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Robo-Advisors

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Robo-Advisors

Thaddeus Tan
Thaddeus Tan, Community Lead at Seedly
Level 6. Master
Updated 1d ago
! Robo-advisors are digital platforms created by humans which provide investment services with little to no human supervision as they are algorithm-driven. A typical robo-advisor collects information from clients about their financial situation and future goals through an online survey and then uses the data to automatically invest client assets. In Singapore, there are 5 robo-advisors you can choose to invest with. They are Smartly, Autowealth, Stashaway, MoneyOwl and Endowus. Although they might seem like they were started for the same purpose, there are differences which sets them apart from one another. We will examine them later on. I think that it is important to note that Robo-advisors is not really an asset class contrary to popular belief. Asset classes include stocks, bonds, ETFs, Unit Trusts, REITs and property. By using Robos to invest, you are effectively tapping on a platform so that you can invest in certain asset classes as compared to if you were to hire a financial advisor to do it for you or even DIY. Using robos enables you to adopt a low cost, diversified, passive approach especially since you are letting the algorithm invest for you. Instead, Robos act as platform so that you can invest in certain asset classes as compared to if you were to hire a financial advisor to do it for you. Now to address your question, whether robo-advisors are something that should be considered now, it ultimately voices down to what type of person you are. If you feel that you are somebody who is relatively new to investing, investing for the long term and lastly don’t have alot of time to choose and pick your stocks individually (more passive way of investing), then I feel that you CAN consider Robo-advisors. However, please still do your own due diligence. Let’s compare between robo-advisors and human advisors before diving into the pros and cons. 1. Low cost : The main advantage of robo-advisors is that they are low-cost alternatives to traditional advisors. By eliminating human labor, online platforms can offer the same services at a fraction of the cost. Robo-advisors thus charge a lower fee than a human advisor. 2. Services: The services offered by a robo-advisor is usually only investments. However for human advisors, they usually provide a wider range of services like financial planning etc. 3. What type of people they are for: ! Here are some of the pros and cons of associated with using robo-advisors to invest. ! So now that you know more about robo-advisors, let’s look at what robo-advisors are there that are available for you to invest with. In Singapore, there are 5 robo advisors. They are - MoneyOwl - Endowus - Smartly - Autowealth - Stashaway Here’s some history and their investment philosophy MoneyOwl History : Started in 2018 as a social enterprise and a joint venture between NTUC Enterprise Co-operative Limited and Providend Holding Private Limited, currently led by Chuin Ting Weber, CEO and CIO of MoneyOwl (previously DIY Insurance). Has other functions other than just being an investment robo. Investment philosophy : Building of Global portfolio via Dimensional Fund Advisors (DFA) & iFAST as the platform Endowus History : Started in 2017, led by Samuel Rhee, former CEO and CIO of Morgan Stanley Investment Management Asia. Investment philosophy : Building of Global portfolio via Dimensional Fund Advisors (DFA) & PIMCO fund Stashaway History : Started in 2016 by ex ZALORA Group CEO, Michele Ferrario, ex Nomura MD, Freddy Lim and CTO Nino Ulsamer Investment philosophy : A proprietary investment strategy called the Economic Regime-based Asset Allocation (ERAA) which continually monitors economic and market cycles to rebalance accordingly. Smartly History : Started in 2015 by ex start-up professional, Keir Veskiväli and Investment Analyst, Artur Luhaäär Investment philosophy : Modern Portfolio Theory (MPT) consisting of ETFs that efficiently capture the global stock markets as well as give exposure to bonds and real estate. Autowealth History : Started in 2015 by ex Investment Banker at government firm, Ow Tai Zhi and ex Management Consultant, Noel Lee Investment philosophy : A rule-based investment approach and strategy which places a strong emphasis on diversification across major asset classes, geographical regions, and industries. Should you need to take a look at the full comparison among the 5 robos, we have one here and also a video with the 5 different heads of the respective robos. Different robos have different investment methodologies as seen above. Although the robos are the one that is helping you invest, it will be good to understand the investment methodology of the different robos so that you can choose the one that best fits what you prefer. As always, the information as seen above is there to give you some background on the different robos in Singapore. Please do your own due diligence before deciding which robo advisor to invest with should you choose to use robo advisors.
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Stocks Discussion

Robo-Advisors

Investments

Retirement

Savings

Hi Darren, My name is Dhruv Arora, and I’m the founder and CEO of Syfe. Thanks for your interest in finding out more about Syfe. My experience as both an investment banker and then a consumer technology expert was a building block at Syfe - we always wanted to bring the best of financial services to the masses. Syfe is built for all investors, whether you are new to investing or a seasoned investor. And we have. Your process starts with understanding your correct risk appetite through our robust yet straightforward Risk Profiler (for free). That is when the real magic begins. Our proprietary Automated Risk-managed Investments methodology (ARI) will allocate assets which have shown the best return for your risk profile. But more importantly, it continually monitors your portfolio. During periods where higher market volatility has been forecasted, ARI will adjust your portfolio allocation and reduce your exposure to higher-risk asset classes. This ensures your portfolio risk stays aligned to your desired risk level. Conversely, during periods of market calm, ARI will adjust your portfolio allocation to allocate more to higher-risk assets, so your overall portfolio risk is kept in line with your desired risk exposure, but you can capture the market upside as well. The result is that ARI helps you achieve benchmark-beating returns by maintaining your desired risk level, no matter what market conditions maybe, just as a real wealth manager should do for you, round the clock. For more details on ARI, you can also check out our investment methodology paper here. I hope this helps. Do not hesitate to reach out should you have any other queries. Happy investing.

Investments

Robo-Advisors

Hi Kaiyang, thanks for your question and allow me to elaborate further on how Syfe helps investors manage their portfolio risk. If my years as a portfolio and ETF trader at UBS have taught me one thing, is that returns cannot be predicted, but risk can be managed. Hence at Syfe, we use percentages (e.g. 17% Downside Risk) to label our different portfolios rather than describe them with vague terms such as “conservative” or “aggressive”. This is so investors know right from the start, the level of risk they are taking on. The point to note is that this is not an amount you will lose, but rather we endeavour to define a possible loss level with a 97.5% probability. In other words, a 17% Downside Risk portfolio means that in the next 39 out of 40 years, the portfolio should not lose more than 17% of its value in a given year. In the event where the portfolio threatens to exceed this potential risk of loss, such as during a recession, your portfolio is automatically rebalanced to ensure your portfolio risk remains within your chosen downside risk level. This gives you better risk-adjusted returns, no matter what market conditions may be. You may read more about our Automated Risk-managed Investments (ARI) methodology here. A quick example of how ARI works is this. During periods where higher market volatility has been forecasted, ARI will adjust your portfolio allocation and reduce your exposure to higher-risk asset classes. This ensures your portfolio risk stays aligned to your desired risk level. Conversely, during periods of market calm, ARI will adjust your portfolio allocation to allocate more to higher-risk assets, so your overall portfolio risk is kept in line with your desired risk exposure, but you can capture the market upside as well. And while past performance is not a guarantee of future results, you can try out our portfolio forecast to estimate your returns. First, complete Syfe’s risk assessment. Based on the Downside Risk you’ve selected, you can change your inputs for your lump sum investment / monthly investment amounts and timeframe to forecast how much your portfolio can grow to. If you have more questions, please feel free to drop us a email at [email protected]

Investments

Robo-Advisors

Stashaway

Liew Ming Qiang
Liew Ming Qiang
Level 3. Wonderkid
Answered on 18 Jun 2018
It would be better if you are looking at long term investment to see good results, it also depends on what risk level you are into it too.

Investments

ETF

Robo-Advisors

Jay Liu
Jay Liu, Diploma in Accountancy at KHEA
Level 6. Master
Answered on 15 Sep 2018
How about both? When you invest in robo-advisors e.g. Smartly, you are investing in US ETF too. So it depends on the market exposure you are looking at. For smartly it's converted to sgd on the site when you view it. There is also a currency impact portion where you can view it too. It changes everyday so when you feel that it's time to cash out, you can do so.

Rent

Savings

Robo-Advisors

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Family

Lifestyle

Fan ZD
Fan ZD, Employee at A Bank
Level 3. Wonderkid
Updated 2d ago
Rented before as a student more than 10 years back, so the prices have probably changed by now. On the other hand, I have many Indian/Filippino colleagues on work pass who rent rooms in HDB flats - these can be anywhere between 400 to 800 per room depending on location. For example, rentals in Yishun are usually closer to the 400 range. Somewhere like Kovan or Tampines would be closer to 700/800. If you are looking at condos, they would be slightly higher due to the amenities, of course. For more price ranges, you can look at AirBnB too.

Investments

Savings

Lifestyle

Insurance

Robo-Advisors

Stocks

Harvey Tan
Harvey Tan
Level 3. Wonderkid
Answered 2d ago
Hi Read the following books before investing : 1. The Intelligent Investor - Ben Graham 2. The litte book of common sense investing - John Bogle 3. A random walk down wall street - Burton Malkiel It will serve you well in the long run.

Investments

Endowus

MoneyOwl

Robo-Advisors

Hi Caleb, you are spot on that we are on track in releasing our comprehensive planning platform as well as investing via SRS very soon! Other than that, be assured that there are a couple of other new features in the works regarding our investment platform to serve our clients better. Regarding your other question on new funds, we have an internal investment committee that researches regularly on possible new funds to add to our portfolios. Ultimately, any new funds has to be aligned to our investment philosophy and value add to the portfolios we provide in terms of risk, returns and exposure. As mentioned in the reply to your review of MoneyOwl , do send any feedback or ideas that you have to me at [email protected] ! Stay tuned to the upcoming new releases! ;)

Investments

Robo-Advisors

Endowus

MoneyOwl

Eddy Cheong
Eddy Cheong, Chief Advisory Officer at Moneyowl
Level 3. Wonderkid
Answered 3d ago
Hi Anonymous, thanks for the question. I'm from MoneyOwl and we use Dimensional funds in our portfolio construction. Dimensional Fund Advisors is a global investment manager dedicated to implementing the great ideas in finance. Guided by a firm belief in markets, the firm builds and manages strategies to help investors pursue higher expected returns. An enduring philosophy, strong client commitment, and deep working relationships with leading financial academics underpin Dimensional’s approach and form the foundation for new strategies. Through the research of Eugene Fama and Ken French, along with those of other leading academics, Dimensional has concluded that there are observable and persistent premiums to be found in certain dimensions of return, which can be harvested to give above market returns over the long term. For equities, these premiums are in small caps, value and profitability. For fixed income, they are in term and credit. For more information, you can refer to: https://advice.moneyowl.com.sg/the-right-building-blocks/

Investments

Robo-Advisors

Stashaway

Eddy Cheong
Eddy Cheong
Level 3. Wonderkid
Updated 2d ago
Hi Shannon, thanks for your question. My name is Eddy Cheong, Chief Advisory Officer of MoneyOwl, and I would like to share what we believe in and how we deliver our investment services for clients. MoneyOwl believes that good advice helps to bring about a successful investing experience and that such advice must involve a human element. Advice includes asset allocation, risk profiling, fund selection, monitoring, rebalancing and very importantly risk coaching to help investors stay invested through turbulent market times. There are many reports that show that investors lose out on market return because they panic and sell too early. Thus an adviser adds value when he or she can help investors understand how markets work and stay invested over the long term in order to capture market return, rather than time the market. Our investment philosophy and the expression of it through the way we construct and manage portfolios - when coupled with advice - give clients a very good chance of a successful investing experience. Because we are at our core advisors, more than fund managers, (even though we have a full-fledged fund management licence), we do not define successful investing as being about maximising return or even maximising risk-adjusted return. Rather, we want to advise and structure investments for clients in such a way as to give you the best odds of meeting your goals. From a combination of evidence we have examined and experience including across the GFC, we know that the keys to successful investing lie in 4 areas : - being globally diversified - aiming for market-based return, rather than trying to beat the market through "active management" (either by adjusting asset allocations tactically in response to reading of economic conditions, forecasts or events); - keeping costs low ; and - staying invested over the long term. You can find more information here: https://advice.moneyowl.com.sg/the-right-way-to-invest/
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