Robo-Advisors

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Robo-Advisors
  • Asked by Anonymous

  • Asked by Lai Chong Chao

    Nicholes Wong
    Nicholes Wong, Diploma in Business Management at Nanyang Polytechnic
    195 Answers, 288 Upvotes
    Answered 1d ago
    The tax is on dividend. So example you get 1% dividend for a particular us stock. You will have to pay 0.3% to US government and you keep 0.7%. If you were to buy ireland domiciled ETFs from london stock exchange, the withholding tax will be reduced to 15% as they have tax treaty with the US. If you dont want to buy etf yourself, robo advisors are alright.
  • Asked by Anonymous

    Loh Tat Tian
    Loh Tat Tian

    Top Contributor (Dec)

    198 Answers, 292 Upvotes
    Answered 4w ago
    A lot of people are in the red now. I agree with the Nicholas and Yang Teng. I'm comtemplating to increase my monthly contribution precisely because the market is falling (this is a method done called, dollar cost averaging). The method works because we anticipate all these indexes to rise again after a few years. But never, ever DCA into a stock, unless you are sure it will not bankrupt and will rise again as a superstock.
  • Asked by Anonymous

    Luke Ho
    Luke Ho, Money Maverick at Money Maverick
    127 Answers, 225 Upvotes
    Answered on 06 Dec 2018
    Insurance savings plans are typically put into a participating fund with an element of guaranteed and non-guaranteed returns comprising of majority bonds. The general idea is a very conservative growth that keeps up or just slightly beats inflation while preserving capital as well as other features such as a higher benefit in the event of untimely death and expedited payouts. You typically expect 2.5 - 4% net overall. There are other RSPs, especially commonly offered by POSB Invest-Saver for the STI or the ABF Bond Fund, which can have mixed returns as well ranging from 2 to about 7% depending on your risk profile. Lastly, Robos also have a range of risk that you can choose from which will typically generate between 3 - 10% annualized. The risk for robos is typically much higher, since the investments are made overseas and have more focus towards equities - so you add up things like currency risk. Of course, you also get a higher return. In summary, no, they are not the same. Higher risk is higher return. But if you're looking at 'savings' in a conservative sense and not 'investing', then you should stick with conservative investments. If you want to invest aggressively, you can do much better than robos. You can always drop me a PM if you'd like to start saving. https://www.facebook.com/luke.ho.54.
  • Asked by Anonymous

    Gabriel Lee
    Gabriel Lee

    Top Contributor (Dec)

    366 Answers, 558 Upvotes
    Answered on 24 Aug 2018
    Fees, minimum investment & ETFs Fees (From 1.5 to 1%) are slightly higher as compared to StashAway (From 0.8 to 0.2%), Smartly (From 1% to 0.5%) and AutoWealth (Flat 0.5% + USD 18) depending on the amount that you're investing. OCBC's RoboInvest requires at least $3.5k, Smartly ($50), StashAway ($1), AutoWealth ($3k). OCBC's RoboInvest ETFs has a wide array of choices from different industries/categories and markets while for the other players, you just choose the risk index and the ETFs available have been pre-allocated/chosen. Refer to Seedly's comparison between the 3 robo-advisors, namely, StashAway, Smartly and AutoWealth https://www.google.com.sg/amp/s/blog.seedly.sg/singapore-robo-advisor-investment-comparison/amp/
  • Asked by Anonymous

    Amanda Ong
    Amanda Ong
    5 Answers, 11 Upvotes
    Updated on 11 Sep 2018
    Hi! Just to share, we have just reimbursed the witholding tax refund last week to all clients who are entitled to it for the FY2017. If you received a reimbursement, you would have received an email from us informing you of this :)
  • Asked by Alvin Leong

    Tai Zhi
    Tai Zhi
    23 Answers, 29 Upvotes
    Answered on 07 Jul 2018
    You may wish to note that "period-based" rebalancing is inferior and does not achieve the two main objectives of portfolio rebalancing, namely (i) risk management and (ii) the ability to lock in extra value-add returns. This is well-documented in David Swensen's book “Pioneering Portfolio Management”. FYI, David Swensen was the first institutional investor in the world to adopt and formalise portfolio rebalancing as an investment technique. David Swensen is highly regarded in finance and investments globally. Anyway, here's why "period-based" portfolio rebalancing is inferior and does not achieve the two main objectives. Imagine an investor who experiences the trade tension in 1Q 2018 and subsequently in Jun 2018 markets fully recovered back to where it was before the market correction. (i) Risk management - the portfolio will be underweighted in Stocks and overweighted in Govt Bonds during the heat of the market correction in Feb 2018. This means the risk level of the portfolio will no longer be consistent with what the investor originally wanted and this inconsistent risk situation may well persist for some time (it did persisted till Mar 2018). (ii) Ability to lock in extra value-add returns - An investor who adopt "period-based" rebalancing would have missed out the interim opportunity to sell Govt Bonds when it has appreciated in value and missed out the interim opportunity to buy Stocks when it has declined in value in Feb 2018 at the heat of the correction. Similarly, the same investor who would only spend 5 mins on 30 June 2018 would subsequently missed the opportunity to take profit when markets rebound and Stocks appreciate back to where it was. In "threshold-based" rebalancing, which AutoWealth adopts, portfolios are analysed and monitored daily to identify material deviations from the original intended portfolio allocation weights. Whenever there is a material deviation, the portfolio is automatically rebalanced. This means the portfolio risk is managed and consistent with what the investor originally wanted. This also means AutoWealth can capitalise on excessive day-to-day, short-term market volatility to lock in extra value-add returns for clients. Statistically, portfolio rebalancing achieves 0.5% to 0.7% extra value-add returns on average over the long term, depending on which portfolio risk level the investor selects. We note that the 0.5% to 0.7% extra value-add returns adequately covers the fees we charge our clients. Therefore, it is much more cost-efficient to invest through AutoWealth as compared to DIY.
  • Asked by Anonymous

    Tai Zhi
    Tai Zhi
    23 Answers, 29 Upvotes
    Answered on 10 Jul 2018
    FX Risks At present moment, FX hedging is very costly especially for portfolios below S$1m in size. We do not foresee FX hedging cost reducing to a cost-efficient level over the next few years. As and when hedging cost significantly reduces to a cost-efficient level, we will be more than happy to offer FX hedging option to our clients. You may also note that USD and SGD are major currencies and they tend to be relatively more stable compared to other emerging markets currencies. Therefore, while FX risk is material, FX risk is not significant. This is especially so for investors who have a medium to long term investment horizon. For example, the AutoWealth Balanced Portfolio (60% stocks, 40% govt bonds) achieved 15.7% returns net of fees on a USD basis over the last 26 months since inception. The same portfolio achieved 16.4% net of fees on a SGD basis over the same period. Therefore, the difference of 0.7% due to FX impact is relatively small. Tax Implications The U.S. imposes a withholding tax on dividend payments made out of U.S. listed securities. These are automatically deducted at source before the net dividends are credited into the client's custody account in his/her legal name. Despite a relatively higher withholding tax, ETFs listed in the U.S. are still preferred over ETFs listed in other countries like the U.K. after taking into consideration factors including liquidity, bid-ask spread, expense ratio, ETF fund size amongst other factors.
  • Asked by Anonymous

    Tai Zhi
    Tai Zhi
    23 Answers, 29 Upvotes
    Answered on 07 Jul 2018
    Unlike other robo-advisors with complex strategies and algorithms, AutoWealth adopts a simple, easy-to-understand market-tracking investment strategy. An investor can expect his/her investment returns to approximate the general market returns of world stocks and govt bonds through a market-tracking strategy. The risk of underperformance is strongly mitigated. However, a market-tracking strategy does not necessarily means that investors will certainly not make a loss all the time. At times when general markets are declining, an investor would expect his/her portfolio to decline about the same extent. However, do note that at some point portfolio rebalancing may be triggered to sell govt bonds (take profit on safe haven asset in a downturn) and buy stocks (buy risk assets when its cheap). Eventually when general markets rebound, the rebalanced AutoWealth portfolio will now generate higher returns as compared to general markets. Standard & Poors Dow Jones maintain an extensive research on active vs passive (ie market-tracking) for more than a decade now. The results have been consistent over the years. Due to its comprehensiveness, its extensive coverage and consistency, this research has now became the authoritative conclusion between active vs passive. You may read the research here: https://us.spindices.com/documents/spiva/spiva-us-year-end-2017.pdf
  • Asked by Anonymous

    Tai Zhi
    Tai Zhi
    23 Answers, 29 Upvotes
    Answered on 10 Jul 2018
    Unfortunately, AutoWealth only accept cash investments at this moment.
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