Digital wealth managers, or robo advisors, aim to invest clients’ money across a diversified basket of funds. The objective is to deliver optimized risk-adjusted returns in a scalable model.
Interestingly, even though most robo advisors profess to be inspired by the modern portfolio theory (pioneered by Harry Markowitz), the actual allocations and resultant returns tend to be quite different.
Many robo advisors simply invest funds across a basket of stock and bond ETF’s. Some of them also provide allocation to alternative asset classes, such as real estate, gold, and, in some cases, cryptocurrency.
For retail clients with long term investment objectives, it is useful to understand where robo advisors invest their funds.
The slides below provide details of the ETF’s in which some of the world’s most popular robo advisors invest for their standard portfolios.
This is a valuable resource for:
- Existing clients of digital wealth managers
- Those considering opening an account with a digital wealth manager
- DIY investors that want to find out which ETF’s are used by the biggest digital wealth managers
Do you invest with a robo advisor, or have your own ETF portfolio?
(source: company websites)