AutoWealth and I

I thought I will also share a bit about why I decided to try out Autowealth. There are just 3 companies offering similar robo-advisory services in Singapore. Autowealth is one of them, the other two are Smartly and StashAway. I have nothing against the other two, but I was drawn to AutoWealth and I believe in fate.

Earlier this year, I had a chance to learn more about their business model from the "brain" behind the formula used by AutoWealth -- Tai Zhi. It was at an exhibition booth at Innovest Unbound and their booth was empty so I went over to ask a few questions.

I had my doubts about the company's sustainability

• The marketing was a little bit "smoky" because anybody who had bought shares post Aug 2015 would have made decent gains, so I wasn't impressed when they marketed the 5-6% returns after a year.
• The "brain" is honest. His IT guy - the guy who coded his brain out and did the portal - is down-to-earth. I had a fleeting thought that these guys might get conned by someone.
• The fees are so low SGD 18 platform fee/year regardless of the number of transactions. Imagine every customer does weekly buys... lol even monthly buys, I don't know how to earn. On top of that, they charge 0.5% of Asset Under Management (AUM), which is really like a charity business.
• Marketing hasn't been agressive, unlike their competitors, but it shows that they are down-to-earth (again) and watch their bottom line.
• Shares are held in a custodian, so they can be easily "knocked out" of business and the customer don't need them anymore.

I went to research a bit more about the ETFs they recommended and I decided to sign up after a few months. The ETFs recommended have really really low expense ratios. I don't really care about the ETF performance because prices fluctuate and there is nothing much to compare between ETFs other than the expense costs.

Here are some screen shots of how it looks like. I don't know if I can share it but it was one of the burning questions I had before signing up. (Seeing how down-to-earth they are, I decided that I will help them with their marketing lol...)

There is a portofolio summary.

There is a composition chart to show you that they really buy according to the ratios they showed you when you signed up.

Shows you how each ETF is doing too.

Top-up history -- this is important and it's there

There are many other screens, but I don't use them.

I have no doubt about their passion to bring investment to the masses. I still have my doubts about the company's sustainability, but I am not buying shares in AutoWealth, so it doesn't matter. If AutoWealth shuts down tomorrow, the shares are held with Saxo Capital, Power of Attorny will cease, and I have the Saxo not-so-sexy portal to still see the market prices, but I will probably have to pay much much higher transaction fees. In the meantime, all I can do is to do a little bit of charitable marketing, in hope of increasing their sustainability. I will definitely increase my AUM with them to about 10% of my portfolio when US equity prices moderate a bit. For now... I am happy to see just 1% of my portfolio grow at a crazy 0.5% per week.

List of ETFs invested:

1. Vanguard Total Stock Market Index Fund ETF Shares (VTI) expense ratio 0.04%
2. Vanguard European Stock Index Fund ETF Shares (VGK) expense ratio 0.10%
3. Vanguard Pacific Stock Index Fund ETF Shares (VPL) expense ratio expense ratio 0.10%
4. Vanguard Emerging Markets Stock Index Fund ETF Shares (VWO) expense ratio 0.14%
5. Blackrock iShares 7-10 Year Treasury Bond ETF (IEF) expense ratio 0.15%
6. Blackrock iShares International Treasury Bond ETF (IGOV) expense ratio 0.35%