<\/span>What is a robo advisor? <\/strong><\/span><\/h2>\nA robo advisor is a digital platform that uses algorithms to automate your investment portfolio. It automatically creates a portfolio for you based on your investing goals and risk tolerance, and periodically rebalance your portfolio.<\/p>\n
Typically, a robo advisor uses your money to invest in exchange-traded funds<\/a> (ETFs), which are groups of stocks, bonds or other investments.<\/p>\nBut each robo advisor implements a different investing methodology \u2013 the underlying investments and allocation of your portfolio will differ based on the robo advisor platform you invest in.<\/p>\n
<\/span>What are the advantages of investing with a robo advisor?<\/strong><\/span><\/h2>\n\n- Passive investing. <\/strong>If you\u2019re not comfortable making investment decisions on your own, or you don\u2019t want to (or can\u2019t) spend a lot of time researching, monitoring and rebalancing your portfolio, then robo advisors could be a good alternative.<\/li>\n
- Diversification.<\/strong> Being diversified (i.e. having many types of investments versus just one type) helps you spread your risk. This means that if a particular investment in your portfolio performs badly, you won\u2019t be greatly affected as you have other types of investments.<\/li>\n
- Avoid emotion-based investing.<\/strong> Some investors panic and withdraw their money in a downturn or pump in more cash when the market is rising. But timing the market is incredibly hard and can lead to smaller returns in the long run. With a robo advisor, you can take a ringgit cost averaging<\/a> approach by investing a fixed amount every month, avoiding emotion-driven impulses to buy and sell based on market sentiment.<\/li>\n
- Low fees.<\/strong> Robo advisors charge low management fees that are typically below 1% a year.. By contrast, if you invest in unit trust funds you may need to fork out 0.5% to 2.5% per annum. Some unit trust funds also charge up to 5% upfront in sales charge, and another 5% when you redeem your investment value.<\/li>\n<\/ul>\n
<\/span>What are the drawbacks of investing with a robo advisor?<\/strong><\/span><\/h2>\n\n- Limited customisation. <\/strong>Robo advisors allow you to set certain things like your risk profile or investing goals, but that\u2019s about it. You generally can\u2019t tinker with the investment methodology, choose (or exclude) individual investments in your portfolio or adjust your exposure towards certain geographical regions.<\/li>\n
- Non-transparent investing methodology. <\/strong>If you\u2019re a savvy investor, you may be interested in the specific criteria a robo advisor uses to select ETFs, or how a robo advisor chooses to rebalance your portfolio. However, this information is not always made available.<\/li>\n
- Dividend withholding tax.<\/strong> Some robo advisors invest heavily in securities listed in the US. However, as a foreign person buying US stocks, your dividends will be subject to a 30% withholding tax, although your robo advisor platform may be able to seek partial reimbursement of these taxes for you.<\/li>\n<\/ul>\nRead more: <\/strong>A Beginner\u2019s Guide To Robo Advisors In Malaysia<\/strong><\/a><\/div><\/div>\n
<\/span>What robo advisor platforms are there in Malaysia?<\/strong><\/span><\/h2>\nWhile they\u2019ve been around since 2008, the first robo advisor launched in Malaysia only three years ago. Singapore-based StashAway<\/a> launched in 2018, while MyTHEO<\/a> and Wahed Invest<\/a> entered the market a year later. In addition, we now have other players: homegrown robo advisor Akru<\/a>, Bank Islam Malaysia\u2019s BEST Invest<\/a>, Kenanga Investment Bank\u2019s KDI Invest<\/a> and Raiz<\/a>.<\/p>\nHere\u2019s how these robo advisors compare against each other at a glance:
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But each robo advisor implements a different investing methodology \u2013 the underlying investments and allocation of your portfolio will differ based on the robo advisor platform you invest in.<\/p>\n
<\/span>What are the advantages of investing with a robo advisor?<\/strong><\/span><\/h2>\n\n- Passive investing. <\/strong>If you\u2019re not comfortable making investment decisions on your own, or you don\u2019t want to (or can\u2019t) spend a lot of time researching, monitoring and rebalancing your portfolio, then robo advisors could be a good alternative.<\/li>\n
- Diversification.<\/strong> Being diversified (i.e. having many types of investments versus just one type) helps you spread your risk. This means that if a particular investment in your portfolio performs badly, you won\u2019t be greatly affected as you have other types of investments.<\/li>\n
- Avoid emotion-based investing.<\/strong> Some investors panic and withdraw their money in a downturn or pump in more cash when the market is rising. But timing the market is incredibly hard and can lead to smaller returns in the long run. With a robo advisor, you can take a ringgit cost averaging<\/a> approach by investing a fixed amount every month, avoiding emotion-driven impulses to buy and sell based on market sentiment.<\/li>\n
- Low fees.<\/strong> Robo advisors charge low management fees that are typically below 1% a year.. By contrast, if you invest in unit trust funds you may need to fork out 0.5% to 2.5% per annum. Some unit trust funds also charge up to 5% upfront in sales charge, and another 5% when you redeem your investment value.<\/li>\n<\/ul>\n
<\/span>What are the drawbacks of investing with a robo advisor?<\/strong><\/span><\/h2>\n\n- Limited customisation. <\/strong>Robo advisors allow you to set certain things like your risk profile or investing goals, but that\u2019s about it. You generally can\u2019t tinker with the investment methodology, choose (or exclude) individual investments in your portfolio or adjust your exposure towards certain geographical regions.<\/li>\n
- Non-transparent investing methodology. <\/strong>If you\u2019re a savvy investor, you may be interested in the specific criteria a robo advisor uses to select ETFs, or how a robo advisor chooses to rebalance your portfolio. However, this information is not always made available.<\/li>\n
- Dividend withholding tax.<\/strong> Some robo advisors invest heavily in securities listed in the US. However, as a foreign person buying US stocks, your dividends will be subject to a 30% withholding tax, although your robo advisor platform may be able to seek partial reimbursement of these taxes for you.<\/li>\n<\/ul>\nRead more: <\/strong>A Beginner\u2019s Guide To Robo Advisors In Malaysia<\/strong><\/a><\/div><\/div>\n
<\/span>What robo advisor platforms are there in Malaysia?<\/strong><\/span><\/h2>\nWhile they\u2019ve been around since 2008, the first robo advisor launched in Malaysia only three years ago. Singapore-based StashAway<\/a> launched in 2018, while MyTHEO<\/a> and Wahed Invest<\/a> entered the market a year later. In addition, we now have other players: homegrown robo advisor Akru<\/a>, Bank Islam Malaysia\u2019s BEST Invest<\/a>, Kenanga Investment Bank\u2019s KDI Invest<\/a> and Raiz<\/a>.<\/p>\nHere\u2019s how these robo advisors compare against each other at a glance:
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<\/span>What are the drawbacks of investing with a robo advisor?<\/strong><\/span><\/h2>\n\n- Limited customisation. <\/strong>Robo advisors allow you to set certain things like your risk profile or investing goals, but that\u2019s about it. You generally can\u2019t tinker with the investment methodology, choose (or exclude) individual investments in your portfolio or adjust your exposure towards certain geographical regions.<\/li>\n
- Non-transparent investing methodology. <\/strong>If you\u2019re a savvy investor, you may be interested in the specific criteria a robo advisor uses to select ETFs, or how a robo advisor chooses to rebalance your portfolio. However, this information is not always made available.<\/li>\n
- Dividend withholding tax.<\/strong> Some robo advisors invest heavily in securities listed in the US. However, as a foreign person buying US stocks, your dividends will be subject to a 30% withholding tax, although your robo advisor platform may be able to seek partial reimbursement of these taxes for you.<\/li>\n<\/ul>\nRead more: <\/strong>A Beginner\u2019s Guide To Robo Advisors In Malaysia<\/strong><\/a><\/div><\/div>\n
<\/span>What robo advisor platforms are there in Malaysia?<\/strong><\/span><\/h2>\nWhile they\u2019ve been around since 2008, the first robo advisor launched in Malaysia only three years ago. Singapore-based StashAway<\/a> launched in 2018, while MyTHEO<\/a> and Wahed Invest<\/a> entered the market a year later. In addition, we now have other players: homegrown robo advisor Akru<\/a>, Bank Islam Malaysia\u2019s BEST Invest<\/a>, Kenanga Investment Bank\u2019s KDI Invest<\/a> and Raiz<\/a>.<\/p>\nHere\u2019s how these robo advisors compare against each other at a glance:
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<\/span>What robo advisor platforms are there in Malaysia?<\/strong><\/span><\/h2>\nWhile they\u2019ve been around since 2008, the first robo advisor launched in Malaysia only three years ago. Singapore-based StashAway<\/a> launched in 2018, while MyTHEO<\/a> and Wahed Invest<\/a> entered the market a year later. In addition, we now have other players: homegrown robo advisor Akru<\/a>, Bank Islam Malaysia\u2019s BEST Invest<\/a>, Kenanga Investment Bank\u2019s KDI Invest<\/a> and Raiz<\/a>.<\/p>\nHere\u2019s how these robo advisors compare against each other at a glance:
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Here\u2019s how these robo advisors compare against each other at a glance:
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![\"akru](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/08\/30153353\/akru-asset-allocation.png\")
![\"MYTHEO](\"https:\/\/static.imoney.my\/articles\/wp-content\/uploads\/2020\/08\/30153158\/MYTHEO-asset-allocation-300x244.png\")
MyTHEO\u2019s most aggressive portfolio setting is almost entirely made\u00a0up\u00a0of\u00a0equities.\u00a0Slightly less than half of that (45%) goes to US stocks, while 54% goes to international stocks. Big portions of that are made up of specific regions, such as a 14.76% allocation to Japanese equities and 6.57% to Hong Kong equities.<\/p>\n