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We go through the Roboadvisor portfolios by Wealthsimple in this article. In the article, you can find the description of the Ellevest portfolios. You can also find the performance of the portfolios and you can find out how you can implement them yourself.
Article Contents
- Robo Advisor Wealthsimple, blowing past Betterment?
- Description of robo-advisor Wealthsimple portfolios
- Performance of robo-advisor Wealthsimple portfolios
- Building the portfolio(s)
- Asset Allocation for robo-advisor Wealthsimple portfolios
- How we select the right ETFs
- Resources for the robo-advisor Wealthsimple portfolios
- Suggestions for your next steps
- Conclusion
Robo Advisor Wealthsimple, blowing past Betterment?
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
Performance of robo-advisor Wealthsimple portfolios
| Name | Asset class count | Year to date | Return in 2019 | 10 year return | CAGR since 1989 (%) | Risk level | Expense ratio |
|---|---|---|---|---|---|---|---|
| Robo Advisor Wealthsimple Risk Level 10 | 5 | -7.42% | 24.41 | 9.34% | 9.37 | 3 | 0.08% |
| Robo Advisor Wealthsimple Risk Level 9 | 5 | -5.84% | 23.85 | 9.27% | 9.41 | 3 | 0.08% |
| Robo Advisor Wealthsimple Risk Level 08 | 5 | -4.26% | 23.28 | 9.18% | 9.43 | 2 | 0.09% |
| Robo Advisor Wealthsimple Risk Level 07 | 6 | -3.38% | 22.46 | 8.98% | 9.34 | 2 | 0.09% |
| Robo Advisor Wealthsimple Risk Level 06 | 6 | -1.56% | 20.84 | 8.55% | 9.11 | 2 | 0.09% |
| Robo Advisor Wealthsimple Risk Level 05 | 6 | -0.67% | 20.02 | 8.33% | 8.99 | 1 | 0.09% |
| Robo Advisor Wealthsimple Risk Level 04 | 6 | 1.14% | 18.4 | 7.88% | 8.71 | 1 | 0.09% |
| Robo Advisor Wealthsimple Risk Level 03 | 6 | 1.05% | 16.16 | 7.24% | 8.05 | 1 | 0.09% |
| Robo Advisor Wealthsimple Risk Level 02 | 6 | 1.07% | 15.03 | 6.92% | 7.71 | 1 | 0.09% |
| Robo Advisor Wealthsimple Risk Level 01 | 6 | 1.91% | 14.21 | 6.65% | 7.53 | 1 | 0.09% |
These are excellent performing portfolios. We especially like the allocation to minimum volatility stocks. Well done, Wealthsimple!
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
| Name | Total US Market | International Developed | Emerging Markets | Minimum Volatility Stocks | Long Term Treasuries | Intermediate Term Munis |
|---|---|---|---|---|---|---|
| Robo Advisor Wealthsimple Risk Level 10 | 28.10% | 28.10% | 16.90% | 16.90% | 10.00% | |
| Robo Advisor Wealthsimple Risk Level 9 | 26.60% | 26.60% | 15.90% | 15.90% | 15.00% | |
| Robo Advisor Wealthsimple Risk Level 08 | 25.00% | 25.00% | 15.00% | 15.00% | 20.00% | |
| Robo Advisor Wealthsimple Risk Level 07 | 23.30% | 23.30% | 14.20% | 14.20% | 21.60% | 3.40% |
| Robo Advisor Wealthsimple Risk Level 06 | 20.00% | 20.00% | 12.50% | 12.50% | 25.00% | 10.00% |
| Robo Advisor Wealthsimple Risk Level 03 | 11.70% | 11.70% | 6.70% | 10.00% | 23.20% | 36.70% |
| Robo Advisor Wealthsimple Risk Level 02 | 10.00% | 10.00% | 5.00% | 10.00% | 20.00% | 45.00% |
| Robo Advisor Wealthsimple Risk Level 01 | 8.60% | 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 portfolioeinstein.com 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
Conclusion
Wealthsimple is a new and quite spiffy robo-advisor.
Their portfolios are excellent yielding high returns. They are among the very few that use the minimum volatility asset class.
Are you considering investing with a robo advisor?
