You might have heard of a little robo advisor called StashAway. OK, it’s not so little — this startup has been around since 2016 and has dominated the robo advisor scene ever since.
With no minimum investment to start, affordable fees, and a beautiful, baby-bottom-smooth app, it’s no wonder StashAway has taken newbie investors by storm. You can finally grow your money in an aesthetically-pleasing way.
That said, the world of robo advisors is awfully competitive these days. Let’s take a closer look at StashAway and see how it fares amid the competition.
Disclaimer: Not a certified financial advice-giver. Just a lowly writer trying to beat inflation.
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Contents
- What are StashAway’s fees?
- How does StashAway work?
- What is StashAway Income Portfolio?
- What is StashAway Simple?
- Is StashAway safe?
- Syfe vs StashAway
- Endowus vs StashAway
- Autowealth vs StashAway
- Conclusion: Is StashAway good for beginners?
- How to sign-up for StashAway
1. What are StashAway’s fees?
Like most robo advisors, StashAway charges a percentage of the total amount you invest (rather than a fee per transaction).
Here’s an overview of StashAway’s fees.
| Total investment (SGD) | Annual fee |
|---|---|
| First $25,000 | 0.8% |
| >$25,000, up to $50,000 | 0.7% |
| >$50,000, up to $100,000 | 0.6% |
| >$100,000, up to $250,000 | 0.5% |
| >$250,000, up to $500,000 | 0.4% |
| >$500,000, up to $1,000,000 | 0.3% |
| >$1,000,000 | 0.2% |
For beginner investors, you’d be looking at 0.8% annually. This is the management fee and excludes ETF fees and forex transaction fees if any:
Now, 0.8% is reasonable to us but not the absolute cheapest, especially when there are competitors offering fees like 0.5%.
However, StashAway is one of the few robos with no barriers to entry/exit, so it’s a good one if you want to dip your toes into investing.. It’s easy to get started, there’s no minimum investment or balance, and you can withdraw the money anytime for free.
2. How does StashAway work?
StashAway invests your money in Exchange Traded Funds, or ETFs. They’re kind of like those assortment packs of candy you see at the supermarket. Through diversification, these “fun packs” reduce the risk buying the wrong candy flavour and having to eat the entire bag of it.
The normal StashAway contains ETFs from all over the world, covering every sector you can possibly imagine. These include generic ones that track entire markets, gold, bonds, and so on. According to StashAway, they select the best-in-class ETFs. Here are a handful of examples from the full list:
- iShares Core S&P 500 ETF
- Vanguard Global ex-U.S. Real Estate ETF
- iShares MSCI Japan
- The Energy Select Sector SPDR Fund
- Vanguard Real Estate ETF
- SPDR Gold Shares
- SPDR Bloomberg Barclays 1-3 Month T-Bill ETF
Before you invest, you’ll need to specify your risk tolerance. For example, if your risk level is 20% (considered “balanced” or “normal”), that means you are willing to lose up to $20 out of every $100 you invest.
From there, StashAway buys the ETFs according to your risk level. Low risk = more bonds, less stocks. High risk = less bonds, more stocks.
But your investments don’t remain stagnant in the long term. To reduce the risk of losses, StashAway uses fancy algorithms to monitor economic trends and automatically re-allocate your investments to minimise risk.
3. What is StashAway Income Portfolio?
StashAway Income Portfolio is an alternative to the “regular” StashAway. Unlike the hyper-global StashAway ETFs, the StashAway Income Portfolio focuses on Singapore only. You might even recognise its 6 component ETFs:
- ABF Singapore Bond Index Fund
- Nikko AM SGD Investment Grade Corporate Bond
- iShares Barclays USD Asia High Yield Bond Index ETF
- NikkoAM Straits Times Index ETF
- NikkoAM-StraitsTrading Asia ex Japan REIT ETF
- Lion-Phillip S-REIT ETF
The StashAway Income Portfolio is considered low risk (12% on the Risk Index) and is optimised for dividends/income rather than growth. It’s good for complementing your regular global StashAway portfolio, especially a higher-risk one.
On the other hand, it has a high minimum investment of $10,000 — so it’ll be out of reach until you have this much to invest. The same StashAway fees apply too, which is steep considering going DIY can cost a lot less.
Side note: See our guide to buying ETFs in Singapore if you’re interested in DIYing. But this is more for hands-off investing — it doesn’t make sense to go in a fiddle with your investment allocations.
4. What is StashAway Simple?
Finally, there’s StashAway Simple, which isn’t exactly an investment — more of a “cash management” account with 0% fees instead of the usual 0.8%.
Instead of putting your cash in ETFs like the above, StashAway puts it in the following low-risk funds:
- LionGlobal SGD Money Market Fund
- LionGlobal SGD Enhanced Liquidity Fund
The projected returns of 2.1% p.a. are not guaranteed. That said, it’s ultra low risk on the StashAway Risk Index.
Does that mean you should move your entire savings account over to StashAway Simple? Probably not, but if you have some funds you want to keep liquid, such as your wedding fund, you might find it useful to park it here, out of reach.
5. Is StashAway safe?
StashAway has been around for a few years, but it doesn’t have the same credentials as, say, DBS. And robo advisors have been known to shut down — Smartly, for instance, closed in 2020.
Like all robo advisors, StashAway is MAS-licensed and likes to flaunt it. However, MAS is actually more lenient on robo advisors than on other financial institutions, so to us it doesn’t mean that much.
For what it’s worth, StashAway declares that your deposits go into a DBS trust account, while your investments are held in a Saxo custodian account. We infer that, should StashAway get into financial trouble, they won’t be able to touch your assets because they’re held in different entities.
If you’re worried about putting your life savings in an “unknown” startup, you might want to consider a bank-based robo advisor like DBS digiPortfolio. Compare robo advisors on MoneySmart.
6. Syfe vs StashAway — which is better?
Like StashAway, Syfe is a robo advisor with no minimum investment, so it’s very popular with newbies. For those investing small amounts, Syfe is cheaper:
| Total investment (SGD) | StashAway | Syfe |
| First $25,000 | 0.8% | 0.65% (up to $20,000) / 0.5% (above $20,000) |
| > $25,000 to $50,000 | 0.7% | 0.5% |
| >$50,000 to $100,000 | 0.6% | 0.5% |
| >$100,000 to $250,000 | 0.5% | 0.4% |
| >$250,000 to $500,000 | 0.4% | 0.4% |
| >$500,000 to $1million | 0.3% | >0.4% |
It’s a little more complicated to use Syfe because you need to understand their portfolios and decide on which one is better.
For investing globally, we prefer StashAway because their mixed-asset portfolios are safer. Syfe’s equivalent is a 100% equity portfolio which is much higher risk and better for those who already know their stuff.
However, only Syfe has an all-REIT portfolio, which is understandably popular given Singaporeans’ obsession with real estate. So if you’re super keen on REITs, Syfe is a better choice.
- Annual Management Fees
- 0.35% - 0.65%
- Minimum Deposit
- S$0
- Platform Fees
- S$0
7. Endowus vs StashAway — which is better?
While StashAway has no minimum investment requirements, you need at least $1,000 to start an account with Endowus. Here’s a look at the fees in comparison.
| Total investment (SGD) | StashAway | Endowus |
|---|---|---|
| First $25,000 | 0.8% | 0.6% |
| >$25,000, up to $50,000 | 0.7% | 0.6% |
| >$50,000, up to $100,000 | 0.6% | 0.6% |
| >$100,000, up to $200,000 | 0.5% | 0.6% |
| >$200,000, up to $250,000 | 0.5% | 0.5% |
| >$250,000, up to $500,000 | 0.4% | 0.5% |
| >$500,000, up to $1,000,000 | 0.3% | 0.5% |
| >$1,000,000 | 0.2% | 0.35% |
Endowus charges 0.6% on everything up to $200,000, which is lower than StashAway for the most part.
But there is a huge difference in how they invest. StashAway invests in (hands-off) ETFs, while Endowus invests in (professionally managed) funds or unit trusts. The underlying fees could be very different depending on your actual portfolio.
Now, we could argue until the cows come home about whether it’s better to invest in ETFs or unit trusts, but we won’t. Both have their merits and drawbacks, so it’s really up to you, the investor, to choose what you’re comfortable with.
7. Autowealth vs StashAway — which is better?
Autowealth is one of the OG robo advisors that came on the scene around the same time as StashAway. So both robos have a decent track record and appear to follow similar investing methods.
Unlike StashAway and Syfe, which have no minimum investments, Autowealth requires at least $3,000 to start investing. It’s not as suitable as an entry-level robo advisor.
Autowealth charges a flat fee of 0.5% + US$18 no matter how much you invest. This means it’s cheaper to invest with StashAway at low amounts, but Autowealth becomes cheaper at around the $10,000 mark.
Autowealth’s main selling point is that you get a dedicated wealth manager whom you can WhatsApp anytime. So it really all comes down to personal preferences. If you’re all right with a user-friendly app and don’t need human assistance, StashAway is easier to use.
9. Conclusion: Is StashAway good for beginners?
Personally, I like StashAway a lot because it does make one form of investing very cheap and simple.
But, I would not recommend it for total investing beginners, because StashAway is basically playing in a relatively advanced space: It takes your money and invests it globally, especially in the US. Doing this comes with its own risks, and you should know them before going in.
To know if you’re ready to use StashAway (or any other robo advisor), you should ideally answer Yes to most of these questions:
- Do you already own some low-risk beginner assets e.g. Singapore Savings Bonds, regular savings plans?
- Have you explored the investment options available domestically, i.e. on SGX?
- Are you comfortable and keen to invest in global bonds and stocks?
- Do you understand the risks and costs of investing in the US, e.g. taxes for dividends and bond payouts?
- Are you ready for a long-term passive investment, where you have to basically ignore your investment for a while?
- Are you OK with having not much control over the exact details of your portfolio?
(If you have answered Yes to most or all of these, you’re actually probably not as much of a “beginner” as you think.)
In conclusion, I would recommend StashAway to at least “high beginner” investors — i.e., those who may not have had a whole lot of practical experience, but have at least enough financial understanding to really know what you’re getting into.
10. How to sign up for StashAway
Signing up is a breeze with SingPass MyInfo for verification.
Next, download the app and play with its features to set up your first portfolio. You can then start seeding the investment via either cash or your SRS funds. For cash, no CDP account is needed — just transfer via PayNow.
You can change the portfolios, open or close them, and withdraw anytime.
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Visit MoneySmart’s curated list of Best Singapore Robo Advisors 2020 and start investing today
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