Hi, what do you think about the Robo advisor platform available in Singapore (Syfe, Stashaway, etc.), how do they compare against actively managed funds?

At Syfe, we believe in passive investing, which is the time-tested approach to grow your long-term savings. As such, our portfolios consist of globally diversified portfolio low-cost index funds.

Actively managed funds may try to beat the market. However, numerous studies have shown that active fund managers usually fail to beat their index targets over the long term once costs are factored in. For one, all that buying and selling of stocks racks up large transaction costs.

According to the S&P Indices Versus Active (SPIVA) 2019 scorecard, 97% of actively managed large-cap funds have underperformed their benchmarks over the last 10-years.

In contrast, passive investments like ETFs (which Syfe offers) don’t try to pick which stock will perform well. Instead, they invest in all the stocks reflected in their benchmark index. By capturing the market’s return at low cost, ETFs typically outperform their active counterparts over the long haul. ​​​

If you’re just a retail investor, try out Robos, cheaper fees and better accessibility with Low initial investments. Rebalancing that robos do could be one reason why they have outperformed benchmark indexes.