Well, 6 months in to both Algebra & Farringdon Robo and I have to say that we are over the moon with not only the performance but by how the industry has accepted us.
We have seen consistent growth of our portfolios and generally out-performed the benchmark so our algorithms and talented portfolio team have done fantastically well.
Fund Selector Asia started running a comparison of two other similar Robo’s back in July 2017, they made a hypothetical $1m in each of the three Robo-Advisors featured below. The results in today’s article show what that $1m is now worth. Return results will be published monthly until August 2018.
Three portfolios for each Robo-Advisor are presented: Cautious, Balanced and Aggressive, however we have a few other options for each client’s requirements.
The purpose is to highlight the practical angle – how Robo-Advisors allocate and how they perform over the long-term, particularly when there is a downturn.
Note that the Robo-Advisors operate in different markets and offer different products. In FSA‘s presentation, they are not competing against each other, but against their own benchmarks.
Even though we may not be competing, I know where I would place my money!!
While there are several robo adviser available in the market Algebra offers a very different investment approach. Most Robo advisers simply buy a portfolio of ETF’s aimed at tracking markets in the cheapest possible way.
Algebra has a much more advanced level of technology that uses smart beta algorithms designed to out-perform markets but still carry a minimal cost of investment.
Algebra is our Robo-Advisor it was launched in July 2017, offers Sharia-compliant and conventional portfolios. This article features non-sharia portfolios.
The basis of Algebra’s portfolios is the Large Cap Master Select Gold Strategy, developed by Singapore-based Farringdon Asset Management. The portfolio consists of around 50 US stocks from the S&P 500 universe. They are selected based on analysis of portfolios of ten highly-rated active US equity fund managers. From each manager’s portfolio the algorithm chooses five stocks in which they are overweight. The three model portfolios presented here contain a different allocation of fixed income to manage the risk profile. The annual fee is 0.85%
Beijing-based Creditease Wealth Management launched Toumi RA, its robo-advisory platform in May 2016. It is currently offered to investors in mainland China. It offers offshore US dollar-denominated portfolios of global ETFs, holding equity and bond ETFs as well as gold and real estate. It has nine levels of risk for investors to choose from. FSA features three portfolios with the risk levels: 2 – second lowest, 5 – moderate and 8 – second highest. Creditease does not charge fees, so how do they survive? I am confused too.
Tuomi RA’s portfolios target a specific level of volatility. Asset allocation is adjusted if the volatility deviates from the target. Over the past two months, the conservative and the balanced portfolios have tilted towards fixed income. Bond ETFs now constitute 55% of the conservative portfolio, up from 44% on 1 October. The allocation to equities in the conservative portfolio was reduced to 30% from 37% and that to alternatives to 15% from 18%. The balanced portfolio now has 23% in fixed income, up from 19% two months ago. Its equity allocation has been reduced to 59% from 66% and 3% were added to alternatives. The asset allocations in the aggressive portfolio have not changed since 1 September.
In business since 2008, Marketriders is offered by the US-based brokerage Sogotrade. It was re-launched in March 2017 as a full service robo-advisory service. It offers US-based accounts, and its model portfolios consist of US-based ETFs. Marketriders charges an advisory management fee per year and no transaction fees.
Marketriders’ portfolios have not changed their asset allocation since 1 July.
www.algebra2u.com as a Digital Advice platform will take you through a series of goals and give you an indication on the levels of money that you will have to invest to reach these goals. These questions have been designed by fully qualified advisers within Labuan FSA’s remit.
This plan is then automatically incorporated in a risk weighted portfolio that will be managed over time for you to help you achieve your desired financial goals and the minimum initial investment is just $1000, there is no lock-in period, no term and this is the future.
If you would like to know more, just drop me an email or give me a call
All the best
CEO
+60 3 2026 0286
Stuart Yeomans 