StashAway’s Robo-Advisor Technology: How it Helps Investors Make Better Decisions

If you're an investor in Singapore, there's a good chance you've caught wind of the buzz around robo advisors. These digital game-changers are swiftly becoming the go-to for savvy individuals eager to expand their wealth, sidestepping the need for a traditional financial advisor. 

Stripping away the complexity of traditional finance, they're offering a streamlined, intelligent approach to wealth growth. And at the forefront of this game-changing shift? StashAway, the powerhouse robo advisor, is not just challenging the investment norm – it's redefining it, securing its position as Singapore's premier robo advisor.

Introduction to StashAway and Robo-Advisors

As a Singapore-based fintech firm, StashAway is a digital wealth manager that leverages the power of robo-advisor technology to provide its users with personalised, goal-oriented investment solutions. It's not just the buzz of the local financial scene; StashAway is making waves as a globally recognised robo investor, operating in multiple countries, including Malaysia, UAE, Hong Kong, and Thailand.

StashAway's strength lies in its innovative use of robo-advisor technology. But what exactly is a robo-advisor? Simply put, a robo-advisor is a digital platform that automates investment portfolio management. The objective is to offer investors data-driven financial planning services with minimal human intervention. It's a sophisticated fusion of financial knowledge and technology designed to deliver tailored financial advice and effective investment strategies at a much lower cost.

How StashAway’s Robo-Advisor Technology Works

StashAway’s robo-advisor technology can be explained in the following steps:

1. Information gathering:

Upon creating an account, users answer a series of questions regarding their financial situation and future investment goals. This information allows StashAway to assess the risk tolerance and expectations of its users, which is crucial for crafting an investment strategy tailored to their specific needs.

2. Personalised portfolio creation:

Based on the user's financial information and investment goals, StashAway's robo-advisor suggests a portfolio, allocating investments across different asset classes like stocks, bonds, and commodities. This diversification is designed to balance risk and return based on the user's individual profile.

3. Economic Regime-Based Asset Allocation (ERAA):

StashAway employs the ERAA framework, which uses macroeconomic data to detect changes in the economic environment. The system then adjusts the portfolio’s asset allocation in response to these changes. This proactive approach aims to protect the portfolio from high volatility and take advantage of growth opportunities when they arise.

4. Passive investment strategy:

StashAway employs a passive investment strategy, which essentially means it attempts to mirror the performance of the market, rather than beat it. This contrasts with active investing, where the goal is to outperform the market.

This is achieved by investing in Exchange Traded Funds (ETFs) and Index Funds. Both are types of investment funds that aim to track and replicate the performance of a specific market index or sectors, such as the S&P 500 or US tech sector.

5. Constant monitoring and rebalancing:

StashAway’s robo-advisor continuously monitors the market and the user's portfolio. If market changes cause a portfolio to deviate from its risk profile or target asset allocation, the system will automatically rebalance it. This ensures that the portfolio continues to align with the user’s investment goals and risk tolerance level. There is no additional cost to the client for this monitoring and rebalancing.

6. Robo-trading functionality:

StashAway's innovation doesn't stop at portfolio management. Their robo-trading functionality allows the platform to execute trades quickly and efficiently, taking advantage of real-time market changes to optimise investor returns. This technology enables StashAway to automate portfolio rebalancing, ensuring your investments stay aligned with your financial goals even amidst market volatility.

The result is a smarter, personalised investment portfolio designed to meet your financial objectives effectively and efficiently at a much lower cost than the traditional investment industry.

What can I invest in with StashAway’s robo advisor? 

StashAway primarily invests in Exchange Traded Funds (ETFs) chosen for their high trading volume, deep liquidity, and low expense fees. These ETFs offer broad-based diversification, enabling a passive investment strategy that doesn't require constant monitoring or active management from the investor's side. 

StashAway offers a range of portfolio options to cater to varying investment needs:

1. General and goal-based portfolios: These are tailored according to your specific financial goals, such as retirement planning or saving for a large purchase.
2. Singapore-focused income portfolio: This portfolio is designed to generate a regular income stream and is particularly suitable for investors seeking passive income.
3. Cash management portfolios:  StashAway Simple™ and StashAway Simple™ Plus. These portfolios are designed to provide higher returns than a typical savings account without exposing your capital to significant risk.

What are the minimum deposit and management fees? 

In the spirit of accessibility, there is no minimum deposit or investment amount required if investing in Singapore dollars. For those wishing to deposit in US dollars, however, a minimum deposit of US$10,000 is needed.

The fee structure at StashAway is straightforward and competitive. Fees are calculated based on the amount you invest:

• First $25,000: 0.8%
• Additional amount above $25,000 to $50,000: 0.7%
• Additional amount above $50,000 to $100,000: 0.6%
• Additional amount above $100,000 to $250,000: 0.5%
• Additional amount above $250,000 to $500,000: 0.4%
• Additional amount above $500,000 to $1,000,000: 0.3%
• Additional amount above $1,000,000: 0.2%

For example, if you have invested $100,000 with StashAway, your annual management fee would be $675 ($25,000 x 0.8% + $25,000 x 0.7% + $50,000 x 0.6%). It's crucial to note that these fees stack, meaning the management fee for the first $25,000 is always charged at 0.8%, regardless of your total investment amount.

This fee structure not only provides transparency but also rewards increased investments with lower fees, making StashAway an appealing choice for both retail and high-net-worth investors.

Benefits of StashAway’s Robo-Advisor Technology

The advantages of using StashAway’s robo-advisor technology for your investment needs are manifold. Here are some key benefits:

• Diversification: The robo-advisor constructs a diversified portfolio across various asset classes and geographical regions, reducing risk and potentially improving returns.
• Risk management: The algorithm is designed to manage risk effectively, regularly rebalancing your portfolio to maintain your desired level of risk and adjusting it according to market conditions.
• Low fees: StashAway, like most robo-advisors, operates with lower overheads than traditional investment management firms. These cost savings are passed on to investors in the form of lower fees.
• Time-saving: With robo-investing, the time-consuming process of researching and selecting investments, rebalancing, and adjusting for market changes is taken care of for you.

Frequently Asked Questions About Investing With Robo-Advisors

Investors often have questions about using a robo-advisor, so let's address some common queries:

How much control do investors have over their portfolios?

Even though StashAway manages your portfolio using its robo-advisor technology, you maintain control over your investment strategy. You set your investment goals, risk tolerance, and timeline and can adjust these at any time.

Can investors choose their own investments?

While robo-advisors take care of the asset selection and management, most platforms, including StashAway, do allow for some level of customisation. You can usually adjust the asset allocation or choose from various pre-set portfolios that align with different investment goals and risk levels.

How are fees calculated?

Robo advisor fees are typically based on a percentage of your invested assets. With StashAway, fees range from 0.2% to 0.8% per annum depending on the total amount invested, which is much lower than traditional financial advisors as they also have entry and exit fees.

Start Your Investment Journey With StashAway

Robo investing with StashAway provides a dynamic and efficient way for investors to grow their wealth. StashAway, one of the best robo investors in Singapore, leverages sophisticated robo-advisor technology to provide personalised, data-driven investment strategies. Learn how to invest in Singapore's dynamic market through our personalised strategies and intuitive robo-advisor technology, as well as how to invest in these ETFs as a part of your balanced portfolio. 

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