Robo Advisor Wealthsimple, Blowing Past Betterment?

robo adviros wealthsimple portfolios

Wealthsimple portfolios can be built with 5-6 ETFs. They are exposed to between 0-60% bonds and 40-100% equities. There are low-risk, medium-risk, and high-risk portfolios available.

For the past 10 years, the Robo Advisor Wealthsimple Risk Level 08 has returned 9.29 with a standard deviation of 13.38. The dividend yield is 2.23%. The 30-year return is 9.59%. Year to date the Robo Advisor Wealthsimple Risk Level 08 has returned 7.60%%.

What is the return of the Wealthsimple portfolios?

Below you can see the performance and risk of the Wealthsimple portfolios. Note that we have used our data series to calculate the returns and they may differ from Wealthsimple’s calculations.

NameAsset class countYear to dateReturn in 202010 year returnCAGR since 1989 (%)Risk levelExpense ratio
Robo Advisor Wealthsimple Risk Level 1059.53%13.989.369.5130.08%
Robo Advisor Wealthsimple Risk Level 0958.57%14.229.339.5530.08%
Robo Advisor Wealthsimple Risk Level 0857.60%14.459.299.5920.09%
Robo Advisor Wealthsimple Risk Level 0766.92%
Robo Advisor Wealthsimple Risk Level 0665.55%13.818.749.2620.09%
Robo Advisor Wealthsimple Risk Level 0564.88%13.598.549.1310.09%
Robo Advisor Wealthsimple Risk Level 0463.51%
Robo Advisor Wealthsimple Risk Level 0363.05%
Robo Advisor Wealthsimple Risk Level 0262.79%10.377.177.7910.09%
Robo Advisor Wealthsimple Risk Level 0162.14%10.216.937.6110.09%

These are excellent performing portfolios. We especially like the allocation to minimum volatility stocks. Well done, Wealthsimple!

How do you build Wealthsimple portfolios with ETFs?

Below you can see how Robo Advisor Wealthsimple Risk Level 07 is built with ETFs.

23.30% Total US Market (VTI)
23.30% International Developed (VEA)
14.20% Emerging Markets (VWO)
14.20% Minimum Volatility Stocks (USMV)
21.60% Long Term Treasuries (TLT)
3.40% Intermediate-Term Munis (VTEB)

You can find many more portfolios further below.

Who is Wealthsimple?

Wealthsimple is a Canadian online investment management service focused on millennials. It is a hybrid robo-advisor because you can also get personal advice. As of August 2019, the firm holds over C$5 billion in assets under management.

Wealthsimple competes with many other robo advisor firms such as Betterment and Wealthfront.

Wealthsimple takes a slightly more lighthearted approach to investing and money management. It is in stark contrast to Wealthfront and Betterment. Wealthsimple targets specifically Millenials.

Description of robo-advisor Wealthsimple portfolios

The Wealthsimple investment portfolios are exciting.

They use a minimum volatility fund to gain exposure to emerging markets and the world stock market. We don’t have enough data to backtest their minimum volatility emerging market portion, so we have swapped it with a standard emerging market time series.

The portfolios have a portion allocated to muni bonds, which are tax-efficient.

You could replace the munis with a standard aggregate bond fund if you hold them in a tax-sheltered account.

They also have allocations to TIPS (treasury inflation-protected security) with a duration of 15+ years. We don’t have data on that, so we use long treasuries as a proxy. TIPS are a U.S. Treasury bond designed to help investors protect against inflation

Building the portfolio(s)

Below you can see the asset allocations for the portfolio(s). You can also see if the portfolio(s) has a socially responsible investing (ESG) variant portfolio. You can read more about socially responsible investing (ESG) investment portfolios in this post.
To build the portfolio(s) yourself, go to our best in class ETF page to see which ETF you should choose for a particular asset class. There you can also see which socially responsible investing ESG ETFs you should select.

Asset Allocation for robo-advisor Wealthsimple portfolios

NameTotal US MarketInternational DevelopedEmerging MarketsMinimum Volatility StocksLong Term TreasuriesIntermediate Term Munis
Robo Advisor Wealthsimple Risk Level 1028.10%28.10%16.90%16.90%10.00%
Robo Advisor Wealthsimple Risk Level 0926.60%26.60%15.90%15.90%15.00%
Robo Advisor Wealthsimple Risk Level 08PremiumPremiumPremiumPremiumPremium
Robo Advisor Wealthsimple Risk Level 0723.30%23.30%14.20%14.20%21.60%3.40%
Robo Advisor Wealthsimple Risk Level 0620.00%20.00%12.50%12.50%25.00%10.00%
Robo Advisor Wealthsimple Risk Level 0311.70%11.70%6.70%10.00%23.20%36.70%
Robo Advisor Wealthsimple Risk Level 0210.00%10.00%5.00%10.00%20.00%45.00%
Robo Advisor Wealthsimple Risk Level 018.60%8.60%4.30%8.60%21.60%48.30%

How we select the right ETFs

There are a lot of ETFs out there. Most of them can be discarded because:

  • They are too expensive
  • They hold too few assets and are therefore too illiquid
  • They do not meet the criteria for representing the asset class they are supposed to mirror.

We have carefully selected an ETF for each asset class that the portfolios on use. If you want to read more about our selection process and see what we consider the best ETFs please visit our article What Is The Best ETF?

If you are a European investor you need to buy European ETFs. We list 47 best ETFs in our article What Are The Best ETFs For European Investors? (Here Is 47).

As of 2020 we also track socially responsible investing ESG portfolios. Socially responsible investing (ESG) portfolios prioritize investing that puts an emphasis on environmental, social and corporate governance issues.

You can find the socially responsible investing ESG ETFs in the same article.

Resources for the robo-advisor Wealthsimple portfolios

Check out the Wealthsimple YouTube channel, and they have some funny short clips!

Suggestions for your next steps

Finding the correct portfolio is hard. Maintaining your portfolio is also daunting. If you are still in doubt about which portfolio to choose, we suggest you read our article How To Invest Money: 5 Simple Steps That Work For Anyone

If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful. Rebalancing your portfolio lowers your risk and may even provide higher returns in the long run.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool

Related questions

Is Wealthsimple a good investment?

Yes it is. It is a very good choice when you want a hand-off approach to investing.

Can you make money with Wealthsimple?

Yes. When you invest with Wealthsimple they will invest your money for you in stocks and bonds. Stocks and bonds are the centerpiece of investing and will with great probability make you more money over time.

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