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Robo-Advisor Performance Review: 2H2022

by Apoorv Trivedi on
Robo Advisor Featured

The Bottom Line

Robo-advisors in Singapore had a mixed 2H2022 with half of them outperforming the benchmarks with their flagship portfolios and half underperforming.

MoneyOwl had the best outcome with the all-equity Dimensional portfolio beating the benchmark MSCI All-Country World Index by 3.6% and the traditional 60:40 Balanced portfolio beating its benchmark by 3.1%.

Endowus was a close second with the Flagship Very Aggressive portfolio outperforming its benchmark by 1.7% and the Flagship Balanced portfolio by 3.6%.

Robo-advisors’ thematic portfolios had bombed in 1H2022 but they had a more mixed 2H2022. While the Tech portfolios continued to do poorly, their Income and ESG themed portfolios did better than benchmarks.

We recommend ignoring short term performance and investing bulk of your portfolio in passive strategies.

Endowus remains our preferred Robo-Advisor in Singapore due to a relatively passive approach, better user experience and an option to invest CPF funds.

Table 1: Robo Portfolios’ Performance vs. Benchmark – 2H2022

Robo-Advisor All Equity Balanced Tech ESG Income
Endowus 1.70% 3.56% 1.02% 4.06% 6.61%
Syfe -1.89% -2.82% -3.39% 1.20% 5.78%
StashAway -1.52% -1.22% -6.05% -4.49%
digiPortfolio 0.22% 1.18%
Kristal -1.94% -1.23%
MoneyOwl 3.57% 3.12% 0.54%
Average -0.69% -0.11% -2.81% 0.25% 4.31%
Note: Positive figures imply the portfolio outperformed its benchmark while negative figures show underperformance. These are not actual performance figures. See tables 3 – 12 for actual performance figures.

* Equity : Fixed Income

Table 2: Robo Portfolios’ Performance vs. Benchmark – 2022

Robo-Advisor All Equity Balanced Tech ESG Income
Endowus 3.49% 2.91% -8.98% -0.61% 3.03%
Syfe 2.66% -1.68% -9.64% 2.88% 3.40%
StashAway 0.59% 1.18% -15.79% -2.51%
digiPortfolio 2.18% 2.64%
Kristal -2.58% 1.50%
MoneyOwl 1.43% -0.52% 5.24%
Average 1.27% 1.31% -11.47% -0.08% 3.22%
Note: Positive figures imply the portfolio outperformed its benchmark while negative figures show underperformance. These are not actual performance figures. See tables 3 – 12 for actual performance figures.

* Equity : Fixed Income

Our pick - Endowus
Endowus
The Best Robo-Advisor in Singapore

On Endowus, you can easily invest all your money, including eligible CPF funds, in low-cost, globally diversified passive portfolios that are appropriate for your risk appetite.


Good Riddance 2022!

As with the 1H2022, both equity and bond markets were down in 2H2022 although, thankfully, the losses moderated somewhat. 2022 was very unusual compared to recent history because both, the equity and the fixed income market were down in double digits.

In the last 95 years at least, there hasn’t been another year where both asset classes were down so much simultaneously. In fact, 2022 was the worst year for the bond market since at least 1928.

Q4 2022 Market Returns
Source: StashAway

As this chart from StashAway shows, global equities and bonds were both down almost an identical 18% last year.

There have been a couple of years where both asset classes have been down. But in 2001, the first such year since 1985, bonds were down only 1% while in 2015 equities were down only 0.3%.

So if your portfolio lost money in 2022, you can take some comfort in knowing that you are not alone. Nearly everyone did.


Robo Advisor Performance Review: 2H2022

The top 3 Robo Advisors in Singapore usually put out notes reviewing their quarterly performance, which forms the basis for our comparison. The 4Q review from Syfe is still not out but we were able to get most of the data for our comparison on their website. Endowus and StashAway have already posted their reviews.

Apart from these reviews, we were able to get adequate information for a comparison on the websites of a couple more Robos. Given the abysmal markets, it’s no surprise that all the portfolios were down in 2022 and nearly all were also down in 2H2022.

Robo Advisors are still quite new and their products and portfolios are still evolving so we didn’t find enough data to do a meaningful comparison of their longer term performance, say over 3 years or 5 years. We should start seeing that data in another year or so.


How we compared

We picked 6 different types of portfolios where we were able to compare performance across at least 3 Robo Advisors in each case – 2 flagship portfolios, 3 thematic portfolios and a money market alternative portfolio.

For the flagship portfolios, we looked at the highest risk portfolio offered by each Robo and a balanced portfolio which was most similar to the traditional 60:40 Equity: Fixed income portfolio.

For the thematic portfolios, we looked at Technology, ESG  and Income portfolios, which are each offered by 3-4 Robos.

We used SGD returns where provided by the Robo and adjusted the returns for the SGD appreciation of 0.6% in 2H2022 if only the USD return was provided.

We also believe that all the performance numbers factor in the impact of the fees charged by the Robos. However this was not clearly specified by some of the Robo Advisors.

Each Robo Advisor uses a different benchmark to evaluate their own performance. Since we don’t know how these benchmarks are constructed, we used our own benchmarks for the flagship and technology portfolios.

For the equity portion of the flagship portfolios, we used MSCI All-Country World Index (ACWI) as the benchmark. This index tracks the performance all major stock markets globally. Some Robos prefer the MSCI World, which only tracks the developed countries.

Since the average investor in Singapore has the option of investing in emerging markets like China and India, we feel the MSCI ACWI is a better choice.

For the Tech thematic portfolios we used the NASDAQ as the benchmark.

For the Fixed Income portion of the portfolio, we couldn’t find a good global bond index with historical performance data (although FTSE, Bloomberg etc. have a few behind paywalls). So we created a portfolio of two ETFs – IUSB and BNDX with a 60:40 ratio. IUSB is an ETF that tracks the total return of US Bond market while BNDX does so for International Bonds ex-US.

We then created a benchmark for each Robo based on the mix of Equity and Fixed income each of their portfolios. This was necessary because the asset mixes of the portfolios we compared were often quite different. So using the same benchmark did not seem right.

For instance the highest risk flagship portfolio at Endowus and Syfe have 100% Equity allocation. This is 89% for StashAway, 80% for DBS digiPortfolio and 77% for Kristal.

Without this adjustment, the portfolios with a higher equity allocations may appear to outperform in bull markets and may underperform in bear markets. Since the risk profile of a 100% Equity portfolio is quite different from an 81% Equity portfolio, we felt the need to adjust the benchmarks similarly.

This is why you see different benchmark performance numbers in the tables below. To be clear, this adjustment is not very scientific but is the best we could do for now.


Flagship All-Equity Portfolios

The MSCI ACWI was down 2.33% in 2H2022 and unusually for a falling market, our bond market proxy benchmark was down more, 7.45%. The high-risk, equity heavy portfolio from the Robo-advisors were down 3.57% in 2H2022 on average.

Table 3: Performance of highest risk Flagship Portfolios in 2H2022

Robo-Advisor 2H2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -0.63% 100:0 -2.33% 1.70%
Syfe -4.22% 100:0 -2.33% -1.89%
StashAway -4.42% 89:11 -2.89% -1.52%
digiPortfolio -3.14% 80:20 -3.35% 0.22%
Kristal -5.44% 77:23 -3.51% -1.94%
MoneyOwl 1.24% 100:0 -2.33% 3.57%
Average -3.57% -2.88% -0.69%
* Equity : Fixed Income

In both absolute and relative to benchmark terms, MoneyOwl’s Dimensional Equity portfolio did the best, as it was up 1.24% for the half year and it outperformed our benchmark (ACWI, down 2.33%) by a strong 3.57%. Endowus was next best with their flagship, all-equity portfolio down 0nly 0.63%.

Both MoneyOwl and Endowus rely heavily on Dimensional Fund Advisors’ funds to construct their portfolios, so its not surprising that both are showing up at the same end of performance spectrum.

Table 4: Performance of highest risk Flagship Portfolios in FY2022

Robo-Advisor 2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -16.90% 100:0 -20.39% 3.49%
Syfe -17.73% 100:0 -20.39% 2.66%
StashAway -19.23% 89:11 -19.82% 0.59%
digiPortfolio -17.17% 80:20 -19.35% 2.18%
Kristal -21.77% 77:23 -19.19% -2.58%
MoneyOwl -18.96% 100:0 -20.39% 1.43%
Average -18.56% -19.83% 1.27%
* Equity : Fixed Income

For the full year of 2022, most Robos outperformed the market in this category with Endowus in the lead, followed by Syfe.


Flagship Balanced Portfolios

The Robos did a little worse with their Balanced or equivalent portfolios. They were down 4.66% on average with 3 of 6 Robos doing better than the benchmark.

Table 5: Performance of Balanced Flagship Portfolios in 2H2022

Robo-Advisor 2H2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -0.82% 60:40 -4.38% 3.56%
Syfe -7.71% 50:50 -4.89% -2.82%
StashAway -5.85% 55:45 -4.64% -1.22%
digiPortfolio -3.46% 55:45 -4.64% 1.18%
Kristal -5.46% 63:37 -4.23% -1.23%
MoneyOwl -1.26% 60:40 -4.38% 3.12%
Average -4.66% -4.55% -0.11%
* Equity : Fixed Income

The Endowus 60:40 Flagship Cash portfolio did the best here, outperforming by 3.56% and ending the half down only 0.82%. As with the all-equity portoflio, MoneyOwl and DBS digiPortfolio were the other two Robos to do better than the benchmark, while the rest underperformed.

Table 6: Performance of Balanced Flagship Portfolios in 2022

Robo-Advisor 2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -15.40% 60:40 -18.31% 2.91%
Syfe -19.48% 50:50 -17.79% -1.68%
StashAway -16.87% 55:45 -18.05% 1.18%
digiPortfolio -15.41% 55:45 -18.05% 2.64%
Kristal -16.96% 63:37 -18.47% 1.50%
MoneyOwl -18.83% 60:40 -18.31% -0.52%
Average -16.82% -18.13% 1.31%
* Equity : Fixed Income

For the full year, 4 of 6 Robos did better than our benchmark. Endowus beat it by 2.91% while DBS digiPortfolio was close behind with 2.64% outperformance.


Technology Thematic Portfolios

As in 1H2022, the performance of Technology thematic portfolios wasn’t great in 2H2022. After falling an average 32.6% the first half of the year, they dropped another 11.1% in the second half with only Endowus doing better than our benchmark.

Table 7: Performance of Technology Thematic Portfolios in 2H2022

Robo-Advisor 2H2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -7.37% 100:0 -8.39% 1.02%
Syfe -11.78% 100:0 -8.39% -3.39%
StashAway -14.11% 64:36 -8.05% -6.05%
Average -11.08% -8.28% -2.81%
* Equity : Fixed Income

StashAway’s 45% SRI Tech Enablers portfolio had a 36% fixed income allocation at the end of 2H2022. So we adjusted our benchmarks for them to include similar allocation of Fixed Income and NASDAQ respectively. However this portfolio had a 28% fixed income allocation at the end of 1H2022.

This big swing in asset allocation makes it hard to accurately compare their performance against a benchmark.

Another issue here is that some of the performance numbers for 1H seem to have been revised. For instance, Endowus reported a -23.8% performance for their Tech portfolio in 2Q2022. However in the 4Q2022 report, this has been revised to -27.4%. We have used the revised figures here but have left our original post for 1H2022, which used the old figures, unchanged.

Table 8: Performance of Technology Thematic Portfolios in 2022

Robo-Advisor 2H2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -42.50% 100:0 -33.52% -8.98%
Syfe -43.16% 100:0 -33.52% -9.64%
StashAway -42.71% 64:36 -26.92% -15.79%
Average -42.79% -31.32% -11.47%
* Equity : Fixed Income

For the full year, all tech thematic portfolios were down about 43%, a whopping 11.5% worse than the benchmark.


ESG Portfolios

For ESG Portfolios, we used MSCI ACWI as the benchmark because all Robos now have nearly 100% equity allocation in these portfolio. In 1H2022, StashAway had a 16% fixed income allocation in this portfolio.

Table 9: Performance of ESG Thematic Portfolios in 2H2022

Robo-Advisor 2H2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus 1.73% 100:0 -2.33% 4.06%
Syfe -1.13% 100:0 -2.33% 1.20%
StashAway -6.82% 100:0 -2.33% -4.49%
Average -2.07% -2.33% 0.25%
* Equity : Fixed Income

Endowus’ ESG portfolio did the best in relative terms here, outperforming the benchmark by 4.06%.

Table 10: Performance of ESG Thematic Portfolios in 2022

Robo-Advisor 2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -21.00% 100:0 -20.39% -0.61%
Syfe -17.51% 100:0 -20.39% 2.88%
StashAway -19.40% 100:0 -16.89% -2.51%
Average -19.30% -19.22% -0.08%
* Equity : Fixed Income

StashAway’s Responsible Investing portfolios were launched on 19 Jan 2022. MSCI ACWI was down 3.5% between 31 Dec 2021 and 19 Jan 2022. We adjusted the benchmark for StashAway to reflect this.

For the full year, only Syfe’s ESG portfolio did better than the benchmark.


Income Portfolios

4 Robos now offer some form of Income focused portfolios. Typically these focus on high dividend yielding stocks, REITs and higher yielding corporate bonds, often with a high income distribution.

Of the 4, StashAway has only disclosed performance data in Q4, while the remaining Robos have a full year of history. We should be able to include StashAway in this table from next year.

One caveat for this comparison is that the WiseSaver portfolio from MoneyOwl has a 62% equity allocation (32% equity and 30% REITs).

Other Robos have much lower equity allocation in these portfolios – Syfe has 15% while Endowus has 3 options ranging from 0-40% equity allocation (we used the one with 20% equity in the table below). This huge difference means the performance comparison below may not be very accurate.

Table 11: Performance of Income Portfolios in 2H2022

Robo-Advisor 2H2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus 0.18% 20:80 -6.43% 6.61%
Syfe -0.91% 15:85 -6.69% 5.78%
MoneyOwl -3.74% 62:38 -4.28% 0.54%
Average -1.49% -5.80% 4.31%
* Equity : Fixed Income

In 2H2022, our bond benchmark was down 7.45% while the equity benchmark was down 2.33%. So it was a little surprising to see that MoneyOwl WiseSaver did worse than the other two despite its higher equity allocation.

Table 12: Performance of Income Portfolios in 2022

Robo-Advisor 2022
Performance
Asset Class
Mix*
Benchmark % Relative
Performance
Endowus -13.20% 20:80 -16.23% 3.03%
Syfe -12.58% 15:85 -15.98% 3.40%
MoneyOwl -13.18% 62:38 -18.42% 5.24%
Average -12.89% -16.11% 3.22%
* Equity : Fixed Income

For the full year all 3 portfolios outperformed the benchmark comfortably, although all were down about 13% for the year.


Cash Portfolios

Many Robos now offer multiple cash management portfolios. Here we have only compared the performance of the lowest risk / lowest yield portfolio they offer.

Table 13: Performance of Cash Portfolios in 2H2022

Robo-Advisor 2H2022
Performance
Endowus Cash Smart Secure 1.13%
Syfe Cash+ 0.91%
StashAway Simple 0.91%
MoneyOwl WiseSaver 1.26%

StashAway & Syfe did not disclose the performance of their money market type funds. However they both have identical underlying funds in these portfolios. So we were able to use the performance figures of the underlying funds to estimate the performance of these portfolios.

Table 14: Performance of Cash Portfolios in 2H2022

Robo-Advisor 2022
Performance
2023
Projected Yield
Endowus Cash Smart Secure 1.59% 3.3 – 3.6%
Syfe Cash+ 1.47% 3%
StashAway Simple 1.47% 2.8%
MoneyOwl WiseSaver 1.43% 4.01%


How to think about performance?

Investors should focus on the investment process followed by the platform or funds they invest in. Short-term performance (daily, monthly or even annual) is of very little use in understanding how the platform will perform over a longer period of time.

There are thousands of funds, managed portfolios and thematic ETFs available to us for investing. Just as most of us have no ability to consistently pick the best stocks, we also have no ability to know which manager or platform is going to outperform the market.

2022 makes for a great case study for this. While the flagship portfolios of most Robos did better than the benchmarks in 1H2022, only half of them could do so in 2H2022. Most of them did manage to outperform by a fair bit for the full year but they are got absolutely destroyed in their Tech portfolios, underperforming by 11.5% in the full year. The results of other thematic portfolios were mixed.

This is why we recommend a passive strategy for the bulk of your investable assets.

However none of the Robos in Singapore offers a truly passive option, especially for CPFIS.

Endowus and MoneyOwl come the closest but even their flagship portfolios carry factor tilts in underlying funds and their CPFIS portfolios are built using actively managed funds.

We think retail investors should allocate the bulk of their portfolios to passive strategies and think of the rest as being a part of their entertainment budget.

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