Are all robo-advisors really passive? What are some of the definitions of passive investing? What is your definition? Seems like some are pseudo-passive, what are your thoughts? - Seedly
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Leroy

Asked 2w ago

Are all robo-advisors really passive? What are some of the definitions of passive investing? What is your definition? Seems like some are pseudo-passive, what are your thoughts?

Some robo-advisors preach passive investing but adopt an active and/or tactical algorithmic strategy, as far as I’ve read their white papers.

Some adopt risk-parity allocation while others use a traditional asset allocation.

The use, ETF or UT, does not matter to me, the implementation of it seems to be no different from an active fund.

What is passive investing, in your own words? Is does it only apply at the end-user level or higher level?

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In my opinion, if you're making active shifts in your portfolio allocation in response to any market activity or sentiment, you can't be called passive investing. Other than rebalancing to stick to the original asset allocation decided, every other portfolio decision is an active one.

And that's ok. As long as you accept it.

The only way to be as passive as possible is to buy and hold and do nothing till your goals are met.

You can passively invest into active investment tools like Active ETFs or Mutual Funds like EndowUs or actively invest in passive tools like Stashaway or Syfe.

As long as you're investing regularly, and staying invested, while monitoring costs, that's fine.

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Leroy

2w ago

Hi, HeYuan Chen, I’m no client of Autowealth but I hope my answers can give you some clarity. It is still best to e-mail/call them directly. Passive investing, imo, are: 1) broad based investing across all major geography regions (US, EU, APAC, Emerging Markets) and all sectors/industries; 2) as well as covering all local international and developing countries. Based on my preferred definition of passive investing, yes Autowealth is passive along with Endowus & MoneyOwl.
Leroy

2w ago

One difference is they use ETFs over UTs.