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Robo advisors have been gaining traction and popularity globally, and it is no surprise that the assets under management (AUM) in this sector amount to US$1,062m in 2020 with a 52.3% increase year on year, according to Statista.
Homegrown online investment firm StashAway is one of the top picks for robo-advisors here in Singapore, providing users with tailored portfolios and automating their investments across low-risk ETFs. With low fees and zero minimum investment amount to start, small-time and passive investors typically stand to benefit most with StashAway.
Find out more about how StashAway works and if it is suitable for you in our review.
Established in 2016, StashAway is local-based robo-advisor offering digital wealth management that automatically customises, rebalances and optimises your investment portfolios according to your financial goals. Powered by the data-driven ERAA® framework, it builds and adjusts strategic asset allocations to navigate market volatility and changing economic conditions.
StashAway is headquartered in Singapore and regulated by the Monetary Authority of Singapore (MAS).
How does StashAway determine the type of portfolio is best for you?
After you’ve signed up for an account with StashAway, you’ll be prompted to fill up an online survey to indicate your financial situation, future goals and risk tolerance. Once the system completes the assessment of your input, its algorithm will then offer a tailored portfolio to maximise the net investment returns for your preferred risk-point.
What asset classes do StashAway invest in?
StashAway’s portfolios are built from exchange-traded funds (ETFs) due to their deep liquidity, high trading volumes, and low expense fees. ETFs are baskets of securities that track an underlying index. By investing in ETFs, you gain a diversified portfolio of securities from a range of asset classes and markets.
According to StashAway, the ETFs are selected are based on factors such as:
Size
Liquidity
Tradability
Cost-effectiveness
Low tracking error to the index
Track record
Simplicity
No ETNs
Key features of StashAway
Here are some of StashAway’s most notable features:
ERRA® stands for Economic Regime-based Asset Allocation, which is a re-optimisation tool that maintains your preferred risk level throughout any economic condition by proactively re-allocating assets.
Depending on your preference, you may either opt in or out of auto re-optimisation. If you opt in, StashAway will re-optimise your portfolio(s) automatically if need be and keep you informed via email after the process. Otherwise, StashAway will notify and recommend a re-optimisation and you may choose to proceed or leave it be.
Rebalancing vs Re-optimisation
These two terms rebalancing and re-optimisation are often (and inaccurately) used interchangeably. While they may seem similar, both are different processes:
Rebalancing. Rebalancing is the process of adjusting and re-aligning a portfolio to its target composition by buying and/or selling specific assets in the event whereby market changes cause the assets’ market value to rise and deviate from target allocations. StashAway’s algorithm ensures that its investors’ portfolios are checked daily and performs rebalancing when necessary.
Re-optimisation. With some similar traits to rebalancing, re-optimisation utilises both historical and latest data to generate capital market assumptions instead of simply gauging the portfolio components. To ensure that the portfolios’ asset allocations are optimal for various economic cycles, StashAway’s technology will automatically re-optimise the allocation if a change is identified.
Build a realistic investment plan to help achieve your financial goals in a few simple steps:
Provide your personal information (e.g. age, gender, marital status, annual income)
Choose from a few preset life goals (e.g. saving for a car, start a business, retirement), duration of investment (e.g. 5 years, 10 years, 20 years) and risk appetites (e.g. whether you’re able to lose up to 10%, 15% or more of your investment).
Depending on your selection, StashAway will offer you a customised investment portfolio and projections that reflect your goals and risk preferences.
Set up flexible standing instructions to stay on track with your investments.
Manage your money (edit, withdraw or change your investment plan) anytime from StashAway’s desktop and mobile apps.
Using a risk metric known as 99%-Value-at-Risk (VaR), StashAway is able to calculate the potential loss of a portfolio per fiscal year and determine how much risk you’ll be exposed to. This is then used to determine your portfolio’s asset allocation.
For example:
You have a customised portfolio with S$100,000 and it comes with a StashAway Risk Index of 10%. This means that there’ll be a 99% chance of not losing more than 10% of your portfolio’s value, which is S$90,000 in this case.
Start investing with no minimum deposit (for SGD deposits only) and no minimum balance (except Income Portfolio) to maintain the account.
Do note that for USD deposits, there is a minimum deposit amount of US$10,000 per deposit. Also, Income portfolio requires is a minimum balance required of S$10,000.
What research does it provide?
Stay in the loop with data-driven analysis and extensive marketresearch from StashAway:
StashAway Academy. StashAway co-founders and team offers free personal finance and investing courses such as financial planning basics to advanced insights into the company’s asset allocation investment framework.
Insights. Access invaluable market insights and latest investment news.
Types of portfolios offered by StashAway
StashAway offers three easy types of customisable portfolios for both retail and accredited investors:
Portfolio Types
Key Features
General or Goal-based Investing
Investment made in USD-denominated ETFs.
Annual management fee: 0.2% – 0.8%
Fees charged by the ETF manager: 0.2%
Caters to both low and high risk appetite. StashAway Risk Index:
Core Portfolios: 6.5% to 22%
Higher-risk Portfolios: 26% to 36%
Income Portfolio
Investment made in SGD-denominated ETFs:
Government bonds
Corporate bonds
REITs
Stocks
Projected income: 3.75%
Projected net return: 4.4% (assumes you reinvest your payouts)
S$10,000 minimum account balance
Annual management fee: 0.2% – 0.8%
Fees charged by the ETF manager: 0.4%
Moderate level of risk: 12% StashAway Risk Index
StashAway Simple™
Singapore cash management portfolio
Projected rate of 1.9% p.a. (no limit on balance)
No minimum or maximum balance
No deposit requirements or withdrawal restrictions
No management fees
0.205% net fund manager fee (embedded in projected rate)
Able to use SRS funds
Allocates assets in the following proportion to:
LionGlobal SGD Money Market Fund: 50%
LionGlobal SGD Enhanced Liquidity Fund SGD Class I Acc: 50%
Very low level of risk: 1.7% StashAway Risk Index
Pricing and fees
For General Investing, Goal-based Investing, and Income portfolios, the following annual management fee applies:
Investment amount (SGD)
Annual rate (including GST)
First $25,000
0.8%
Above $25,000 to $50,000
0.7%
Above $50,000 to $100,000
0.6%
Above $100,000 to $250,000
0.5%
Above $250,000 to $500,000
0.4%
Above $500,000 to $1,000,000
0.3%
Above $1,000,000
0.2%
Fees are accurate at the time of writing (24 May 2020).
To keep its pricing structure simple, StashAway waives most fees such as account setup or exit, withdrawals and transfers between portfolios. All portfolio rebalancing, transaction, and re-optimisation costs are also included in your portfolio’s expense ratio.
These are the approximate expense ratio charge for the various portfolios:
General and Goal-based Investing Porfolio: 0.2% p.a
Income Portfolio: 0.4% p.a.
StashAway Simple™: 0.205%
What is an Expense Ratio (ER)?
The expense ratio (ER) is an annual fee that all mutual funds or exchange-traded funds (ETFs) charge their shareholders to cover for all administrative, operational and other asset-based cost incurred by the fund.
Is StashAway safe?
To protect clients’ online trades and privacy, StashAway is equipped with security features such as:
Two-Factor Authentication. It is mandatory for users to set up two-factor authentication (2FA) during account creation. Any account updates or logins from new devices will require you to enter a One-Time-Password (OTP) sent via SMS.
Secure server infrastructure. StashAway’s systems are hosted on Amazon Web Services and equipped with intrusion detection systems for round-the-clock data protection.
How does StashAway keep my money safe?
StashAway (Asia Wealth Platform Pte. Ltd) holds a Capital Markets Services (CMS) from the Monetary Authority of Singapore (MAS), so it is mandatory for the company to be compliant with all regulations.
To ensure that all clients’ funds are safeguarded in the unlikely event of StashAway’s insolvency, the money is segregated from StashAway’s finances and held in major institutions at all times. All cash deposits will be held in a Trust Account at DBS Bank while your investable cash and securities are held in a custodian account through Saxo Capital Markets Pte Ltd or Lion Global for Simple.
Pros and cons
Advantages
Convenience. Set up or monitor your portfolio anytime on your desktop or handheld devices. Available on iOS and Android.
Low annual management fees. StashAway charges the least fees for small investments up to S$10,000 compared to its competitors.
No minimum investment. While some other robo advisors may require at least S$1,000 to S$10,000 to start, StashAway does not impose a minimum investment amount.
Clear presentation of risk. Instead of putting vague labels on an investment’s risk-level, StashAway provides a clear risk index and warning if you opt for a risk level beyond your financial means.
Disadvantages
Unable to handpick or allocate ETFs. As with most robo advisors, the biggest downside is the inability for users to choose their preferred securities.
Expensive for large volume investments. StashAway’s fees lose its competitiveness with higher investment amounts compared to other robo advisors in the market.
Overly concentrated investments in the US. StashAway invests heavily into US-listed ETFs, which comes with its own risks and costs, such as taxes for dividends and bond payouts.
How do I apply for a StashAway account?
You can apply online for a StashAway account if you’re over 18 and you’re a Singaporean, Singapore permanent resident or foreigner. To apply, simply click on the ‘Get Started’ button on the StashAway website to begin the sign-up process.
Required documents
Singaporeans/Permanent Residents:
Front and back photocopy of your NRIC
Foreigners:
Passport with at least 6 months validity
Proof of residential address (dated within the last 3 months): e.g. Teleco bills/utility bills/bank statement/letters issued by government bodies
How do I contact StashAway support?
If you have any enquiries, you may reach StashAway directly through the following contact details:
Customer support: +65 6248 0889
Monday to Friday (excluding public holidays), 9 am to 6 pm
Whatsapp: +65 6248 0889 (Typically replies within 1-2 business days)
Email: support@stashaway.sg
Bottom line
StashAway is an ideal option for those with a small starting capital since it requires no minimum investment amount, allowing you to get started with whatever spare cash you have on hand.
It also offers competitive management fees of anywhere between 0.2% to 0.8% p.a. and is a great way to gain access to an internationally diversified and macroeconomically-viable portfolio selection, especially if you’re confident in the American economy and willing to invest for the long term.
However, if you prefer having control over the type of securities to invest in, you might want to consider a traditional share trading broker instead.
You may transfer your funds via iBanking or PayNow.
No, you’re free to set as many financial goals and invest in as many portfolios as you wish in your StashAway account.
For StashAway Simple portfolio, however, you’re only allowed to have one account funded with your personal funds and another funded with your Supplementary Retirement Scheme (SRS) account.
Unlike traditional investment brokerage, StashAway is a robo advisory equipped with an algorithm designed to tailor an ideal portfolio with optimal diversification by selecting ETFs based on your selected goal, risk appetite and current economic regime. Because of this, it’ll not be possible for you to choose your preferred ETFs or allocate according to your preference.
Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.
Zyane Tan is an associate editor at Finder. An experienced copywriter and content creator, Zyane enjoys writing on a wide array of subjects. When she’s not busy typing away, she’s reading and musing over a pint.
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