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Anonymous

05 Dec 2019

Robo-Advisors

Is there a point to diversifying between different robos?

I have 9k and was thinking of putting 3k each into stashaway, autowealth and kristal ai. I thought 3k as that was the minimum for autowealth and I wanted to use the same amount for better tracking as to which does better. Or, would it be better tor rather put all 9k into one robo directly?

Discussion (7)

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I use two robo-advisors for different portfolios due to the underlying allocation. One income, one growth. Also to try out the platforms.

Not so much for diversification.
Since most robo-advisors invest into ETFs, it’s all “equities”.

Risk will be related to your risk appetite and the underlying ETFs/investments made by the robo-advisor. If the portfolio allocation between the robo-advisors are similar, there might be small differences in the returns. Again it also depends on the algorithms, rebalancing and investment strategy used by the robo-advisor.

Perhaps another way to look at this is understanding how to reduce your investment costs as much as possible to maximise your returns? This is something that you can do research on and control.

Elijah Lee

05 Dec 2019

Senior Financial Services Manager at Phillip Securities (Jurong East)

There's no real reason to diversify in this fashion since the robos are already diversified, and since their investment strategies are not alike, its also not fair to dump in 3K each and do a comparison. Instead, decide if Robo is something suitable for you in the first place, and then find the Robo service that you prefer.

But key point to note is that you must be prepared to go in for at least 3 years or more. And in the short term, you can expect to see losses due to volatility. Just because you handed your investments over to a Robo does not guarantee you'll make money.

Bjorn Ng

04 Dec 2019

Business Analyst at 10x Capital

Hello there! I don't/haven't use any robo-advisors yet, though I've done some reading on it.. But generally speaking, I think there is no need to diversify between different robos, because each robo are already diversified according to your risk preference. Having 3 robos is like.. duplicating your 3 basket of eggs, if that makes any sense!

Don't think there is a need to diversify across all 3, one is good enough. It is true there is a platform risk, but i feel this risk is small enough

The only reason if you want to spread your eggs across 3 robo-advisors is to diversify your investme...

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