UOB's UTrade Robo

[intime]

Looks like there is a new robo coming in to compete in the sector, this time by a local bank, UOB...
http://www.utraderobo.com/

When will DBS and OCBC come out with their robo for retail investors?

 

[assiak71]

http://www.utraderobo.com/methodology.html
We aim to minimize WHT for our investors by examining the ETF strategy (asset class and domicile of underlying securities), its domicile and listing venue, as well as assuming that the investor is Singapore-domiciled in order to determine the applicable tax rates and double tax treaties. As a result, we have geared our selections towards London-listed, Ireland-domiciled ETFs which are not subject to withholding tax at the investor level.

However, heres what stashaway has to say
https://www.stashaway.sg/r/etf-taxes-returns-and-tracking-errors

 

[chiokcc]

How does Robo adviser work? Using AI + data analytics?

 

[makav31i]

How does Robo adviser work? Using AI + data analytics?

From what I understand, Robo-advisors ask you to fill up some questionnaire to assess your risk profile...after which they would assign a portfolio for you like 80% in equities and 20% in bonds...So you give them money and they help you purchase the stocks and bonds...Just like buying shares using POSB Invest Saver and etc...

 

[ExtremeWays]

Modern Portfolio Theory is dangerously flawed

 

[peipei1]

Yay! Finally one backed by a local bank. The projected 40 years return so low 5.4%, AI gave me 72/18 equities to bonds allocation with EM at a high 30%...
This is the same benchmark figures other fund houses were saying for the next decade at least... the good days are over or they are expecting a major major 30-50% crash soon?

 

[Maeda_Toshiie]

http://www.utraderobo.com/methodology.html
We aim to minimize WHT for our investors by examining the ETF strategy (asset class and domicile of underlying securities), its domicile and listing venue, as well as assuming that the investor is Singapore-domiciled in order to determine the applicable tax rates and double tax treaties. As a result, we have geared our selections towards London-listed, Ireland-domiciled ETFs which are not subject to withholding tax at the investor level.

However, heres what stashaway has to say
https://www.stashaway.sg/r/etf-taxes-returns-and-tracking-errors

It is normal for London listed ETFs for S&P500 to have a greater tracking error. The biggest cause is simply due to London Stock Exchange not being in operation at exactly the same time as any of the US stock exchanges.

However, if you are buying and holding, why should tracking errors matter if it does not result in underperformance. Note: they are not claiming that US listed S&P 500 ETFs peform better , instead they are making a fuss over tracking errors. Such tracking errors only kick in when you keep trading.

Same goes for the bid-ask spread. Sure, US listed ETFs are hugely liquid with small bid-ask spreads, better than London listed S&P500s (I ain't carring about those listed on other European exchanges). Again, if you aren't constantly trading, why should that matter?

Yet another point for people who buy ETFs on their own: you are subject to US estate taxes when buying US listed ETFs, and the bar is low at $60,000 for non resident aliens.

Part of the reason why 15% less withholding makes a smaller impact at the present moment is due to the current trend of US companies not issuing dividends and instead engage in sharebuy backs instead. This can change in the future.

Finally, if you are buying an ETF that track a world stock index, there is no way to have 0.0% tracking errors, because there is no stock exchange that operates 24 hours a day.

 

[limster]

if you have a conservative robo-portfolio with big percentage of fixed-income ETF, then what is effectively 30% vs 0% withholding is a big deal.

Imagine getting 3% dividend from LSE-listed bond ETF vs 2.1% dividend from the identical but US-listed bond ETF....

 

[revhappy]

if you have a conservative robo-portfolio with big percentage of fixed-income ETF, then what is effectively 30% vs 0% withholding is a big deal.

Imagine getting 3% dividend from LSE-listed bond ETF vs 2.1% dividend from the identical but US-listed bond ETF....

But why would Singaporeans take exposure in international bonds, when SGD is a nice appreciating currency?

I think this is a fundamental flaw of roboadvisors, not using SGD as the currency basis for performance.

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[revhappy]

I filled in the questionnaire.
Starting Investible corpus 200k,
Annual addition $12000
No house
Networth 800k
Moderate risk
Retirement in 15 years
Post retirment withdrawal period 30 years.

Here is the breakdown I got:

Name Value

Emerging Market Equities 53,128
Japan Equities 6,599
Australia Equities 1,813
Europe Equities17,442
U.S. Equities 43,040
Canada Equities 2,446
Emerging Market Local Bonds 13,085
Emerging Market US$ Bonds 13,548
€ High Yield Bonds 12,970
U.S. Bonds 3,267
U.S. High Yield Bonds 10,000
US$ Corporate Bonds12,319
Precious Metals 9,993
Cash 350

Total 200,000

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[assiak71]

Do they show which etfs?

 

[revhappy]

Do they show which etfs?

Nope

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[numbers]

the UOB Robo fees are way higher than stashaway and smartly fees.

 

[limster]

the UOB Robo fees are way higher than stashaway and smartly fees.

under 100,000 stashaway is cheaper

portfolio size $100,001 - $250,000, UOB total fees seems to be cheaper than stashaway

$250,000-350,000, seems to be about the same, but i'll let someone do the calculations to get the correct figures.

 

[flikmy]

the UOB Robo fees are way higher than stashaway and smartly fees.

Actually, UOB's pricing isn't too bad. It's fairly similar to Smartly's pricing. When you have under $50,000, it will be more expensive than Smartly or Stashaway. For SGD 10k aum, annual fees for Smartly's is $100, Stashaway $80 and UOB's $88

However, UOB's pricing becomes cheaper than Stashaway once you get $50,000 to just under $500,000 aum.

As some have mentioned, the choice of ETFs might probably be the bigger impact in grand scheme of things.

The large proportion in EM for UOB is rather puzzling as well. Surprised that they didn't separate out Singapore equity and bonds as a category.

 

[revhappy]

Even Fundsupermart have been forever bullish on China and Asia and bearish on US. That call didn't go well, so far.

Their star research has 5 stars for China since 2010 and for US it is 2.5 stars since 2016 atleast.

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[housey]

Most of them are not going to survive. $80 per year per customer for $10k investment ? That’s less than the amount girls spend at the salon once.

How many customers do u need before you can breakeven and we haven’t even talked about how easy it is to setup this business there’s so many competitors thinning the market share.

 

[flikmy]

Most of them are not going to survive. $80 per year per customer for $10k investment ? That’s less than the amount girls spend at the salon once.

How many customers do u need before you can breakeven and we haven’t even talked about how easy it is to setup this business there’s so many competitors thinning the market share.

Actually, at 0.8% this is actually more expensive than most ETFs charge, and your underlying investments will still be paying management fees to its constituent ETFs. It's a volume game. If you can get your total AUM to a certain size, say 0.5 billion, you're getting fees of about $4 million a year. That should be able to keep the lights on for the fund and it's managers/tech guys. As a comparison, ES3 has a total size of S$660 million at the moment with expense ratio of 0.30%. Even G3B with a size of S$ 220 million and expense ratio of 0.33% is still going.

However, I agree with your point that for the size of the population in Singapore, it isn't going to be possible to have more than 2-3 of these robo-advisors unless there's some significant uniqueness for some of them. The ones that have the backing of banks might probably survive since the capital involved is probably small change for them compared to the reputational benefits. Don't think it'll be a big money churner at the end of the day, since target consumers for such products are probably price-conscious investors.

 

[revhappy]

FSM has something called Maps. But I guess it is unit trusts.

I would expect FSM to come out with a etf based robo soon.

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[intime]

It needs an initial $5,000. This amount is quite big to small investors, and seems less accessible than other robos that allow monthly contributions of at least $50-$100.

And their subsequent minimum amount is $500.