For robo-advisors, is a higher risk profile definitely going to do better than a profile with a lower risk?

A higher risk profile (with higher equity exposure) will probably do well than a lower-risk profile in a weak/recession environment only IF you double/triple down your contributions when market is dropping & you had the patience to wait/hold/re-invest it over long-term to see your decisions bear fruits :)

Hi Anon!

The difference between a high-risk and a low-risk profile would be in terms of the risk appetite of the investor (in this case you). The risk profiles would generally be determined based on a questionnaire filled in prior to investing. Some platforms will recommend a few different risk profile options, ranging from low to higher risk profiles.
In that sense, a high-risk profile would generally yield a higher possible return but at a higher cost in terms of risk. On robo-advisory platforms, the more attractive higher return numbers indicate the average highest returns possible but they do not indicate a guarantee return of the stated figure. The same happens for a lower-risk profile where the average highest return possble is not a full guarantee. The returns would be lower because less risk is being taken on in a lower-risk profile.
Generally speaking in terms of portfolios, a higher-risk profile would be recommended portfolios that are comprised of a higher weight in equities than fixed income/bonds. Even within fixed income, a higher-risk profile might weight investment grade bonds lower than a lower-risk profile!

Hence the general underlying idea is that higher possible returns come at a cost of higher risk. However, diversification is important when it comes to constructing your own portfolio to ensure that your investment risks are diversified away in times of uncertain market movements. kristal.AI is a robo-advisor platform that allows you to gain access to global ETFs and provide you plenty of information within each ETF on the platform.

All the best in your investment journey!