ROI from roboadvisors like True Wealth

Hello! This is my first post here. Totally new to investing, have been following this community for some time now. I was introduced to True Wealth from a post in this forum and have decided to go for it. Had a couple of questions here:

  • Does anyone care to share typical ROIs (> 5 yrs investing) from them? I understand it will depend on your risk level and portfolio.

  • TW offers two banks—Saxo Bank and Basellandschaftliche Kantonalbank—to bank with. Does anyone know of relative pros and cons? Saxo Bank seems to me a purely investment bank. The other difference I found was the amount of deposit protection, it is up top CHF100k for Saxo Bank and apparently unlimited for Basellandschaftliche Kantonalbank.

In 2015 i was curious about True Wealth and opend a Test Account. I trust them that the test account is idendical as I would invest real money. So I have data from 2015 till now.

From 2015 till end of dec. 2018 the account was on the “True Wealth Optimized Allocation” with:

Cash 2%
Bonds 4%
Real Estate Investment Trusts 8%
Natural Resources 13%
Equities 73%

This is the highest risk I could get with True Wealth according to their analysis.

From end dec. 2018 till now I discovered that you can choose your own allocation which I did. So from dec. 2018 I have now this portfolio:

Cash 3%
Bonds 0%
Real Estate Investment Trusts 0%
Natural Resources 0%
Equities 97%

I can’t get higher with the stock percentage.

My returns are the following:

From 05.04.2015 till 30.12.2018 with the above mentioned “True Wealth Optimized Allocation”

I got this result:

Not so great compared to the MSCI ACWI (Is similar to VT)

And here are the details:

From dec. 2018 till now I’ve switcht to all stock portfolio. It should be better, right? Yes, it is better, but not so as I expected:

My return since inception is 14.89% (3.23% p.a.)

My conclusion: True Wealth seems to be ok if you put everything into stocks, then it performs well. The main selling point of True Wealth, the automatic rebalancing of the standardmix with Stocks, Bonds, Real Estate and Natural Resources didn’t pay of, at least for me.

I’ve run this test account to see how it performs, and for me it shows that it isn’t worth the 0.63% TER.

VT is cheaper and has simalar results as True Wealth.

1 Like

I dont understand how this has anything to do with TW. The return is based on the investments you pick, it has nothing to do with TW. It would be the same as asking “what is the return when buying VT on IB or on swissquote?”. It should be very, very similar.

True Wealth is a Robo-Advisor, they pick the funds for you, you can’t buy or sell by yourself, you can only say: “mhhh, I feel I like to invest with a high risk” or “oh no, in 2 years there will be a crash, I like a conservative approach” and then they do everything for you.

It’s similar to VIAC, where you can choos the “Global 100” or the “Global 40” strategy.

On my pictures you can see the little orange dots. These are buy/sell activities done by TW, not by me. My only imput over these 4 year was a change in the strategy.

Hey, thanks for the analysis. For some reason I cannot get the performance tool to work for me in a virtual acc.

I am actually a bit surprised at the low performance but I guess it depends on your equity mix. By default the portfolio is dominated by Swiss equities, right?

Second, it is weird that the portfolio rebalancing does not happen while the performance diverges from MSCI-ACWI and that could explain the difference in the long run.

Roboadvisers’ job is NOT to beat the benchmark and it is unreasonable to expect that, especially in a short term.

If all you want is the performance of S&P 500 or MSCI World or VT, great - just go and buy exactly that and you’ll get the performance that you seek for a far lower total cost.

The point in investing in stuff like commodies or RE is that they are (hopefully) low/negatively correlated with stocks when it matters, and so should pay off in a recession, but not necessarily when the market’s up. You would see whether their strategy is effective or not only on longer timescale over 1-2 market cycles

Another big advantage of roboadvisors at least in the US is in automatic tax loss tracking and harvesting, this alone could offset their fees. But this is totally not applicable for CH due to lack of CGT taxation.

3 Likes

One advantage of robos and allocation-ETFs alike (eg CBVSO, AOR) vs doing it yourself is the additional gains a good rebalancing brings - besides obviously the automatic rebalancing of a somewhat complex portfolio.

However I always wondered how much that’s worth in terms of additional TER compared to say (half-)yearly manual rebalancing

I was able to hand pick the funds I wanted both with TW and with VIAC - out of the list of funds the have available, obviously.

With VIAC is pretty simple, you pick “custom allocation” and select the funds you want.
With TW you can drill down the single categories of your allocation (for example “bonds”), this shows you the sub-categories (bond ch, bond international, etc). If you drill down more you get to see the single bonds/etfs/stocks whatever for that category and you can decide the allocation in % for each single one. If you want to DCA it gets a little bit more complicated but it’s possible.
I built my portfolio that way.

By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, vous confirmez avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/