Roboadviser For Automated ETF Trading

Roboadvisor Returns

Automated Investment Strategies in USD with Our Robo Adviser

All roboadviser investment portfolios are automatically invested and rebalanced monthly on your behalf after you place a deposit.

All robo adviser investment portfolios are also optimised to reduce risk. Results below do not include fees and are backtested with Monte Carlo analysis.

We have three different types of strategies based on your risk profile. Once you answer a short risk questionnaire, your retirement accounts will be automatically invested on your behalf.

Robo Adviser Investment Returns

 

Please see the robo adviser investment returns below. The CAGR shows the Compound Annual Growth Return. This is how much your portfolio will grow each year over the time period. The time periods below vary depending on the ETFs used as many have a different time history, But, most portfolios below show a period of backtesting over four years. Results before this time didn't exist as some of the ETFs hadn't even launched. We also believe testing strategies in current markets rather than trying to compare it to markets in the 70s and 80s when much of  the technology stocks popular today such as Google, Facebook, Apple and Amazon didn't even exist.

The final balance shows how much a $10,000 portfolio may be expected to grow over a time period, in this case. CAGR shows average annual returns per year.

Conservative strategy - expected annualised return is around 10%. This is the least risky strategy and you can sleep at night knowing your accounts will not fluctuate wildly. This is better for the risk averse and older clients in retirement.

Balanced strategy - expected annualised return is 14%. This is a balanced risk strategy created to minimise swings in your returns by using low volatility ETFs.

Adventurous strategy - expected annualised return is 22%. When stocks fall, this strategy will likely suffer the most, but when stocks rise, your portfolio will likely outperform. This is better for risk takers and young people.

Results going forward will be different, but the strategies above consider the risk/reward return and the idea is to preserve capital whilst making gains. Results below do not include transaction fees which are small. There are no set up fees or exit fees.

 

Robo Adviser Returns in USD

 

Roboadvisor Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Conservative $10,000 $16,016 03/01/2012-27/01/2017 10% 77.4% $1,187/year, $99/month, $4.57/day 26 weeks from Apr 2012 0.95%
Balanced $10,000 $14,726 18/02/2014-27/01/2017 14% 72.3% $1,607/year, $134/month, $6.18/day 16 weeks from Dec 2015 1.49%
Adventurous $10,000 $22,343 02/01/2013-27/01/2017  22% 72.3% $3,034/year, $253/month, $12/day 32 weeks from Dec 2015 1.72%

 

 

Conservative Portfolio (The Ivy League Portfolio)

 

VWO Vanguard FTSE Emerging Markets ETF  

VEA Vanguard FTSE Developed Markets ETF  

VNQ Vanguard REIT ETF  

VGIT Vanguard Intermediate Term Government Bond ETF 

TIP iShares TIPS Bond ETF  


 

Robo Adviser Conservative Portfolio: Top Holdings

 

US treasury notes, US treasury bonds, Nestle, Novartis, Toyota, HSBC, Samsung, Royal Dutch Shell, Taiwan Semiconductor, China Mobile, Tencent, Simon Property Group, Ventas, Boston Properties, Vornado Realty and Realty Income Corp.

The IVY league portfolio is based on David Swensen's management of Yale University's endowment fund where he's generated above average returns during the past couple of decades. The amount of each ETF held is then optimized for risk each month using Minimum Variance Optimisation (MVO).The amount of each ETF held is then optimized for risk each month using Minimum Variance Optimisation (MVO).

Robo Adviser Returns & Performance Statistics in USD  

Roboadviser Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Conservative $10,000 $16,016 03/01/2012-27/01/2017 10% 77.4% $1,187/year, $99/month, $4.57/day 26 weeks from Apr 2012 0.95%

Please note there will be down months as well as up months, the statistics above show the aveage profit over the time period.


 

Balanced Portfolio (Low Volatility Portfolio)

 

XMLV Powershares S&P MidCap Low Volatility ETF

XSLV PowerShares S&P SmallCap Low Volatility ETF

USMV iShares Edge MSCI Min Vol USA ETF 

ACWV iShares Edge MSCI Min Vol Global ETF 

TMF Direxion Daily 20Yr Treasury Bull 3x Shrs ETF


 

Robo Adviser Balanced Portfolio: Top Holdings

 

Leveraged 20 year+ US Treasury Bond Swaps, Berkshire Hathaway, General Mills Inc,Paychex Inc,Procter & Gamble Co,AT&T Inc, Johnson & Johnson,Verizon Communications Inc,PepsiCo Inc,Automatic Data Processing Inc,Southern Co,Exxon Mobil Corp, Newmont mining, McDonalds, ProAssurance Corp,Northfield Bancorp Inc,Getty Realty Corp,Spire Inc and PS Business Parks Inc.

The low volatility portfolio uses a mix of low volatility stocks: stable stocks which don't fluctuate much in the small cap and large cap markets, paired with a leveraged treasury ETF as a hedge for safety. This helps target much higher performance and the strategy is optimised for risk which gives a high sharpe ratio of 0.93.

 

Robo Adviser Returns & Performance Statistics in USD  

Roboadviser Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Balanced $10,000 $14,726 18/02/2014-27/01/2017 14% 72.3% $1,607/year, $134/month, $6.18/day 16 weeks from Dec 2015 1.49%

Please note there will be down months as well as up months, the statistics above show the aveage profit over the time period.


 

Adventurous Portfolio (Health & Tech)

 

TMF Direxion Daily 20-Yr Treasury Bull 3x Shrs ETF

PNQI PowerShares Nasdaq Internet Portfolio ETF

QQQ PowerShares QQQ Technology ETF

UPRO ProShares UltraPro S&P 500 ETF

PJP PowerShares Dynamic Pharmaceuticals ETF

XBI SPDR S&P Biotech ETF


 

Robo Adviser Adventurous Portfolio: Top Holdings

 

Leveraged 20 year+ US treasury bond swaps,The Priceline Group Inc,Facebook Inc A,Amazon.com Inc, Alphabet Inc C, Baidu Inc ADR,eBay Inc, Yahoo! Inc, JD.com Inc ADR,Equinix Inc, Netflix Ctrip.com, Expedia, Twitter, Akamai, TripAdvisor Inc, Rackspace Hosting Inc, Apple Inc, Microsoft Corp, Exxon Mobil Corp, Johnson & Johnson, Spdr S&P 500 (Spy) Swap Morgan Stanley & Co. International Plc, Amazon.com Inc, Facebook Inc A, General Electric Co, Berkshire Hathaway Inc B, AT&T Inc, JPMorgan Chase & Co,Wells Fargo & Co, Procter & Gamble Co,Merck, Allergan, Amgen, Pfizer, Celgene, Gilead Sciences, Bristol-Meyers Squibb and Eli Lilly.

The adventurous portfolio is based on an ageing, growing world population as well as the new technology stocks. The portfolio is leveraged to increase returns, whilst optimised to reduce risk. The Sharpe Ratio of 1.73 is high which denotes a good risk/reward score. Ratios above 1 are seen as safer when measuring risk with the Sharpe Ratio.

The portfolio holds many of the largest blue chip companies in the USA, the largest tech companies such as Amazon, Apple, Facebook and Google, as well as the biggest pharmaceutical companies on the planet.

 

Robo Adviser Returns & Performance Statistics in USD 

Roboadviser Model Initial Investment Final Balance Test Period CAGR Winning Trades Average Profit Maximum Downtime Sharpe Ratio
Adventurous $10,000 $22,343 02/01/2013-27/01/2017  22% 72.3% $3,034/year, $253/month, $12/day 32 weeks from Dec 2015 1.72%

Please note there will be down months as well as up months, the statistics above show the aveage profit over the time period.

 


 

Are the Strategies Leveraged?

 

We make use of both leveraged ETFs (max 3x) and a "reg T" portfolio margin account. We only risk 40% of capital at any time in an account which is leveraged at 4:1. In other words, your account will be leveraged at 1.6 times your initial deposit. We feel this is one of the least risky ways to trade your account. If you have a low risk tolerance and worried that your account will fall by more than 20% in any given one year period, we highly recommend investing in our conservative strategy.  

 


 

Glossary (Terminology Explained)

 

The Compound Annual Growth Rate (CAGR) is a useful measure of growth over multiple time periods. It can be thought of as the growth rate that gets you from the initial investment value to the ending investment value if you assume that the investment has been compounding over the time period

The Standard Deviation (Std Dev) is a number used to tell how measurements for a group are spread out from the average (mean), or expected value. A low standard deviation means that most of the numbers are very close to the average. A high standard deviation means that the numbers are spread out. Max drawdown is an indicator of the risk of a portfolio chosen based on a certain strategy. It measures the largest single drop from peak to bottom in the value of a portfolio

The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratiohas become the industry standard for such calculations. It was developed by Nobel laureate William F. Sharpe. Measures above 1 are considered less risky

The Sortino ratio is a useful way for investors, analysts and portfolio managers to evaluate an investment's return for a given level of bad risk. Since this ratio uses the downside deviation as its risk measure, it addresses the problem of using total risk, or standard deviation, as upside volatility is beneficial to investors. Just like the Sharpe ratio, a higher Sortino ratio is better. When looking at two similar investments, a rational investor would prefer the one with the higher Sortino ratio because it means that the investment is earning more return per unit of bad risk that it takes on


 

Disclaimer/Performance Guide

 

  • Past performance is not a guarantee of future returns and data and other errors may exist. See Disclaimer and Terms of Use
  • The year range is automatically adjusted based on the selected year range and available return data for the specified assets
  • The annual results for 2016 are based on full calendar months from January to August
  • Mean variance optimization is based on the monthly return statistics of the selected assets, and the portfolio return statistics above use the same methodology
  • See methodology section of the FAQ for more information on mean variance optimization and its limitations
  • Expected annual return is based on annualized monthly returns
  • CAGR = Compound Annual Growth Rate
  • StdDev = Standard Deviation based on annualized standard deviation of monthly arithmetic returns (population standard deviation)
  • Sharpe and Sortino ratios are calculated and annualized from monthly excess returns over risk free rate (1month tbills)
  • Drawdowns are calculated based on monthly returns.
  • The backtested results include monthly rebalancing of portfolio assets to match the specified allocation
  • The results use total return and assume that all dividends and distributions are reinvested. Taxesand transaction fees are not included.

 

You can sign up for a free account here with our roboadviser, themoneypouch.com


 
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