- A robo-adviser is an investment management programme with minimal human intervention that aids individuals in investing
- It designs an ‘ideal’ portfolio to maximise expected returns for investors at various levels of risk
- Regular rebalancing is automatically performed to keep portfolio in its best shape to face changes in the market
- The UOBAM Invest robo-adviser is designed and supported by a team of experts that taps on UOBAM group’s institutional-grade fund management processes
The onset of the Covid-19 pandemic alongside the growing demographics of retail investors has sparked a boom in the young and competitive field of robo-investing. The growing prevalence of digital investing solutions have increased accessibility and lowered investing costs which levels the playing field for retail investors.
Many investors are increasingly aware of the existence of robo-advisers, but what exactly are they and how do robo-advisers work?
A robo-adviser is an investment management programme with minimal to moderate human intervention, that aids individuals in investing through automated, algorithm-defined methodologies.
They are usually designed around the Modern Portfolio Theory which states that there is an ‘ideal’ portfolio to maximise expected returns for investors at various levels of risk. This sets the tone for onboarding processes which first gathers an individual’s risk appetite and investment horizon before designing an appropriate investment portfolio.
After an investment portfolio has been recommended and funded, the robo-adviser executes trades to build the designed portfolio. Regular rebalancing of the portfolio is then performed automatically to ensure that the portfolio is best shaped to weather changes in market sentiments.
By making informed investing decisions through its mathematical or algorithmic programming, a robo-adviser also helps investors eliminate emotional uncertainties from their decision making processes.
However, some may bear concerns over the reliance on automation for investment management. The UOBAM Invest robo-adviser is designed and supported by a team of experts that taps on UOBAM group’s institutional-grade fund management process that has seen through decades of market volatility. Get started with UOBAM Invest and access our proprietary digital adviser platform to help you achieve your financial goals.
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