The HYMC is suitable for retirees looking for an income stream to help meet their living expenses. The portfolio has no investment risk because it place monies into plain vanilla foreign currencies fixed deposits. We diversify the currency exchange risk by having the portfolio exposes to Euro, Sterling, Australia dollar and Kiwi. While the effective interest rates are similar to local banks’ rates, we offer value added service which cannot be replicated by others. Our value propositions are:

1. Diversification in banks (currently 8) to reduce bank credit risk. All banks chosen are investment grade rated but why put all money into one or two banks? We spread the money across many banks.
2. Diversification in currencies namely of EUR, GBP, AUD and NZD currencies to reduce currency risk.
3. Diversification in liquidity by arranging for 3,6,9 and 12 months tenure to provide “laddering”
4. Principals of each fixed deposits are automatically rollover to 12 months while the interest can be withdrawn.
5. Automatic regular interest income withdrawal to meet personal expenses. Can be monthly, quarterly, semi-annual or annual.
6. 8 banks x 4 currencies x 4 tenure = 128 permutation. We offer a single consolidated monthly statement.
7. Optional rebalancing to take profit from currencies already appreciated significantly in order to place fixed deposits that have depreciated in value.
8. “Interest income smoothing” technique to address the issue of falling interest rates.

The portfolio is meant for retiree to park the bulk of their entire savings into it. Capital is guaranteed in the respective foreign currencies although the capital is not guaranteed if converted back to Singapore dollar due to exchange risk. The HYMC is a highly popular portfolio among retirees looking for another source of income but has no desire to track so many fixed deposit statements. We offer a one-stop solution in implementing a portfolio of fixed deposits.  This portfolio was also mentioned in the INVEST’s magazine which can be downloaded here: The Best Retirement Investment Portfolio Ever!