Investing With StashAway: How You Can Build Multiple Portfolios Through A Single Robo-Advisor
This article is republished with permission from Dollars And Sense .
25-Oct
Share!
StashAway was the first robo advisor to obtain a full capital market services licence from the Monetary Authority of Singapore (MAS) in 2017. This allows StashAway to provide investment advice to retail and accredited investors and to manage our investments.
Its assets under management (AUM), or how much investors like us have entrusted them to invest for us, has also crossed the US$1 billion mark in January 2021. Growing from its Singapore base, StashAway currently also operates in Malaysia, the Middle East and North Africa, Hong Kong and Thailand.
In general, robo advisor platforms aim to leverage technology to reduce the need for human advisors and provide a convenient digital experience. This enables StashAway to deliver more consistent investment advice and assess our risk appetite digitally to offer investors a personalised portfolio.
At the same time, StashAway charges lower management fees of 0.2% to 0.8%, without any sales fees, exit fees or platform fees. The more we invest, the lower the overall fee will be.
First $25,000 - 0.8%
Additional amount above $25,000 to $50,000 - 0.7%
Additional amount above $50,000 to $100,000 - 0.6%
Additional amount above $100,000 to $250,000 - 0.5%
Additional amount above $250,000 to $500,000 - 0.4%
Additional amount above $500,000 to $1,000,000 - 0.3%
Additional amount above $1,000,000 - 0.2%
This means StashAway's fees stack. For example, regardless of how much we are investing with StashAway, the management fee for the first $25,000 is always charged at 0.8%. If we have invested $100,000 with them, we would be paying an annual management fee of $675 ($25,000 x 0.8% + $25,000 x 0.7% + $50,000 x 0.6%).
What Can You Invest In With StashAway?
StashAway invests in Exchange Traded Funds (ETFs) with high trading volume, deep liquidity and very low expense fees. It does so to achieve broad-based diversification and enable us to invest passively - without the need to constantly monitor our portfolios.
There is no minimum deposit (in Singapore Dollars) or investment amount required. However, if we want to deposit U.S Dollars, we need to deposit a minimum of US$10,000.
StashAway has six types of portfolios that we can invest in:
#1 General Investing
– General Investing powered by StashAway
– General Investing powered by BlackRock
– Responsible Investing with ESG
#2 Income Investing
– Income Investing powered by J.P. Morgan Asset Management (JPMAM)
#3 Thematic Portfolios
– Technology Enablers
– The Future of Consumer Tech
– Healthcare Innovation
– Environment & CleanTech
#4 Singapore Investing (in Singapore bonds, equities and S-REITS)
#5 Flexible Portfolios (where you can customise you own portfolio or leverage on 4 professionally-curated portfolios)
– Risk-Focused template (providing globally diversified exposure based on your risk preference)
– World Index Tracking template (providing exposure to global markets)
– Passive Income template (providing exposure to assets that can give regular payouts)
– USD Cash-Yield (providing exposure to short-duration US government bonds with maturities between 1-3 months)
#6 Cash Management Solution
– StashAway Simple Guaranteed (Fixed deposit at MAS regulated banks)
– StashAway Simple Plus (20% LionGlobal SGD Enhanced Liquidity Fund, 20% Nikko AM Shenton Short Term Bond Fund & 60% LionGlobal Short Duration Bond Fund)
StashAway Reserve offers personalised wealth advisory to Accredited Investors – providing access to institutional-grade private investments, including Private Equity and Venture Capital, Private Credit and Angel Investing.
Investing In Multiple Goals With StashAway's General Investing Portfolios
StashAway's goal-based portfolios give us access to high-quality and globally diversified investment portfolios via U.S. Dollar-denominated ETFs.
With the StashAway platform, we can build multiple portfolios for different purposes. This allows us to work towards different goals and take on different risk levels for each type of goal. This makes sense as we may want to take a lower risk with near-term goals such as building our emergency fund, saving for our wedding or buying a home.
On the other hand, we may be able to take on more risks for goals that are decades away, such as retirement or our child's education. We may also wish to take a much higher level of risk for certain goals such as buying a vehicle if it's an expense we are able to cut back in case the investments do not perform as well as hoped.
Within each goal, we need to either decide whether:
1) we want StashAway to compute how much we need to achieve that goal (based on the number of years we have till we need to achieve the goal) or
2) we already know how much we need to set aside.
StashAway can help to estimate our goal if we are not sure where to start. For example, I wanted to estimate how much I would need to invest each month to send my child to university in about 19 years. StashAway estimates that I would need close to $117,000. To grow my portfolio into this figure in time, StashAway estimates that I would need to start investing about $200 to $250 a month today – which sounds rather doable.
We are able to set up a recurring investment amount and keep it on autopilot. We can also keep track of our progress whenever we want by logging into our StashAway account. Perhaps the best part about investing via robo advisor platform is that we can simply ramp up or stop our investments as and when we want, or even sell them, without being hit with any form of penalties.
StashAway’s Income Investing powered by J.P. Morgan Asset Management
The Income Investing powered by J.P. Morgan Asset Management (JPMAM) portfolio comprises six J.P. Morgan funds:
JPM Income Fund A (JINAASH) – 29.5%
JPM Global Bond Opportunities A (JPMGASA) – 29.5%
JPM US Aggregate Bond A (JPUAB2A) – 15%
JPM Global High Yield Bond A (JPGHYHS) – 15%
JPM Emerging Markets Debt A (JPEMDSG) – 11%
We can either opt to reinvest our dividend payouts or receive them in cash. This can be useful as younger investors may prefer to reinvest their payouts to build a larger portfolio, while older investors may prefer to use the payouts to supplement their monthly expenses.
You can choose to either have the payouts sent to your bank account or sent to your StashAway Simple portfolio. You also have the optiont to receive payouts in regular monthly, quarterly, bi-annual, or annual intervals.
Growing Cash Savings With StashAway Guaranteed, Simple & Simple Plus
Cash management accounts have become an increasingly popular investment tool as well, especially given the higher interest rate environment today. They allow us to maximise our cash savings, usually in investment accounts with brokerages or robo advisors, by ploughing them into money market funds. This way, our cash balances do not have to sit idle even when they are not invested or if we want to set them aside for emergencies. By putting these funds into a cash management account, we are able to earn a return while taking on relatively low risk.
While StashAway Guarantee does not charge any management fee, StashAway Simple and StashAway Simple Plus incurs a management fee of 0.15% and 0.2% p.a.
On the StashAway website, we can also review the projected rate of return on the cash management portfolios.
– Invested in fixed deposits at MAS-regulated banks, StashAway Simple Guaranteed has a guaranteed rate of 3.15% p.a.
– Simple currently has a projected rate of 3.5% p.a., and has 30% exposure to LionGlobal SGD Money Market Fund; and 70% exposure to LionGlobal SGD Enhanced Liquidity Fund
– StashAway Simple Plus – which allows us to take a slightly riskier position – currently has a yield-to-maturity of 3.8%. It has 20% exposure to LionGlobal SGD Enhanced Liquidity Fund, 20% exposure to Nikko AM Shenton Short Term Bond Fund, and a remaining 60% exposure to LionGlobal Short Duration Bond Fund.
One benefit of using StashAway’s cash management accounts is that we do not have to lock-in our funds for a long time just to earn a slightly higher return. While StashAway Simple and StashAway Simple Plus has not lock-in periods, StashAway Simple Guaranteed has a flexible lock-in period ranging 1 month, 3 months, 6 months and 12 months.
We cannot withdraw funds from StashAway Simple Guaranteed until its lock-in period is over. However, on StashAway Simple and StashAway Simple Plus, there are no penalties for withdrawing our funds at any point.
These cash management accounts do not require us to jump through multiple hoops to earn a better return or provide interest returns based on tiered sums kept within the account.
Of course, we need to remember that StashAway Simple and StashAway Simple Plus are ultimately an investment in money market funds and shorter duration bonds - and not a deposit account with a bank. Regardless of how low the risk is, we can lose money on investments.
Investing Your Supplementary Retirement Scheme (SRS) Funds With StashAway
The SRS scheme can be a powerful tool to aid us in accumulating a larger retirement nest egg. Similar to topping up our CPF Special Account (SA) or Retirement Account (RA) via the RSTU Scheme, we can benefit from dollar-for-dollar tax relief when topping up our SRS account.
However, unlike top-ups into our CPF accounts, any top-ups we make into our SRS account do not automatically earn us meaningful returns unless we invest them.
StashAway gives us the option to put our SRS funds into all of its investment portfolios. By just putting our SRS funds into StashAway Simple Guaranteed, we can already be better off while taking almost no risk.
Similarly, we can also take more risk (and earn a potentially higher return) by investing our SRS funds into the riskier portfolios.
Enjoy 50% Management Fees For 6 Months With StashAway
For those who are interested to try the StashAway platform for yourself, StashAway is giving 50% off in management fees for 6 months, for up to $50,000 in portfolio value.
That makes it perfect for giving StashAway a try and see if it is the robo-advisor for you. You can sign-up for free today to enjoy this exclusive promotion.