In the past one or two years, smart investment and care development has been rapid. Cerulli Associates, a financial services research company, predicts that the scale of asset management for intelligent investment will soar from 250 million in 2015 to 250 billion in 2020 to 489 billion in 2020. However, is it so good that the benefits of these intelligent investment guarantees are guaranteed?
Intelligent investment and investment to provide automated investment services, low-cost personalized configuration portfolio and welcomed by many investment users. However, recently CNBC reported that it is also because of the personalized nature of this type of investment, making it difficult to test through benchmark issues.
In response, Condor Capital, which manages the $900 million New Jersey financial consulting company, has created a unique method to compare the performance of these smart investment advisers. Condor's advisors opened accounts with 13 large-scale intelligent search and acquisition companies, and they were all configured to allocate 60% of stocks and 40% of bonds, and began to track their returns and expenses.
Carpet risk-to-earth ratio test Most of the popular smart investment fees are lower than the average annual cost of 1% for many human investment consultants.
The cost of smart investment is based on an investment of 0.15 to 0.35% of the annual assets. such as:
· Acorns, for users with less than $5,000 in accounts, Acorns charges $1 a month in service fees. For users with accounts over $5,000, Acorns charges an annual fee of 0.25%. If you are a student between the ages of 18-23, Acorns does not charge anything.
Schwab Intelligent Portfolios, a Schwab asset management company, does not charge any fees. The company’s profitability method is: For the Scheffler ETF products configured in the portfolio, the ETF management fees borne by the users actually constitute Charles Schwab’s income, and in addition A small portion of the cash allocated for the direct investment in Jiaxin Bank's account, this part of the funds can also bring net income. Compared with independent robots, Charles Schwab's products and platform advantages greatly reduce the cost of the users.
Wealthfront does not charge an annual fee for accounts of $ 10,000 or less. For account accounts of more than $ 10,000, it only charges 0.25% of the platform fee for a portion exceeding $ 10,000, and users do not need to pay trade commissions.
Condor Capital's data shows that in the eight months of the operation of the five popular smart investment projects, similar portfolios produced different net income results.
Admittedly, Condor Capital's analysis is based on a very short investment period, but it does illustrate how the smart portfolio investment portfolio approach affects revenue.
On January 15 this year, Condor Capital rebalanced its Wealthfront account but maintained a 60/40 portfolio configuration. Whenever the portfolio's combined revenue deviates by more than 10% from the expected asset allocation, investigators will rebalance the account.
Both of the five smart-investors performed better than the two largest balanced mutual funds. In the first eight months of this year, the yield of the balanced index fund in the Vanguard 500 Index Fund was 7.39%, and the active management of the T. Rowe Price Capital Increase Fund gained 7.86%. (The annual rate of the Pioneer 500 Index Fund is 0.22%, and T. Rowe Price is 0.7%.)
Ken Schapiro, founder and president of Condor Capital, said: " So far this year, those with a bias in value and those small and medium-sized stocks are doing well ."
For example, in the 60/40 portfolio tracked by Condor Capital, about 37% of the stock assets in Schwab Intelligent Portfolios are invested in SME stocks. Wealthfront has 23% of stocks invested in small and medium-sized stocks.
A Wealthfront spokesperson stated that the investment portfolio used by Condor Capital was “ not an intermediate risk portfolio †and “it was a low-risk portfolio, so it is reasonable that the performance of this period is low.â€
According to its risk scoring system, Wealthfront does not recommend a 60/40 allocation for users with medium-risk preferences because stocks are highly volatile. In contrast, if the investor is of the medium risk preference type, the platform may be configured with 70% of the ETF fund portfolio and 30% of the bonds.
" Condom Capital's assessment has not considered risk or taxation. If it is considered, it would not be appropriate to test post-tax, post-tax, risk-adjusted maximization gains, " Wauck said. In addition, tax losses and harvesting services are also important factors affecting returns.
Tax loss harvestingIn the so-called "tax loss harvesting" service, when a certain securities suffers a loss , the services of intelligent investment services can use the confirmed losses to offset the gains obtained, thereby achieving the purpose of tax savings. At the same time, assets or portfolios that are highly relevant to the sale of ETFs can be selected as alternatives. This will not only substantially satisfy the investor's risk-return level, but also reinvest the saved tax revenues. In addition, deferred taxation will also give investors an opportunity to make arbitrage on the difference in tax rate and increase the probability of average portfolio returns.
Wauck said: "What's surprising is that when comparing the returns of smart investing clients, only a handful of customers will add tax revenue to the weighted income."
Condor Capital's Schapiro said that he was curious as to how the smart taxpayer 's automatic tax loss harvesting service affected long-term returns in his tracked accounts . For example, Vanguard Fund, they provide tax recovery service for customers through the discretionary power of human investment assigned to each account .
In the short-term accounts opened by Condor Capital, Schapiro could only see the subtle influence it had on the portfolio. According to foreign media, the effect of the implementation of the tax loss harvest plan is closely related to the investor’s income status and investment period.
For example, when the investment period reaches more than five years and there are capital gains available for credit, the tax credits available to investors are also higher, and when investors do not have capital gains in the future, credits can only be applied to them. Ordinary income, so at this time, the investor's tax credit is proportional to the amount of capital gains. On the other hand, when investors hold short-term investment portfolios, the gains and losses within the tax account are difficult to offset in time, and the short investment period is not enough to enjoy the tax changes. dividend.
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