This page details robo advisor portfolios and their performance. Here you will find asset allocation and performance for all the robo advisor portfolios that portfolioeinstein track.
Robo Advisor Performance of Investment Portfolios
- 1 Robo Advisor Performance of Investment Portfolios
- 2 What is a robo advisor?
- 3 What’s so special about robo advisors?
- 4 Robo advisor companies
- 5 Here are the robo advisor performance in detail
- 6 Sample portfolio of Betterment and Wealthfront
- 7 Sample portfolio Wealthfront
- 8 Sample portfolio WiseBanyan
- 9 Sample portfolio WealthSimple
- 10 I need your help – can you help?
What is a robo advisor?
A robo advisor is a portfolio that is controlled by a preset algorithm. That sounds more confusing than it really is. Said in another way: A robo advisor investment portfolio has an asset allocation that is being monitored by a computer. The computer rebalances the portfolios automatically when the asset allocation changes from the planned asset allocation.
The asset allocation that the computer reacts to, has been put in place by a team of human professionals. They have told the computer: “make sure that you always maintain a 60% stock allocation and a 40% bond allocation”. The computer beeps and acknowledges. This is not different than if you told a human investment advisor to do the same. The big difference is cost. Because the capacity of the human advisor is limited by the time the advisor charges a lot more than the computer which has an unlimited capacity at its disposal.
What’s so special about robo advisors?
The robo advisors have been dated to around 2008 with the launch of Betterment. Since then many more has surfaced. In addition, the services the robo advisors offer has also expanded. Now they include:
- Profiling your risk levels
- Recommending an investment portfolio suited for your risk
- Automatic rebalancing
- Tax-harvesting (selling losing positions and buying them again shortly thereafter to minimize capital gains tax)
- A well-diversified investment portfolio
- Very easy to deposit funds and have them invested
- A beautiful platform from which to follow your investing portfolio.
Robo advisors charge a fee for doing all of this. You can do all of the above yourself, however, thereby decreasing your expenses and increasing your returns. At portfolioeinstein.com you can see exactly what is under the hood of the robo advisors portfolios. You can see how well they have done and benchmark them against other portfolios. Portfolioeinstein.com is tracking 4 robo advisor performance investment portfolios: Betterment and WealthFront.,WiseBanyan and WealthSimple
Robo advisor companies
We track the robo advisor performance of the following robo advisors:
Here are the robo advisor performance in detail
|Portfolio Name||Number of asset classes||1 year return 2018||YTD (September 2019)||10 year return||Drawdown||Risk Level||Market Correlation||Dollar Value|
|S&P 500 (Benchmark)||1||-4.52%||20.36%||12.97%||-37.71%||5 - very high risk||0.99||$167,045.76|
|Robo Advisor Betterment 100||6||-10.24%||14.55%||10.45%||-40.13%||5 - very high risk||0.92||$128,734.87|
|Robo Advisor Betterment 80||10||-8.05%||13.29%||9.20%||-31.68%||4 - high risk||0.92||$117,253.29|
|Robo Advisor Betterment 60||10||-5.79%||12.09%||7.93%||-23.25%||3 - medium risk||0.91||$102,835.26|
|Robo Advisor Betterment 40||11||-3.48%||10.54%||6.45%||-14.52%||2 - low risk||0.87||$84,982.92|
|Robo Advisor Wealthfront 100||7||-9.49%||15.27%||9.52%||-39.45%||5 - very high risk||0.8||$141,384.10|
|Robo Advisor Wealthfront 80||7||-8.01%||15.98%||9.89%||-36.03%||5 - very high risk||0.88||$130,253.32|
|Robo Advisor Wealthfront 60||7||-6.80%||15.67%||9.40%||-31.03%||4 - high risk||0.9||$121,214.80|
|Robo Advisor Wealthfront 40||7||-5.45%||15.34%||8.96%||-25.94%||3 - medium risk||0.91||$112,287.77|
|Robo Advisor Betterment 90||11||-9.24%||13.88%||9.81%||-35.97%||5 - very high risk||0.92||$123,249.30|
|Robo Advisor Betterment 70||10||-7.18%||12.68%||8.54%||-27.45%||4 - high risk||0.92||$110,497.55|
|Robo Advisor Betterment 50||10||-5.13%||11.51%||7.23%||-19.01%||2 - low risk||0.89||$95,337.73|
|Robo Advisor Betterment 30||12||-2.70%||8.72%||5.22%||-9.88%||1 - very low risk||0.83||$71,114.48|
|Robo Advisor Betterment 20||12||-1.38%||6.89%||4.02%||-5.10%||1 - very low risk||0.74||$58,695.62|
|Robo Advisor Betterment 10||12||-0.05%||5.05%||2.79%||-0.82%||1 - very low risk||0.49||$47,911.68|
|Robo Advisor Betterment 0||2||1.26%||3.23%||1.56%||-0.48%||1 - very low risk||0.05||$38,762.57|
|Robo Advisor Wealthsimple Portfolio Conservative||7||-2.50%||11.25%||5.68%||-6.18%||1 - very low risk||0.76||$83,471.98|
|Robo Advisor Wealthsimple Portfolio Balanced||9||-6.11%||14.34%||8.39%||-24.58%||3 - medium risk||0.95||$109,381.53|
|Robo Advisor Wealthsimple Portfolio Growth||9||-8.68%||15.42%||9.66%||-36.24%||5 - very high risk||0.96||$121,340.42|
|Robo Advisor WiseBanyan 90% stocks||9||-8.17%||15.79%||10.10%||-35.86%||5 - very high risk||0.95||$108,040.45|
|Robo Advisor WiseBanyan 80% stocks||9||-7.34%||15.19%||9.61%||-32.22%||4 - high risk||0.95||$106,400.63|
|Robo Advisor WiseBanyan 70% stocks||9||-6.47%||14.52%||9.05%||-28.37%||4 - high risk||0.95||$103,035.68|
|Robo Advisor WiseBanyan 60% stocks||9||-5.62%||13.87%||8.52%||-24.77%||3 - medium risk||0.94||$99,111.63|
|Robo Advisor WiseBanyan 50% stocks||9||-4.76%||13.13%||7.93%||-20.92%||3 - medium risk||0.92||$93,863.28|
|Robo Advisor WiseBanyan 40% stocks||9||-3.93%||12.34%||7.30%||-16.94%||2 - low risk||0.89||$88,247.02|
|Robo Advisor WiseBanyan 30% stocks||9||-3.09%||11.49%||6.58%||-12.93%||2 - low risk||0.82||$81,568.12|
|Robo Advisor WiseBanyan 20% stocks||9||-2.06%||10.43%||5.73%||-8.80%||1 - very low risk||0.69||$72,861.34|
|Robo Advisor WiseBanyan 13% stocks||9||-0.98%||8.61%||4.55%||-4.70%||1 - very low risk||0.54||$61,449.77|
Sample portfolio of Betterment and Wealthfront
Robo advisor Betterment 60
- 19.80% US Total Stock Market (VTI)
- 5.30% US Large Cap Value (VTV)
- 4.30% US Mid Cap Value (JKI)
- 3.60% US Small Cap Value (VIOV)
- 16.70% International Developed Blend (VEA)
- 10.30% Emerging Markets (VWO)
- 12.30% Total US Bond Market (BND)
- 5.00% TIPS (VTIP)
- 14.70% Non-US Bonds (BNDX)
- 8.00% Emerging Market Bonds (EMB / VWOB)
Betterment is probably the most well-known fin-tech company. It started the robo advisor phenomenon. They have 13 Billion assets under management as per 2017. Their portfolios are well diversified and are some of the few that have emerging market bonds as an asset class. If you want to gain a greater insight into the robo advisory phenomenon I recommend picking up FinTech Innovation: From Robo-Advisors to Goal-Based Investing and Gamification.
Sample portfolio Wealthfront
Robo advisor Wealthfront 60
- 19.00% US Total Stock Market (VTI)
- 15.00% US Large Cap Value (VTV)
- 11.00% REITs (VNQ)
- 16.00% International Developed Blend (VEA)
- 12.00% Emerging Markets (VWO)
- 19.00% Corporate Bonds (LQD)
- 8.00% Emerging Market Bonds (EMB / VWOB)
The robo advisory firm came late to the robo advisory party but have enjoyed an immense amount of success. One of the giant of the investment world, Burton Malkiel, author of A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, is the Chief Investment Officer at Wealthfront. Charles Ellis, another investing giant, and author of Winning the Loser’s Game, Timeless Strategies for Successful Investing is on the advisory board. If you want to gain a greater insight into the robo advisory phenomenon I recommend picking up FinTech Innovation: From Robo-Advisors to Goal-Based Investing and Gamification. Asset allocation for all other robo advisor portfolios is here.
Sample portfolio WiseBanyan
Robo Advisor WiseBanyan 70% stocks
- 40.30% US Total Stock Market (VTI)
- 3.10% REITs (Real Estate) (VNQ)
- 21.90% Int. Developed Blend (VEA)
- 5.00% Emerging Markets (VWO)
- 7.90% Intermediate-Term Treasury (VGIT)
- 8.80% Corporate Bonds (LQD)
- 3.40% Short-Term Investment Grade (VCSH)
- 3.30% High Yield Corporate Bonds (HYG)
- 6.30% TIPS (VTIP)
WiseBanyan is a relative newcomer to the robo advisor space. Established in 2013. They are the only (so far) fee-based robo advisor. This means you don’t pay anything to have your money managed. That’s pretty amazing. Their portfolios are simple and easy to understand without any special asset classes in contrast to Betterment and Wealthfront. Wealthfront, for example, uses emerging market bonds. For a comparison of robo advisors, you should check out our overview Robo Advisor Performance.
Sample portfolio WealthSimple
Robo Advisor WealthSimple Portfolio Balanced
- 30.57% US Total Stock Market (VTI)
- 4.59% Emerging Markets (VWO)
- 3.86% Pacific Stocks (VPL)
- 17.90% European Stocks (VGK)
- 11.40% Intermediate-Term Treasury (VGIT)
- 0.99% Cash (money market fund) (BIL)
- 22.35% Corporate Bonds (LQD)
- 4.17% High Dividend Yield (VYM)
- 4.17% Emerging Market Bonds (VWOB)
WealthSimple is a UK based robo advisor with £1.5 Billion under management. Their portfolio is heavily over weighted towards UK equites and UK gilts (bonds). I have no data on UK gilt (government nor corporate) so the portfolio on site is what I call a “US Edition”. I swapped the asset allocation around so all UK stocks and bonds now are US stocks and bonds. Then I swapped WealthSimple’s allocation to US stocks to European stocks. It’s not perfect and will be remedied in the future when I get return data for UK gilts – I already have for UK stocks.
I need your help – can you help?
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