MARTINSVILLE, NJ / ACCESSWIRE / August 10, 2020 / According to the 16th Edition of the Robo Report™ and 5th Edition of The Robo Ranking™ for the second quarter of 2020, published by Backend Benchmarking, robo advisors have performed well for investors during the recent market volatility caused by COVID-19.
After a very difficult first quarter, robo advisors rebounded with the market in the second quarter. The average portfolio returned 19.66% on its equity holdings, and 4.15% on its fixed-income holdings in the second quarter.
This edition of the Robo Report, which also contains the Robo Ranking, is the most comprehensive analysis of digital advice products. The Ranking includes both qualitative factors, such as access to advisors and financial planning features, as well as the performance figures for accounts held at each provider.
"While COVID-19 has caused widespread disruption in the markets, economies, and everyone's lives, digital advice providers were well positioned to transfer to remote work, as they are natively built for digital communication with clients. Early reports show a surge in account openings at digital advice providers during the volatile first half of the year," said Ken Schapiro, Backend Benchmarking CEO.
This quarter, the Report dove deeper into its SRI portfolios. Using Morningstar's Portfolio Sustainability Score, it looked at the weighted average scores of the equities in each of its SRI portfolios and then compared that rating to the non-SRI portfolio at the same provider.
The Ranking grades robo advisors across more than 45 specific metrics and is the only examination that includes real and reliable performance data. It scores each robo on various high-level categories, such as features, financial planning, customer experience, access to live advisors, transparency and conflicts of interest, size and tenure, account minimums, costs, and performance. The performance score is partly based on Backend Benchmarking's innovative method to compare globally diversified portfolios called Normalized Benchmarking.
- SigFig's long-term performance shines, making it the top 4-year equity and fixed-income performer.
- SigFig wins Best Overall Robo, followed by TD Ameritrade and Fidelity Go.
- SigFig wins Best Robo for Performance at a Low Cost, Axos Invest is runner-up (interview with CEO, Greg Garrabrants within Report.)
- Vanguard Personal Advisor Services wins Best Robo for Complex Financial Planning Needs, Personal Capital is a close second.
- Betterment wins Best Robo for First-time Investors, Wealthsimple is runner-up.
- Wealthfront wins Best Robo for Digital Financial Planning, Personal Capital is runner-up.
- One active manager, Titan Invest, outperformed its benchmark by a wide margin.
- Seven of eight SRI portfolios with a 1-year track record outperformed their passive counterpart at the same provider, while all five with a 2-year track record outperformed.
"SigFig won because of its record of strong performance, low fees, and access to advisors at lower asset levels than many other providers. TD and Personal Capital received a perfect score in the financial planning category. Fidelity Go, after being ranked the best robo three consecutive times, has dropped to third," said David Goldstone, Head of Research.
"Many of our top robo advisors rebalanced during the dip from bonds to stocks attributing to strong performance," he added.
"For those seeking a robo advisor with a strong performance track record, Axos is a quality choice. Investors with complex financial planning needs benefit from the ability to work with a live planner and should consider robo advisors with access to human advisors," said Mr. Goldstone.
Performance is partly based on Backend Benchmarking's innovative method to compare globally diversified portfolios called Normalized Benchmarking. A methodology of Normalized Benchmarking, details of how they create the scores and ranking and the Robo Report™ and the Robo Ranking™ are all available for free at https://www.backendbenchmarking.com/the-robo-report/. Follow the Report on Twitter @theroboreport.
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SOURCE: Backend Benchmarking