Titan Dominates the Year, While SigFig Is Top 4-Year Performer
MARTINSVILLE, NJ / ACCESSWIRE / November 3, 2020 / Backend Benchmarking has published its 17th edition of The Robo Report™ which monitors well-known Robo advisors and covers the 3rd quarter of 2020, announced Ken Schapiro, Publisher, and David Goldstone, Head of Research.
The Report has been published since 2016 and now tracks 88 accounts at 41 different digital advice providers. It also includes an Interview with Chris Costello, CEO, and Co-Founder of blooom. To receive a free copy of The Robo ReportTM, go to BackendBenchmarking.com
The following is a release of the Company's Findings:
Titan Dominates the Year:
Titan's goal is to bring exceptional performance to the masses with a hedge fund-like approach. So far, it is delivering on that promise. It does so by holding individual stocks and making active trades. This is in direct opposition to the strategy of most robos, which are passively managed and hold index funds. Once again, it is the top performer overall periods for which our account has been open. In the third quarter. It returned 11.76%, bringing its year-to-date returns to 24.62%. It is an all-equity portfolio, and when we compare it to the average robo's equity returns, we see that it outperformed by 30.65% over the 1-year period.
4-Year Performance Highlights: SigFig, Fidelity Go, and Schwab
SigFig is the top performer over the 4-year period. It owes its success to domestic large-cap exposure, investment-grade Treasury and corporate bonds, and a low total cost. Fidelity Go captured the top 4-year equity performance. Schwab had the best fixed-income performance over the same period.
SRI Continues Its Outperformance:
Socially Responsible Investing (SRI) performance remains strong. For every pair of SRI and standard robos, the SRI portfolios had better equity performance over the 2-year period despite higher fees for the underlying funds. Year to date, the results were mixed, but the advantage still went to the SRI options. The SRI portfolios tend to have more exposure to growth stocks, which we believe are driving their outperformance.
This is good news as SRI, and environmental, social, and governance investing (ESG) grow in popularity across the industry. Betterment recently introduced two new SRI options and shared that its SRI option is now "on equal footing" with its standard portfolio in terms of assets under management.
Robo Adoption Continues to Rise:
According to a recent study by Hearts and Wallets, Robo advisor adoption is up to 8% in the United States. While the number is not groundbreaking, it is impressive for a service that barely existed 10 years ago. Providers see Robo advice as a new way to engage with clients early on and then ramp up to full-service offerings as their wealth grows. One way they have been doing this is offering free digital financial planning tools to complement their existing low-cost Robo advisor.
M1 and Wealthsimple Raise Money:
COVID-19 has not slowed down funding into digital advice firms. Wealthsimple raised a staggering $114 million, and M1 Finance raised an impressive $45 million. Both firms have witnessed tremendous growth of assets and users on their platforms.
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