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AutoWealth

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Anyone can share their returns (what level) for AutoWealth?
Hi there, unfortunately I cannot provide you with my returns as I have just started off last month. But what I can share is why I chose AW compared to the rest. This reason is due to the custodian account that AW creates for us investors and is also the reason why I would invest in Endowus in the future too for SRS/CPF. This is from my understanding, if I'm wrong, the seedly community will correct me. AW employs the use of Saxo Markets as the custodian account in my name, while other robos has a generalised custodian account. A general custodian account is where all the investor's month is parked at, all in to 1 account. So, as robos are relatively new, there is no guarantee they'll still be around in 30yrs. Therefore, with a custodian account in my name, if the robo company fails, the stocks are in my name and I get to choose when I want to liquidate. If the robo company with a general custodian account fails, say during covid when markets are red, you'll be cashed out at whatever the stocks are worth at that point. This sense of security is why I chose AW other the other robos, even tho other robos offer a higher return. Additionally, I'm young and my investment goal is for retirement, my risk profile is 4, 80% equity and 20% bonds. I may consider to downgrade my risk at later stages. Anws, with regards to actual returns, I quote my Wealth Manager using the quarterly report as of Sept 20. 2017 @ 6.01%, 2018 @ -6.08%, 2019 @ 19.56%. Sept 2017 to Sept 2020 is at 20.87% (nett of fees). So average of 6.9% for a risk 4 profile. Yes each AW investor has an assigned Wealth Manager. And there's an investor telegram chat where the CEO replies investors. I would like to add that investors that started in 2020 would not be able to provide a proper indication on AW returns due to the bull market due to covid. This is my sharing and not financial advice. Cheers!

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What is the difference between Autowealth and StashAway?
Difference 1: Investment Style Autowealth seeks to track the MSCI All-Country World Index/MSCI World Index and the FTSE World Government Bond Index, a more passive strategy. On the other hand, StashAway employs their own strategy called ERAA which you can read more about here. It is essentially an all-weather portfolio, and the portfolio may be re-balanced depending on the economic climate. If you prefer a more passive strategy, then perhaps Autowealth is for you. Otherwise, you can consider StashAway. Difference 2: Starting Capital Autowealth: SGD3,000 StashAway: No minimum Difference 3: Custodian account vs Co-mingled assets Autowealth: A custodian account with Saxo will be opened under your name. StashAway: Your funds will be co-mingled with others. The custodian account that is opened under your own name gives an additional layer of security. Additionally, even if Autowealth were to go bust, your ETFs will not be liquidated. If you prefer StashAway, you also need to be okay with the way your assets are managed. Difference 4: Fees Autowealth: 0.5% + 18USD StashAway: 0.2% - 0.8% Conclusion As to which robo-advisor is a better option, it really depends on your preference. What investment style do you prefer? How do you want your assets to be managed? Do you have enough capital? Are you okay with the fees? I initially invested in StashAway as my minimum capital was small. Later on, I decided to switch to Autowealth because I preferred its passive strategy and I felt more assured knowing that a custodian account will be opened under my name. This is despite the fact that I would be paying lesser fees with StashAway. I didn't mention anything about performance because past performance is not an indicator of future performance. Both robo-advisors would probably yield satisfactory returns, so I prefer looking at other aspects to determine which I was more comfortable with. DISCLAIMER: Opinions expressed here are my own. This does not constitute financial advice. Do your own due diligence.

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Is this portfolio diverse enough - AutoWealth Risk Profile 3 + Syfe REIT (REITs with Risk Management) + S&P500 by FSMOne RSP? Or are there overlaps which I need to be concerned of?
Chris

Chris

Level 6. Master

Answered 6d ago

It seems diverse enough, covering most key markets, Europe, US, AsiaPac as well as covering both bonds and equities. Regarding overlaps, note that your Autowealth Portfolio does have a significant percentage in VTI which has large overlaps with the S&P 500 although not entirely the same.

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Which robo-advisor is the best in your opinion - StashAway, Syfe or AutoWealth?
Hi there, I have invested in 3 Robo-advisors, namely StashAway, DBS Digiportfolio, and Syfe. Currently, all of them are giving almost similar returns of around 10%. You can take a look at the breakdown here. With these robo advisors are giving relatively similar returns, I would recommend you choose one that suits your investing style. Look at the types of ETFs there are buying into and also their investing methodology.

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Should I invest now?
Yes. It is better to have "time in the market" than "timing the market". In short, get your hands dirty and put the funds in, regardless of how you do it. Since you have a plan, stick to it and get the ball rolling. About money, just throw in money that you can afford to lose and not lose sleep over. The longer you stand on the sideline, the more opportunities you will miss that might come.

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With bond yields so low, should I still include it as part of my portfolio?
Hi Anon, We should first answer the question of why are we including bonds as part of your portfolio. When used as part of a portfolio of investments, bonds serve the purpose of diversification from the equities. Put simply, bonds are a traditional asset class which lowers the volatility of your portfolio. It is unlikely you are invested solely in the bond market. Bond yields are not great for achieving your need for a higher return over the long term. It is also worth noting that there are high yield bonds available for investors but these are typically riskier than investment grade bonds. At MoneyOwl, we use equities to capture market returns and bonds as a stabiliser of our portfolios. We use bond funds in 4 of our 5 investment portfolios. You can read more here.

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After going through all of the robos in the market, i've narrowed down to autowealth and endowus. Which would you recommend or prefer, please share reason too?
Hey Anon, this is a tough decision to make. I love both Endowus and AutoWealth, and both robo-advisors have a place in my portfolio . However, if I can only choose one, I'll go with Endowus! Here are the reasons why you should go with Endowus or AutoWealth - - Why Endowus? 1) Access to Dimensional Funds Endowus is one of the cheapest and easiest ways to get access to Dimensional funds (DFA). Previously, you can only buy Dimensional funds through a financial advisor or broker approved by DFA which means that you can't simply do-it-yourself through a brokerage platform such as FSMOne or Dollardex. In contrast, the ETFs which AutoWealth or any other robo-advisor (StashAway/Syfe) uses, can be easily replicated and constructed on your own using any brokerage platform. 2) All-in-One Platform Endowus is an all-in-one platform that allows you to invest your cash, SRS, and CPF. This makes it a holistic platform and from my understanding, this is one of the reasons why people use Endowus - the convenience of being able to deploy their cash, SRS, and CPF to work towards their goals all on one platform. Not to mention, currently Endowus is the only robo-advisor that allows you to invest using your CPF. In comparison, AutoWealth only supports cash for now. 3) FX and Tax-Friendly The funds used by Endowus are both FX and tax-friendly. Equities are SGD-denominated while bonds are SGD-hedged, and this means that you do not get exposed to FX volatility, removing any FX risk and cost. It's also tax-efficient as you won't be subjected to the 30% US withholding tax. - Why AutoWealth? 1) Same Day Deployment of Funds While ideally, we shouldn't try to time the market, I'm sure that some of us would like our funds to be deployed as soon as possible especially if the market dipped quite a bit the previous day. For AutoWealth, your funds will be deployed on the same day when the market opens at night, so long as you deposit your funds before 5 pm. From my experience thus far, the funds usually appear in my SAXO account almost immediately and have been deployed on the same day. In contrast, Endowus has a lead/lag time of one day. This means that if I deposit some funds today, it'll only be received and deployed the next working day. Ultimately, I don't think that this is much of a deal-breaker given that the purpose of using a robo-advisor is to "deposit and forget" and not time the market. 2) Rebalancing during Periods of Volatility During periods of volatility, AutoWealth will actively rebalance your portfolio to buy equities at a discount and after it recovers, it will rebalance again to take profit from the equities as well as to bring your portfolio allocation towards your portfolio allocation. According to AutoWealth, their balanced portfolio earned an extra 3.5% returns in March 2020, during the market downturn/COVID selloff. These extra returns can in turn, be used to offset the management fees paid to AutoWealth. 3) Dedicated Wealth Manager & Timely Market Updates For AutoWealth, each client is assigned a dedicated wealth manager who is just one message away for any queries you may have. This is great if you're someone who needs some hand holding to guide you through your investing journey. AutoWealth also has a Telegram group where they will provide updates on the market as well as opportunities for a lump sum deposit during a market correction - great for those who don't monitor their portfolio. Hope this helps you to make an informed decision!

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If StashAway can use SRS funds, should I still use AutoWealth?
Haven't heard that AutoWealth offers SRS but if they do, I'd go with AutoWealth because of lower fees for the capital I have. Otherwise, you only have a choice if you want US ETFs. I use Endowus.

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Anyone here invest in autowealth? Can share ur experience and if don't mind, performance/returns too?
Hey Anon, I've been investing with AutoWealth since July this year and the current time-weighted return stands at 12.93%. In my opinion, AutoWealth is an underrated and one of the lesser-known robo-advisor simply because they do not splurge on marketing as compared to StashAway or Syfe, be it Facebook/YouTube/Google or even MRT advertisements. Another reason could be the higher minimum investment amount of S$3,000 as compared to the other robo-advisors in the market, which might be a turn-off for some. However, all these are for good reasons. On a side note, I always look forward to seeing Tai Zhi's (CEO of AutoWealth) message where he shares that there is a market discount, which presents an opportunity for a lump sum deposit. 1) Sustainability and personal custodian account AutoWealth is the first robo-advisor to turn profitable, so you can rest assured that your hard-earned money and savings are in good hands in the years to come as investing is a long-term thing. I'm sure you wouldn't want to be in a situation where the robo-advisor becomes insolvent and decides to cease operations, as in the case of Smartly. Honestly, I can't imagine the amount of frustration their clients must have felt when they had to liquidate their holdings during the March sell-off/crash, possibly having to realise their paper loss. Of course, nothing is certain and in the unlikely event of AutoWealth deciding to cease their operations, you do not have to worry because your holdings are held in a separate custodian account with SAXO, under your own name (legally) as opposed to StashAway or Syfe where it's co-mingled together with other clients. This means that you have the option of being able to continue holding onto the ETFs, instead of being forced to sell (automatically). 2) Minimum investment amount The reason why AutoWealth requires a minimum investment amount is that they need to buy the whole unit of an ETF, i.e. doesn't support fractional shares. I once asked Tai Zhi if they would consider supporting fractional units so that there will be lesser cash left uninvested in the account or being able to DCA a smaller amount (<$200). He left me with an intriguing food-for-thought, I quote "I generally don't like to comment on particular roboadvisors. You got to ask yourself when you own a fractional unit, how can you have clear ownership of the one unit when you only owns a part of that one unit and someone else owns the other part of that same one unit? What happens if one party who owns part of the one unit needs to sell in a portfolio rebalancing whilst the other party who owns the other part of the same one unit does not need to sell? Therefore, we have no intention of creating ambiguity in ownership. Personally, I can share bicycle, share a Grab trip (without COVID). But I would certainly not want to risk sharing ownership of my personal investments, because these are hard earned savings & wealth." You can clearly see that AutoWealth priorities the safety/security of your money to prevent the same situation as Smartly. If you're looking to begin your investing journey with AutoWealth, do sign up with my full name, which can be found on my profile description and you'll be able to enjoy a one-time top of S$20 into your account. To end off, here's the current performance of my portfolio - !
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Is AutoWealth more cost-effective than a DIY approach with Interactive Brokers when dealing with more than USD100,000?
Interactive Brokers is pretty hard to beat when it comes to large amounts - they will not charge you any monthly minimum commission as long as you hold 100,000 USD or more in assets with them. Autowealth charges a 0.5% + $18 fee which is rather attractive. A cursory look at a few reviews and blogposts tell me a few things: - The seem to offer a fairly decent exchange rate - They invest in US-domiciled ETFs (30% WHT!) - It does not appear that they factor in the costs of the ETFs (expense ratio) I think investing into US-domiciled rather than Irish-domiciled ETFs is one of their biggest downsides, mainly because of the higher withholding tax rate of 30% (vs 15% for Irish-domiciled) and estate tax liability. They also seem to exclude ETF fees from the calculation of their fee so the overall costs are probably higher as well. Personally, in this situation, I would rather invest into an Irish-domiciled, globally diversified ETF like VWRA/VWRD.

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