are in equities, some I’ve had for almost 10 years. My oldest investment might be Apple or Amazon shares, which I’ve held on for nine years or so.”

Unlike most investors here, the 36-year-old does not hold property. “All my property exposure is through the Syfe REIT+ portfolio. I still think it’s probably the best way, with no stamp duty.” He also invests in Syfe’s Core Equity100 portfolio and China Growth theme.

As an angel investor, Arora has written cheques for tech-enabled start-ups, the latest being a cross-border e-commerce company.

He says: “Every company I invest in has to have a tech angle to it, from e-commerce to FinTech and even podcasts.”

But his biggest investment by far is Syfe. “No surprise there. As a single founder, I think you have to put everything you have into the business you run.”

Working on the UBS trading floor in 2010, Arora would trade on leveraged forex futures with breaking news from the Federal Reserve Board and the European Central Bank. “I would put these FX leverage trades on five minutes before the news came out. I probably made money twice and lost eight times.”

Today, banks have strict controls on pre-trading approvals. Looking back, the gamble was not worth it, says Arora. “It’s not worth the stress, and you don’t make money. The only person who makes money is the broker.”

Now, he seeks comfort outside of financial products. “Some time back, I got into vinyl collecting. I’ve got this record player with the real and old-school amplifiers. This thing is 30kg to 40kg, massively heavy and generates a lot of heat.”

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Arora’s favourite investment is a record player with amplifiers weighing more than 30kg (Photo: Dhruv Arora)

Arora spends most weekends at The Adelphi — a mall located on Coleman Street frequented by audiophiles — and has collected about 300 records in his three-bedroom apartment in Robertson Quay.

“Music gives me a lot of joy. I do have a Spotify account and everything, but owning something physical, which has a real value to me, it’s by far my favourite asset.” Arora and his fiancée are also waiting for Covid-19 to pass so they can tie the knot.

“Hopefully, once things do get a little bit better, we will get married as well.” Unsurprisingly, his financial goals mirror that of Syfe.

He explains: “Simply put, I want to grow my wealth over time and I don’t want to let it erode by doing nothing. I feel leaving it in a bank account is eroding value. I keep a few months’ [worth] of reserves but my long-term goal is to maximise the potential of my work.”

Photos: Albert Chua / The Edge Singapore

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