Robos: What are the pros and cons of investing directly into ETF shares vs using managed funds? - Seedly
 

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Asked by Kelly Trinh

Asked on 18 Nov 2019

Robos: What are the pros and cons of investing directly into ETF shares vs using managed funds?

I understand that one marketing point is that some Robos have marketing point that the shares are in your own name (not commingled) vs others that do more custody tricks or use managed funds.

Unfortunately a bit blur on the pros and cons of each approach - could anyone share insights?

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Paridhi Jhunjhunwala
Paridhi Jhunjhunwala, Associate at Kristal.AI
Level 7. Grand Master
Answered on 28 Nov 2019

Hi!

The advantage of investing via a robo-advisor is that you can make use of the algorithm to generate a portfolio, which is best suited to you financial goals and risk appetite. You will not have to invest time in researching about the ETF and then making a selection.

Ofcourse, this service will come at a fee. At Kristal.AI, investments upto USD 50,000 are free of any charges. This will enable you to experience the platform and it features and then invest further.

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Short answer:

Investing directly will save you the fees involved with the middle man (the managed funds)

That also means you have to spend more time and effort to allocate and invest your funds accordingly.

With managed funds, you will be saving time by having someone do that for you! Of course that comes with a small fee.

No Pros and Cons, just whichever you prefer.

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