Smartly Singapore responded to our query emails and sent us the sign-up notification email with the referral code. Good job with this and appreciate the follow-up! Previously, I mentioned that I will be setting up the Smartly robo-advisor account since my wife set up the StashAway Singapore robo-advisor account. But I changed my mind after realizing the bulk of the Monthly Investment Plans (MIPs) with the various banks is in my name. It’s essential that my wife holds more investments in her own name and we decided to let her set up the Smartly account as well.
The Smartly onboarding process was smooth and the interface was simple & easy to use. The current 4 x S$100 transfers in a month for my wife’s StashAway account are on the 1st, 8th, 15th and 25th of every month. For July 2017, S$200 has already been transferred into her StashAway account: one-time transfer of S$100 and regular transfer of S$100 on 25 July 2017. To mirror the setup for my wife’s Smartly account, we are doing 2 x one-time transfer of S$100 (i.e. total of S$200) into the account by this week. We also set up 4 x S$100 transfers in a month for my wife’s Smartly account on the 4th, 11th, 18th and 28th of every month.
The direct competition between StashAway and Smartly is on! They both have similar starting funds and funds transfer dates & amounts. If possible, we intend to support both robo-advisors in the long-term and have no problem parking even more funds with them. This should be the case even if one outperforms the other because the ETFs they invest in for the portfolios my wife have seem to be somewhat different. These are the holdings of her Smartly account:
- Emerging market bonds
- US small cap value stocks
- US total stock market
- US large cap value stocks
- Gold
- Inflation protected bonds
What I like about both robo-advisors is that their ETF holdings don’t overlap much with our own manual ETF holdings. This diversification would allow us to build our manual ETF holdings and increase our exposure to other equity markets. Without worrying about what we are also doing with our robo-advisor accounts.
With the last piece of the puzzle in place, this is our monthly automated investments setup:
- POSB Invest-Saver: S$200
- Maybank MIP: S$200
- OCBC BCIP: S$1,500
- StashAway: S$400
- Smartly: S$400
The total monthly cash funds invested automatically is S$2,700, which works in the current bull market environment. It’s also important to identify the points of increase in a bear market environment i.e. which MIP or robo-advisor to increase the monthly investment amount and by how much.
This is our intended action plan in a minor bear market:
- Increase monthly OCBC BCIP investment from S$1,500 to S$1,700
- Increase monthly StashAway investment from S$400 to S$600
- Increase monthly Smartly investment from S$400 to S$600
Total monthly invested amount goes up by S$600 to S$3,300.
This is our intended action plan in a major bear market:
- Increase monthly OCBC BCIP investment from S$1,500 to S$2,000
- Increase monthly StashAway investment from S$400 to S$800
- Increase monthly Smartly investment from S$400 to S$800
Total monthly invested amount goes up by S$1,300 to S$4,000.
These steps will be taken on top of our own manual ETF investments during mini and major bear markets. No point planning to make big increases because it would be difficult enough to make those small increases. By staggering the small increases, we are more likely to stick to the action plan in a tough market environment. Otherwise, we will be too afraid to make any significant changes to our automated monthly investments. Besides, nobody knows when and how the next crisis will happen that causes the bear market, much less the severity of it.
Our asset portfolio is finally up and running with the triggers and plans in place. More importantly, it’s growing every month with regular cash injections into our savings and ETF portfolios. Of course, this is contingent on us not losing our jobs. But we can now focus better on addressing the higher retrenchment risk without having to worry much about our savings and investments. We can also look to reduce our high expenses but still spend on fun items such as travel, dining and entertainment. Limit the number of focus areas & decision-making points and we just might achieve better results.
Haha … when I first saw the blog post title, I was thinking wot?? wife’s being setup to be guinea pig, heheh…
The Smartly portfolio seems to be a bit more volatile, with focus on value stocks and also EM bonds.
Hohoho!! Let the head-to-head battle begin … Will be interesting to see how each of the portfolios perform during market volatility.
The main thing to note is that both robo asset allocations are pretty US-centric, apart from portions into Asia ex-Jap and the EM bonds.
Not really bad, as US markets have demonstrated resilience & dynamism over the decades that should easily continue another 2-3 more decades. And larger US companies have significant international sales, earning their revenue in various foreign currencies.
So I guess your other ETFs will focus more on global & international markets?
Yup, I guess you could say my wife is the guinea pig in this robo-advisor venture of ours, haha. She doesn’t mind trying it out as long as it works out for her in the long run. So I’m hoping for my wife’s robo-advisor portfolios to outperform mine!
I did notice the US-centric ETF allocations of both robo-advisors, which should be fine due to the global nature of US companies as you have mentioned. Yeap, I might focus my other ETFs on other equity markets. Currently, the Vanguard ETFs I’m looking at are All-World High Dividend Yield, Developed Europe, Emerging Markets and Developed Asia Pacific ex Japan.
Looking forward to see how the returns comparison between the 2 robos are. I didn’t realise Smartly would be US-centric as well.
On a separate note, there’s a remarkable distrust for robo advisors from many people when I try to discuss them. A combination of a thinking it’s a scam, risk from a non-proven investment type and thinking they can do better themselves. These are banking professionals, mind you, so it’s not really a case of lack of familiarity with investment products.
It might be due to the ETFs listed on the NYSE being more liquid while offering the necessary exposure to global equity and bond markets.
Robo-advisors are still a relatively new investment concept in Asia but they are more well-known in countries such as US and Canada. As for the level of distrust, it’s understandable if you think about what robo-advisors represent at their core – online fund management with passive investing approach at lower fees. People here are already not big on passive investing, much less trust their funds to be invested online with no representative to interact with.
However, I reckon it’s a matter of time before robo-advisors take off in this region. They just need to go through more bull and bear markets while beating the average returns of active funds consistently to prove themselves as viable investment alternatives.
What’s the average return or yield?
Haha, I have no idea what the average return or yield is. I’m hoping for above 5% with my wife’s long-term holding period. I might post summaries of my wife’s StashAway and Smartly accounts to show their performance and provide better indications of their returns.
Very nice!
Your recent posts have got me tempted to just setup accounts with both robos.
Since you are more intimate with both platforms, can you help me with 2 questions?
Do you know what is the minimum contribution amount for both platforms?
Also, your regular contributions to both robos are set-up from your crediting bank and you just picked dates that you are comfortable with?
Thanks!
I read your blog often and saw the post about you not investing with robo-advisors. I agree that the timing is off due to the high valuations in the equity markets. My original plan was to start investing with the robo-advisors last year, which would have been a better time to start. But the delays in their setup derailed that plan. That’s why we are starting off with small amounts first before gradually increasing them.
There is no minimum account balance for StashAway but there might be a minimum account balance of S$50 for Smartly. We did one-time transfers of S$100 into StashAway and Smartly separately and they have been invested already. There does not appear to be any minimum contribution amounts for the funds transfers into StashAway and Smartly.
Yup, we set up regular contributions from my wife’s bank account into the robo-advisors’ bank accounts before the funds get invested. We picked the dates and spread them out across each week and month.
Thanks for the reply FS!
I think if it’s for the long haul, the timing is of no real major consequence. Most people are better off “setting and forgetting”, or else they might postpone and forget to invest later altogether!
I’m thinking of setting up an account with the same initial and let them “race” against each other, but maybe not so soon. I look forward to your future updates!
No worries, yup, it would have to be a time period of at least 10 years for the benefits of this set and forget strategy to outweigh the costs. Definitely better than not investing as you said!
I should continue to post and update my wife’s StashAway and Smartly account summaries on the blog for easier tracking of their performance and comparison purposes. Let me know when you do set up the accounts!
Thanks for your update in your experiences.
You wrote in to inquire for Smartly set up?
I think the setting up is slow as I registered both Smartly and Stashaway at about the same time. My Stashaway account is now up and running and purchases done.
Still no news from Smartly 😒
Could be they are overwhelmed.
Yup, I wrote in to Smartly to enquire about my sign-up notification email and they responded to say it was on its way before sending it across to me subsequently. My understanding is that Smartly has been onboarding customers for a few weeks already. Agree that StashAway seems to be onboarding customers more quickly but I’m not sure whether this is because Smartly has a larger number of people on its waiting list compared to StashAway. You can try writing in to Smartly!
Hi FinanceSmiths,
Curious – have you been able to find out how much assets the robo advisor platforms have garnered? At the end of the day, I would prefer some scale… more so because if they don’t gather assets then they probably can’t survive. OK, maybe client funds are in a segregated account, etc etc. but no one wants the unpleasantness of dealing with that, even if clients don’t have counterparty risk. And these guys have launched at a time when valuations aren’t exactly screaming buys.
Consequently, it also worries me how much of the assets will be “Sticky” – the moment a correction happens, I wouldn’t be surprised to see $ just walk out of the door from these guys. Might or might not happen – human nature is too difficult to predict.
Like you, I’ve left the amounts at sub $500 / month in both Smartly and Stashaway. I like this concept, it could work well but it needs some level of growth. I’m all in support of it, I just shouldn’t get burned 🙂
What are your thoughts? Thanks.
Hi GMOO,
Nope, I have not been able to find out how much assets the robo advisor platforms have garnered. It’s still early days but we might have a better indication at a later stage. My guess is MAS is closely monitoring and regulating both StashAway and Smartly. After all, they are the first mass market robo-advisor platforms to launch in Singapore. If anything bad happens to them, it would severely impede development in the FinTech Wealth Management area since customers will no longer trust the products.
As you have noted, client funds are in a segregated account but there’s always going to be some form of risk when investing with robo-advisor platforms. That being said, I believe in the long term potential of StashAway and Smartly. I reckon it’s in times of market dips and crashes that these robo-advisors have the opportunities to prove themselves. The key for us as investors is to continue to contribute cash funds to our robo-advisor accounts for the bear markets to work in our favour. It’s over for us the moment we stop our contributions in times of crisis.
It would take time for StashAway and Smartly to grow. I’m interested to see how they can gain market share in the wealth management area. Nobody wants to get burned and I can only hope for the best.