Stashaway – Is roboinvestor able to make money for you?

748 Views

I’m always a little hesitant and unconfident when it comes to financial blogging as this is not my forte and I am still in the process of becoming more financially aware and conscious about my assets. Thus, it would be better for me to be upfront about my beginner’s expertise in order not to mislead anyone who is reading this post.

Today, I will be sharing my experience with StashAway, a robo-investing platform that aims and hopes to ‘beat the market’ and deliver returns (interests) which will hopefully be more than what the bank can give you.

There are many ways we can grow our money – putting it in a bank, fixed deposits, investment-linked insurance policies, investing in stocks, index, and funds, buying gold, etc. I always believe that risk and rewards are correlated whereby the more risk you take, the more rewards you can receive and it also means.. the more rewards you can lose. I do know of many risk-averse people who do not want to invest because they are just lazy and prefer having more liquidity on their end. However, I would like to share that StashAway is pretty liquid and should you require to cash out your money, it can be done within 2 to 3 working days (which I feel is rather reasonable).

Before I started on this robo journey, I had my doubts about how it works and.. can an AI robot really make money for me?

Traditionally (or not too long ago), we buy funds (usually from banks) where there is a portfolio/investment manager (a physical human) or team making the decisions to buy/sell a certain stock/bond/fund/index etc. Today, the functions can be replicated using a robot that is skilled enough to look through tens and thousands of data, create algorithms, and invent strategies that can fit all sorts of risk appetites.

I have started using StashAway about 4 months ago as my brother wanted to refer me in order to earn the 6-months management fee waiver (up to $10k). The best part of this referral was that the minimum investment amount was just $1 (would you even consider that a minimum?), which is very attainable. In the post below, I will share the real numbers of my investments and you’ll analyze for yourself if the returns are worthed it.

Portfolio 1 – Income

Option Selected: Earn income and returns in SGD – deliver reliable income;
Projected 3.75% returns per annum and recommended to hold for 3 to 5 years
StashAway Risk Index: 12%
*Opted for reinvesting profits

  • Asia High Yield Corporate Bonds (QL3) – 10.125%
  • Nikko AM SGD Investment Grade Corporate Bond ETF (MBH) – 33.78%
  • Nikko AM Straits Times Index ETF (G3B) – 9.84%
  • Nikko AM-Straits Trading Asia ex Japan REIT ETF (CFA) – 17.54%
  • Lion-Phillip S-REIT ETF (CLR) – 17.69%
  • ABF Singapore Bond Index ETF (A35) – 9.93%

Amount Invested: $3,000
Date of Deposit:
31st March 2020
Date of Withdrawal: 27 July 2020

Total no. of days:  119 days
Amount Withdrawn: $3,309.62

Simple Return (per annum): 31.65%

Portfolio 2 – Invest (USD)

Option Selected: Core – reliable, long-term wealth.
StashAway Risk Index: 14%
*Opted for reinvesting profits

  • Health Care Select Sector SPDR Fund (XLV) – 15.25%
  • iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) – 20.16%
  • iShares International Treasury Bond ETF (IGOV) – 6.03%
  • KraneShares CSI China Internet ETF (KWEB) – 8.02%
  • SPDR Gold Trust (GLD) – 20.1%
  • Consumer Discretionary Select Sector SPDR Fund (XLY) – 10.16%
  • Vanguard Total International Bond ETF (BNDX) – 20.19%

Note: Funds were converted to USD at FX Rate of 0.7171

Amount Invested: $3,000
Date of Deposit:
9 Jun 2020
Date of Withdrawal: 27 July 2020

Total no. of days:  49 days
Amount Withdrawn: $3,139.86

Simple Return (per annum):  34.72%

Disclaimers

For the purpose of writing this article, I have cashed out my portfolios and I did not have to pay the portfolio management fee of 0.8% (up to first $25k) as I had a referral promotion which gave me free portfolio management fees for up to 6 months (up to $10k). The fees would have been about $48/year based on my $6k investment.

I know it is incorrect for me to showcase my >30% returns as I started my first investment on 31 March and the stock market crashed on 23 March. Thus, I would like to show the S&P 500 Chart below to ‘normalize’ the earnings. The S&P 500 returns (using the same timeframe) would have been 77% (Portfolio 1) and 7.48% (Portfolio 2). It is not an apple to apple comparison as Portfolio 1 has no exposure to the US Market and Portfolio 2 has minimal exposure (<25%) to the US Market.

I have a friend that has invested in StashAway (monthly contribution, risk index 20%) for 29 months since March 2018 ($100 for first 10 months; $200 for next 12 months and $300 for next 7 months). The amount has accumulated to $6,225.84 and the time-weighted return is indicated as 25.21% and the money-weighted return is 34.9%. In simple computation, her accumulated monthly contributions adding up to $5,500 has grown to $6,225.84 over the past 29 months.

Parting Thoughts

While it is too early (for me and my examples) to come to a conclusion for the effectiveness of robo-investors, the experience I had thus far had been straightforward and positive. Another strong reason as to why I chose this instead of a longer-term investment product was because I prefer having liquidity for all my assets. The ability to cash out within 2-3 days is a huge bonus for me and I’m comfortable with the rate of returns that I’m getting.

At the end of the day, I’m just proposing a diversification option for people who wants to grow their cash and yet they are not comfortable with stock-picking or index/etf buying. However, I would like to emphasize that it is not capital guaranteed and the stocks/bonds/funds purchased will not be tagged to your name (which means that apart from dividends, you do not get to exercise any shareholders rights).

Apart from StashAway, there are many other options for Robo-advisors including Syfe (cheapest fees), endowUS, kristal.ai and even banks like OCBC and DBS have this service too. If you would like to read further, I recommend checking out the Seedly community.

If you’re keen to try StashAway, you can use my referral link and enjoy 6 months free management fees of up to $10,000!

Leave a Comment

Your email address will not be published. Required fields are marked *