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Investing is the best way to make the most out of your income. In this digital era, making an investment becomes easier and more convenient with the help of Robo-advisors. Compared to a traditional investment firm, Robo-advisors is a new wealth management solution that offers personalized, intelligent, and flexible investing. If you are looking for such, a promising Robo-advisor named StashAway might interest you.

StashAway provides a simple and passive approach to investing. It will help you grow your money with a diversified portfolio. If you are unsure of how to proceed with this Robo-advisor, we will help you decide if you should invest with it. 

What is StashAway?

StashAway is a digital investment management platform or a Robo-advisor based in Singapore. Founded in 2016, it was the first platform that has been granted a full capital-markets services license by the Monetary Authority of Singapore. It is also the only investment platform that obtained a license from the Security Commissions in Malaysia. Over 5,000 people were on StashAway’s waitlist prior to its launch. Now that it is also available to the public, more people have been investing in this Robo-advisor. 

Stashaway logo
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Just like any other investment platform, the main purpose of StashAway is to help people invest and grow their money. They focus on solving the complexities of investing to make it easy for you to be in charge of your portfolio. It is very user-friendly and fits right into other online platforms people use every day like Netflix, Grab, or even Zalora. 

How does investing in StashAway work? 

StashAway uses a proprietary investment strategy called the Economic Regime-based Asset Allocation (ERAA). It utilizes economic trends to maximize returns at the risk level that feels right to their users. The ERAA focuses on solid economic fundamentals and monitors market trends and valuations. 

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They base their system on economic conditions and not on sporadic market activity. This data will determine the best asset allocation to maximize your income and keep your risk level constant. It will also help you make informed and intelligent management decisions for your investment portfolios. 

What makes it different from other investment strategies?

StashAway provides intelligent portfolios that have less pronounced fluctuations. With the help of their Economic Regime-based Asset Allocation, they manage risk while maximizing returns in the long term. 

  1. Their system focuses on intelligent risk management by considering your personal risk preferences, goal targets, and time horizon. It also adjusts your asset allocation to significant changes in the economic environment.
  2. No matter how much you invest or how the markets are doing, StashAway can maintain your exact risk preference while investing in multiple portfolios. They make it happen through precise fractional shares. 
  3. You can maintain the right asset allocation when an asset outperforms the others in your portfolio. Their system has an automated rebalancing to get your portfolio back on target. There is no need to pay extra because it is included in the management fee.
  4. The low fees of portfolio management make it cost-efficient. 

What are its investment features?

The investment framework of StashAway maintains your preferred risk level regardless of what happens in the markets. Its data will indicate when a new economic regime starts, like a recession, for instance. StashAway will protect your assets by adjusting your portfolio to the new economic conditions. 

  1. It provides flexible options for deposit and withdrawal. You can invest any amount into your portfolios and withdraw them without charge, whenever you prefer.
  2. StashAway is capable of multiple currencies. It converts non-USD currencies into USD for investments at just 0.1% on top of the market spot rate. StashAway currently accepts Singaporean dollar and US dollar transfers. 
  3. The diversified income portfolio helps you earn returns by sourcing income from stocks, government bonds, corporate bonds, and REITs. 
  4. StashAway complies with the Ministry of Finance making it a good platform to invest your Supplementary Retirement Scheme (SRS) funds. 
  5. It provides and manages a secure server infrastructure. All systems are monitored and other cybersecurity measures are implemented to protect your data.
  6. StashAway requires a two-factor authentication and withdrawal verification to ensure security. 

How does it compare to other Robo-advisors?

There are many Robo-advisors that exist in the market today. All of them operate on the same goal of helping investors manage portfolios on a digital platform through automation.

What sets StashAway apart from other Robo-advisors is that it invests your money globally, especially in the United States. This platform also aces by adopting a modern digital interface similar to the bigger players in the US like Betterment and Wealthfront, with simple goals, charts, and visuals.

Betterment logo
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Compared to these two Robo-advisors, StashAway’s fees are still significantly cheaper. The yearly management fees of Betterment ranges from 0.25% to 0.40% while there is no minimum balance required. There is a free year of management depending on the size of the opening deposit. While Wealthfront also charges a 0.25% management fee and ETF fees charge 0.08%

What are the modes of investment?

StashAway has two modes of investment. It can either be goal-based or not (general investing). For goal-based investment, you need to pick a goal and a feasible timeline. Then, StashAway will project an investment plan for you. 

Let’s say, for example, you want to retire early at age 45 and live on $1,000 monthly. According to this Robo-advisor, you would have to accumulate $276,000 in 12 years by investing $1,440 to $1,940 every month. It will also recommend a portfolio of 48% fixed income assets and 18% US equities, and the rest of the small percentages are divided among minor assets. 

For general investment, you can choose from either balanced (normal) or higher risk portfolios. A balanced portfolio has risk levels of up to 20% while higher-risk ones go up to 36%. This means that if you choose a 20% risk of every $100 you invest, you are willing to lose up to $20.

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How much is the minimum investment?

A distinct feature of StashAway is that there are no minimum investments, balance or upfront fees. It only applies when you use it for investing. Investors only pay a management fee of 0.2% to 0.8% annually without sales charges and approximately 0.2% in Exchange-Traded Fund (ETF) fees charged by the ETF manager. 

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You pay less than 1% per year and save 2.5 to 4.5% in fees, which go straight to returns, compared to traditional investment fees which impose 1.5 to 2% in management fees and 3 to 5% in sales charges. 

Should you invest in StashAway?

StashAway provides a simple, convenient and cheap investment option. Its low management fees are ideal for large investments of at least SGD 100,000 to SGD 2 million. The zero minimum balance makes it more cost-efficient than other investment services. This Robo-advisor also provides better transparency and control over your portfolio and transactions.

Its Economic-based Asset Allocation (ERAA) ensures knowledge and support to maximize your returns in the long term. It also helps solve common investment-related pain points. So if you are seeking to invest your money and maintain your risks, StashAway is a great Robo-advisor.

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