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OPINIONS

Robo War Experiment (RWE)

An experiment started in January 2021 to compare performance of Endowus Equity100, Syfe Equity100 and StashAway SRI36%.

Tan Choong Hwee

Tan Choong Hwee

Edited 31 Dec 2021

Investor/Trader at Home

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

Background

I started my investment journey with robo advisor when I invested in Endowus 100% Equity Portfolio using CPF OA in July 2020. Since then I came across other robo advisors like Syfe and StashAway. I was curious to find out how the investment strategy of each robo advisor performs and how they compare with each other. Hence I decided to start a Robo War Experiment (RWE) in January 2021.

Common Parameters

  1. I have decided to choose the most aggressive portfolio from the 3 robo advisors: Endowus Equity100, Syfe Equity100 and StashAway SRI36%.
  2. Common source of funding for all 3 are cash in SGD.
  3. Initial lumpsum investment placed on the first trading day in January 2021.
  4. Monthly DCA placed on the first trading day starting from February 2021.
  5. Intend to continue monthly DCA until December 2021.

Performance Matrix

Monthly Return =

(Current Month End Portfolio Value + Current Month Redemption + Current Month Dividends) / (Previous Month End Portfolio Value + Current Month Investments) - 1

Quarterly Return =

(1 + Month 1 Return) x (1+ Month 2 Return) x (1 + Month 3 Return) - 1

YTD Return =

(1 + Jan Return) x (1 + Feb Return) x ... x (1 + Current Month Return) - 1

Annualized Internal Rate of Return (IRR) =

XIRR(Values, Dates) function in Excel

All portfolio values are expressed in SGD, so I have picked the SGD numbers from Syfe Equity100 and StashAway SRI36% portfolios.

Performance Benchmark

The selected benchmark indices are MSCI World Index, MSCI All Country World Index (ACWI) and S&P 500. Their performance numbers are simulated with the exact same initial lumpsum and monthly DCA amounts on the same dates as that of the 3 robo advisors.

All the 3 robo advisors' portfolios are globally diversified, so the more approprate benchmark indices to compare with would be MSCI World Index and MSCI ACWI. However, S&P 500 is also a popular index many people used as benchmark.

The simulated benchmark performance numbers don't include trading cost, so real life performance may be lower than the simulated numbers depending on the total expense ratios, tracking errors, brokerage charges, bid/ask spreads, and any other fees for the corresponding index ETFs or funds used.

What I didn't cater for in the simulated numbers are the dividend returns, simply because I don't have a source of total return data for all 3 indices.

Since the indices are expressed in USD, I have taken FX rate into account for the benchmark numbers.

Source of Data

Source of indices and FX rates are taken from the following links:

MSCI World Index - https://www.investing.com/indices/msci-world-historical-data

MSCI ACWI - https://www.investing.com/indices/msci-world-stock-historical-data

S&P 500 - https://www.investing.com/indices/us-spx-500-historical-data

FX Rates - https://www.x-rates.com/historical/

Performance Update

I had provided mid-year performance update on Seedly community in July 2021, and continued to provide monthly updates since then. Here are the links to these updates for your reference, but all relevant info are now in this Opinion post:

Mid Year 2021 - https://seedly.sg/posts/mid-year-performance-update-on-my-robo-war-experiment

July 2021 - https://seedly.sg/posts/robo-war-experiment-july-update

August 2021 - https://seedly.sg/posts/robo-war-experiment-august-2021-update

September 2021 - https://seedly.sg/posts/robo-war-experiment-september-2021-update

I would be updating performance in this Opinion post in future. Plan to update monthly until December 2021, and quarterly from 2022 onwards.

Here is the November 2021 Update:

Key Observations

  1. Endowus portfolio was taking a lead among the 3 robo advisors so far, and StashAway portfolio was falling quite far behind.
  2. Endowus portfolio followed quite closely the movement of the 2 world indices, and managed to outperform them.
  3. Both Syfe and StashAway portfolios were alternating between profit and loss from month to month.
  4. StashAway portfolio mainly sufferred a setback from exposure to China equity and Gold.
  5. Observation period is too short to make a conclusive verdict on their relative performance.

Referral Links/Codes

Endowus: https://endowus.com/invite?code=J6YV3

Syfe: SRPTRJTFQ

StasahAway: https://www.stashaway.sg/referrals/choonght43

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