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 on 27 Jun 2020

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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HeYuan Chen
HeYuan Chen

27 Jun 2020

Is autowealth consider one of e more passive robo?
Leroy

27 Jun 2020

I see your point. No wonder Stashaway and Syfe’s strategy are black-box/proprietary in nature while EndowUs, MoneyOwl and alike are more “open”. Thank you Hariz.
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