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Which robo adviser performed the best? Our Q2 results update

By Mike Narouei, Content Producer at Boring Money

22 Aug, 2018

The modern robot can do everything from hoovering the floor to caring for the elderly. Importantly for those not inclined to scour the financial pages every day, they can also do the hard work on your investments. Robo advisers offer an all-in-one investment path, based on your age and risk tolerance. However, choosing the right robo-adviser involves some work, which – as we’ve already established – you’re trying to avoid. Here, we can help.

Boring Money has collected data from 8 of the UK’s leading robo advisers as at 30th June 2018 and assessed their performance over the previous year to help you choose.

According to our analysis, the top performing robo portfolios analysed were:

While a direct investment in the FTSE 100 would have reaped higher rewards – with a return of 8.4% - this would have come with much higher volatility and price swings. Almost all portfolios would have beaten the return from a cash savings account, many of which still pay less than 1%.

In general, it was a year in which taking a risk paid off for investors. On average, higher risk portfolios returned 6.38% over the 12 month period. Robos usually offer different levels of risk to cater for what their customers are comfortable with. Compared to the previous year, here’s how things broke down for portfolios with different sorts of risk:

  • The highest ‘low risk’ portfolio analysed returned 2.49%, with the lowest returning -0.41%.

  • The highest ‘medium risk’ portfolio analysed returned 5.27%, with the lowest returning 1.88%.

  • The highest ‘high risk’ portfolio analysed returned 7.92%, with the lowest returning 4.15%.

Risk tends to be a significant consideration for those dipping a toe into the stock market. Boring Money also looked at ‘maximum drawdowns’ – the maximum fall in the value of your portfolio over a 12 month period. We found that anyone who invested £5,000 in one of the 8 higher risk robo portfolios would have suffered a potential maximum loss of between £x to £283. This compared to a maximum of £364 in the more volatile FTSE 100.

A few percent here or there doesn’t sound much over a year or so, but for someone investing £100 a month over 10 years, 3% is the difference between a pot of £14,725 at the end and £17,308. That’s a decent holiday, so select with care.

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