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Couple that with the digital age we are in — and you’ll get a proliferation of robo-advisory services. This is one key indicator that people are looking for a simple solution to growing their money without all the perceived complications of investing.
In case you’re new to the term robo-advisor, it just means that instead of a human financial advisor, this is a robot that provides digital financial advice and investment management based on mathematical rules or algorithms. Of course, there’s human input from time to time, and the bot is based on sound financial insight from experts.
One of the newest players in the robo-advisory space is DBS digiPortfolio. We wrote a blog post in October to help you get started, when we managed to get early access.
Now that it’s been a few months on, let’s delve deeper into the raison d’être of DBS digiPortfolio: How it’s tailored to enable total investment n00bs to start their financial journey, why it’s a good (and super easy yet sophisticated) tool to kick start or complement your investment goals, and what makes it stand out from other robo-advisors out there right now.
DBS digiPortfolio has an easy-to-follow structure
Forget jumping through multiple hoops and menus before finally reaching the sign-up page. And if you are still procrastinating on opening your CDP account (or haven’t the faintest idea what that stands for), DBS digiPortfolio removes that step too.
Since most of us own a DBS account anyway, just login to ibanking and when you click on the Invest tab, you’ll see digiPortfolio on the drop-down menu. It’s generally really simple and I quickly got myself an Asia portfolio in a few minutes, barring a few things like signing up for a DBS multi-currency account (this was done real quick in a minute online, I didn’t even need to head out and queue at the nearest DBS branch), and then transferring the minimum investment sum of S$1,000 to that account (do note that the DBS multi-currency account has a fall-below service fee of $7.50/month should the funds in the account fall below the minimum average daily balance of S$3,000 — this S$3,000 is based on the total SGD equivalent of SGD and foreign currency balances, but the fall-below service fee will be waived for customers up till 29 years old).
To help me along, there were easy-to-read instructions and at-a-glance graphs showing the projected performance (poor, average, strong) to help me decide on my risk appetite (I chose the Comfy Cruisin’ Level 3, more on that later). There are even sliders with my projected investment amount and my projected earnings to help me visualise my potential returns along the way. It literally took me a few clicks, and I was all set.
The beauty about getting an Asia portfolio on DBS digiPortfolio means no pre-qualification is required. So there’s basically a very low barrier to entry.
And there’s only one easy charge to remember — a 0.75% per annum assets under management (AUM) fee, based on your portfolio value. This amounts to just S$7.50 per year should my portfolio remain at S$1,000. So if I could potentially earn a very conservative 6% on my initial sum per annum, I still gain overall.
According to DBS, there are no other sales charges, platform fees, switching fees, withdrawal fees or closure fees. The 0.75% p.a. management fee goes towards the research, investment strategy, market monitoring and rebalancing of the digiPortfolio and is charged once a year, or at the time of portfolio closure.
DBS digiPortfolio is flexible
Remember I mentioned risk appetite earlier on? Well, there are helpful 3 levels to choose from, each comprising a preset basket of investment instruments, including Singapore-listed ETFs (exchange traded funds) focused on Singapore, India, China, cash, and fixed income (i.e. bonds).
Here’s a brief overview:
- Fixed income instruments tend to be more stable, but these usually chart slower growth.
- Equities like stocks and shares can give higher potential returns but are also prone to higher volatility and potential losses.
- And good ‘ol cash, that DBS uses as a buffer to take advantage of market opportunities and to cover the annual management fee.
Slow n’ Steady (Risk Level 2)
15% — in equities
80% — in fixed-income instruments
5% — in cash
Comfy Cruisin’ (Risk Level 3)
50% — in equities
45% — in fixed income instruments
5% — in cash
Fast n’ Furious (Risk Level 4)
75% — in equities
20% — in fixed income instruments
5% — in cash
DBS digiPortfolio helpfully lists down all the investment instruments they use, kudos to them for transparency! Read the full details of the exact investment portfolio in our introductory blog post on the DBS digiPortfolio.
For now, I’ve put in S$1,000 with Level 3, but I have the flexibility to create more portfolios (it’s even quicker and simpler than setting up your first) with DBS digiPortfolio, tailored to my various investment goals (yes, you can run concurrent portfolios at a time, each with its own risk level). Perhaps I want to hold something long-term, so I will create a Level 2 portfolio. Or I have some spare cash that I want to make a profit of quickly, so I will opt for the Level 4 portfolio.
If needed, I can also close my digiPortfolio online (there’s no lock-in period!), though it takes a few days for them to complete the selling process and credit the money back to my DBS account.
At this point in time, I cannot top-up or withdraw a partial sum from each portfolio once created. However, once this capability is implemented (in the near future), DBS digiPortfolio will have another winning quality as there are no additional fees to pay — other than your 0.75% p.a. AUM — as compared to other products where you need to pay each time you enter the market.
The human touch makes DBS digiPortfolio stand out from other robo-advisors
This aspect of DBS digiPortfolio really helps me feel much more assured. Instead of 100% entrusting my hard-earned money to a robot, there are actual human financial experts to make adjustments when the market moves. Plus DBS is a trusted brand name and is probably the bank with the highest number of deposits in Singapore. So yes, this ticks all my boxes.
For digiPortfolio, DBS has tapped its elite team of portfolio managers, whose expertise was previously accessible only to investment sums of S$500,000 and above. So yes, these are the financial experts who deal with the high-rollers’ money and now they pitch in for digiPortfolio too.
According to DBS, these portfolio managers carefully select ETFs to create quality portfolios. Just so you know, some of the ETFs in the preset Asia profiles include the Nikko AM STI ETF, which is one of the top 7 ETFs in Singapore.
The team also monitors the market regularly, to align digiPortfolio with DBS’ chief investment office’s views to ensure optimal asset allocation and portfolio resilience, and initiating rebalancing whenever necessary.
Easily ‘level-up’ to the global portfolio when you’re more experienced
Once you are ready for global exposure, you can open a global portfolio. You will need some financial knowledge, and there is a short questionnaire to ascertain that you are ready.
You can open a global portfolio if you already have an Asia portfolio and vice versa. The key difference is that the global portfolio trades in USD, so you’ll be subject to fluctuating Forex rates but you’ll have global exposure plus there are no additional stamp duties to pay, just the 0.75% p.a. AUM.
Just to give you an idea of what you need to “level-up”, here are the statements you’ll be presented with when you want to open a global portfolio (you’ll need to answer “yes” to one of the options to qualify):
- I have a diploma or higher qualification in finance, business, or accounting.
- I have a professional finance qualification (Eg. CFA, or ACCA).
- In the last 10 years, I have at least 3 consecutive years of working experience in finance or accounting.
- In the past 3 years, I have transacted at least 6 times in one or more of the following listed specified investment products.
- I have none of the above.
How does DBS digiPortfolio stack up against other robo-advisors?
Here’s a quick table, replicated from our previous blog post:
|Robo advisor||Fees per year (for $10,000)||Minimum investment|
|DBS digiPortfolio||0.75% ($75)||S$1,000 or US$1,000|
|AutoWealth||0.5% + US$18 (~$75)||S$3,000|
|OCBC RoboInvest||0.88% ($88)||US$2,500|
|UTrade Robo||0.88% ($88)||S$5,000|
So why should you consider the DBS digiPortfolio?
Here are some TL;DR key takeaways:
- It’s great for total beginners
- Largely hassle-free sign-up process
- Most of us have a DBS account anyway
- Just $1,000 to get started
- Management fee of just a flat 0.75% p.a., one of the lowest in the market
- DBS is a trusted bank with a proven track record
- You don’t need to have a CDP account, even for the global portfolio
- No lock-in period
- Low barrier to entry (in terms of $, paperwork and knowledge)
- There are actual human experts looking at it and making tweaks from time to time
So, if you have been holding off on starting your investment journey, DBS digiPortfolio just removes all inertia. At this low minimum investment amount, it really makes no sense to not start growing your money for the future.
Click here to find out more and to get started on DBS digiPortfolio.
What holds you back from investing and does this new product from DBS help to address that? Let us know in the comments below!
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This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability. All investments come with risks and you can lose money on your investment. Invest only if you understand and can monitor your investment. Diversify your investments and avoid investing a large portion of your money in a single product issuer. This advertisement has not been reviewed by the Monetary Authority of Singapore.
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