One common mistake some investors make is to lump all their investment goals into a single strategy portfolio, expecting it to generate our desired returns. However, this simplified approach overlooks the varied nature of our investment goals and the timeframe required to achieve them.
For instance, aspirational goals like upgrading to a bigger property or going on a family vacation should not be mixed with essential goals like saving for retirement, or children’s tertiary education, as they vary in importance. Moreover, we may also be willing to take higher risks on our aspirational goals, as a higher rate of return is essential to achieving our desired goals, especially as we may allocate a smaller portion of our savings.
Addressing these aspirational investment needs is AutoWealth Plus+, featuring 100% equity-based thematic portfolios aimed at generating double-digit returns by capitalising on long-term trends.
About AutoWealth
A quick introduction first. Founded in 2015, AutoWealth is a MAS-licenced firm that offers institutional-grade robo-advisory to retail investors. It has many corporate clients in the Fortune 500 ranks who appoint AutoWealth to advise and manage their corporate pension scheme. Its main draw is its proprietary algorithm which can construct a robust portfolio, considering risk tolerance levels and the expected return needed to achieve investment goals.
Coupled with a stringent risk management approach and an optimised Exchange Traded Fund (ETF) selection process, it can reliably build suitable portfolios and fully manage them for all. This same proven-and-tested algorithm is also readily available to all retail investors.
The money we invest with AutoWealth is held in personal, segregated custody accounts at Saxo Capital Markets and iFast. These companies are also MAS-licenced financial institutions that are regulated to perform custodial services.
Read Also: AutoWealth Review: Here’s What We Like About Investing With This Robo-Advisor
What Are Thematic Portfolios
While the AutoWealth Starter consists of globally diversified equity and bond ETFs portfolios, the AutoWealth Plus+ is based on thematic portfolios. These portfolios allow us to invest based on an idea or emerging trends expected to evolve over time.
With thematic portfolios, we are investing in the future world based on a particular theme. However, note that thematic portfolios have a higher concentration risk than traditional portfolios due to their exposure to a specific sector or trend.
Portfolios Available Under AutoWealth Plus+
Through AutoWealth Plus+, we can invest in up to 5 thematic portfolios in accordance with our risk tolerance level. These curated 100% equity-based portfolios are suitable for investors with a higher risk appetite and investment horizons of at least 5 years, making them ideal to support our aspirational goals.
#1 Future Of New Economies Portfolio
5-Year Annualised Return: 7.57%
Annualised Volatility: 15.25% (maximum temporary drawdown: -39.10%)
Source: AutoWealth, The Future of New Economies Portfolio
The Future Of New Economies Portfolio is the latest addition to the collection of AutoWealth Plus+ portfolios. It aims to deliver strong risk adjusted returns by diversifying into the China, Taiwan, India, and South Korean equity markets.
The portfolio also allocates 10% of its funds into a minimum volatility ETF, specifically the iShares MSCI Emerging Markets Minimum Volatility Factor (EEMV). The Minimum Volatility ETF seeks to track an index composed of emerging market equities that exhibit low volatility characteristics to provide downside protection for the portfolio.
The Future Of New Economies Portfolio is ideal for investors who believe in the growth story of Asian emerging markets and seek exposure to these four economies.
#2 Future 2050 Portfolio
Annualised Volatility: 21.11% (maximum temporary drawdown: -25.03%)
5-Year Annualised Return: 31.17%
Source: AutoWealth, Future 2050 Portfolio
Arguably, two of the megatrends of the future are technology changing the world and healthcare addressing the needs of the ageing population. The Future 2050 portfolio aims to capitalise on these trends by investing primarily in technology companies and healthcare companies.
The portfolio also allocates 10% of its funds into a minimum volatility ETF, specifically the iShares MSCI USA Minimum Volatility Factor (USMV). The Minimum Volatility ETF seeks to track an index composed of US listed firms that exhibit low volatility characteristics to provide downside protection for the portfolio.
The Future 2050 portfolio is ideal for investors who believe in the long-term trends of technology changing our world and healthcare meeting our ageing population needs.
#3 Future Of Digital Economy Portfolio
Annualised Volatility: 26.23% (maximum temporary drawdown: -64.12%)
5-Year Annualised Return: 15.95%
Source: AutoWealth, Future Of Digital Economy Portfolio
The future of the digital economy portfolio aims to capitalise on the multi-decade trend of digitalisation by diversifying into e-commerce, internet, and fintech companies.
The portfolio also allocates 10% of the funds into a minimum volatility ETF, specifically the iShares MSCI USA Minimum Volatility Factor (USMV). The Minimum Volatility ETF seeks to track an index composed of US listed firms that exhibit low volatility characteristics to provide downside protection for the portfolio.
The future of the digital economy portfolio is ideal for investors who believe in the multi-decade trend of economies embracing digital transformation.
#4 Growth & Momentum Portfolio
Annualised Volatility: 12.95% (maximum temporary drawdown – 26.27%)
5-Year Annualised Return: 25.61%
Source: AutoWealth, Growth & Momentum Portfolio
The Growth & Momentum Portfolio utilises factor investing as its core investment strategy to invest across growth, momentum, and minimum volatility factors to achieve above-market returns. Factor investing is an investment approach in which stocks are selected based on particular factors that drive returns.
The portfolio also allocates 10% of the funds into a minimum volatility ETF, specifically the iShares MSCI USA Minimum Volatility Factor (USMV). The Minimum Volatility ETF seeks to track an index composed of US listed firms that exhibit low volatility characteristics to provide downside protection for the portfolio.
The Growth & Momentum Portfolio is ideal for investors who believe in a factor-based investment approach, specifically growth and momentum investing.
#5 Turnaround Portfolio
Annualised Volatility: 18.97% (maximum temporary drawdown: – 28.23%)
5-Year Annualised Return: 15.68%
Source: AutoWealth, Turnaround Portfolio
The turnaround portfolio capitalises on sectors that have achieved sustainable long-term market returns during normal market conditions but are temporarily depressed due to a specific market event and are likely to eventually rebound or “turnaround” stronger than others.
Specifically, the turnaround portfolio aims to capitalise on the COVID-19 event by investing in consumer discretionary, lithium, renewable energy, aerospace & defense, and home construction sectors to earn above-market returns.
The turnaround portfolio is ideal for investors who want to capitalise on the global recovery after the outbreak of COVID-19.
How Much Does AutoWealth Plus+ Portfolios Charge?
AutoWealth Plus+ only charges a fee on its portfolios when our investments make money. Its unique fee structure co-shares part of the risk by only charging an annual performance fee of 8% on profits earned in each calendar year.
AutoWealth Plus+ also does not charge any transaction or custody fees while allowing us to enjoy low overall transaction costs, which is another benefit over DIY investing.
How To Start Investing With AutoWealth Plus+ Portfolios
To invest in any of the AutoWealth Plus+ portfolios, sign up for an account with AutoWealth.
Click on “Get Started” on the homepage, skip the Starter portfolio recommendation, and select “AutoWealth Plus+” when asked to select a portfolio.
Next, click on the “Plus+” tab to create an AutoWealth Plus+ portfolio. You would be required to re-fill your goals, personal information, investment information, and risk assessment. Once done, select the preferred portfolio that you wish to invest in.
Finally, remember to fund your AutoWealth Plus+ account, which you can also set up a recurring deposit on a monthly basis (Dollar cost averaging – DCA).
Sign up with AutoWealth and use the promo code ‘DollarsAndSense‘ to receive a $20 top-up into your account once you fund it with the $3,000 minimum.
Read Also: Step-By-Step Guide To Opening An AutoWealth Account For New Singapore Investors
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