Robo War Experiment (RWE) Update – March 2022

This Opinion post first appeared in my blog here: https://pwlcm.wordpress.com/2022/04/04/robo-war-experiment-rwe-update-march-2022/

This is a performance update to my Robo War Experiment (RWE) posted here: https://seedly.sg/opinions/robo-war-experiment-rwe-update-february-2022/

Disclaimer: This post is just for educational sharing purposes. Please do your own due diligence on any products mentioned in this post.

Performance Update

Here is the March 2022 Performance Update:

It is worth noting that StashAway was the only robo advisor that suffered a loss in March, while the other 2 robo advisors and the benchmark indices staged a decent recovery.

On 14 March 2022, I received a notification email from StashAway that they are re-optimizing the SRI 36% portfolio. The key change was the reduction of exposure to China equities, citing the risk of secondary sanctions on China due to its close relationship and continued dealings with Russia amidst its invasion of Ukraine:

As seen in the above changes in SRI 36% portfolio, the China equities (represented by KWEB) exposure is cut to 0% allocation Let us see what was the price movement of KWEB from 14 to 31 March 2022:

KWEB staged an impressive 34.54% recovery from $21.19 to $28.51 during this period. With KWEB previous allocation ranging from 16%~24%, it could have been a 5.53% to 8.29% impact on the SRI 36% portfolio respectively. That alone could improve the March return from -3.45% to the range of +1.89% to +4.55% respectively.

To be fair, StashAway had taken the appropriate action cutting allocation in China equities with respect to risk management. It is just that they were unlucky with their timing, where they sold KWEB near the recent swing low and missed the recovery to end March. It goes to show how difficult it is to time the market.

At the moment, KWEB chart remained bearish as the price is below the Ichimoku Cloud. It may still turn down further and justify StashAway re-optimization action.

Key Observations

1. Both Endowus and Syfe recovered and turned into positive territory for March, inline with the recovery of the benchmark indices.
2. StashAway suffered a loss in March due to the ill-timed portfolio re-optimization that cut their China equities and missed the recovery of KWEB from mid March.
3. Till date, Endowus is the best performer among the 3 robo advisors. StashAway is falling behind by a great margin, it is going to take a long time for them to catch up with the rest.

Referral Links/Codes

Endowus: https://endowus.com/invite?code=J6YV3
Syfe: SRPTRJTFQ
StashAway: https://www.stashaway.sg/referrals/choonght43