Am I having a gain or loss for my robo-investment in 2019? - Seedly
 

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Asked by Anonymous

Asked on 14 Oct 2019

Am I having a gain or loss for my robo-investment in 2019?

Invested in one of the ROBO investment not long ago. Currently, my account is losing a few hundred SGD but if it's switched to USD, I am actually earning.

I am confused, am I earning or losing money??

My view is since they are investing in USD so should be alright?

If SGD currency drop and USD currency rise then it will come to good?

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Brandan Chen
Brandan Chen, Financial Planner at Manulife Singapore
Level 7. Grand Master
Answered on 15 Oct 2019

In short, you are losing money because you invested in SGD and if you were to liquidate today, you would suffer a loss due to FX fluctuations.

However, on the bright side, your robo-advisor did make positive gains since it is denominated in USD.

For investments involving foreign currency, it's would be prudent to take into consideration FX fluctuations, on top of the underlying investments if your aim is to receive your investment returns back in SGD. However, there are also specific funds that provide FX hedges against such currency movements but it may or may not work in your favour depending on the skill of the fund manager!

Such investments should be kept for the long term, would be good to check in once in a while instead of every month!

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Hi,

What you are experiencing now are two different issues.

First of all to clarify certain details: You said you are making a gain, compared to SGD put in or USD to USD?

Either way, if you are confident of the basket of funds that the robo-advisor is investing in. Such fluctuations are frequent and most robo-advisors are intended to be invested for the long term.

The other thing you are experiencing is currency risk. There will be frequent USD/SGD movements that you are currently being exposed to. If the sum invested is smal this movements usually do not affect you greatly.

More information is required for me to answer this question appropriately.

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