[DE] Any thoughts on robo portfolios like cominvest?

[struggling123]

From the U.S. I am used to low-cost or no-cost managed or at least semi-managed robo portfolios (e.g. Charles Schwab). I now came across "cominvest" (link in German) by Commerzbank/comdirect in Germany. Basically, you set an amount and your risk profile and the banks systems take care of the rest, including rebalancing. Pricing in this case is .12% per month for fully automatic, .009 for semi-automatic (where you have to manually execute the suggested trades). In both cases transaction costs are included.

What are your thoughts on this? Sure, that's cost one could avoid, but I sort of like the extreme ease of it all...

 

[sizouze]

@struggling123 I am currently testing out Scalable Capital, Whitebox, Vaamo, Fintego and Sutor Bank with my own money. I like the simplicity, you don't lay awake at night thinking about which ETF to buy. They pay your taxes for you and you don't pay anything extra when depositing or withdrawing.

That said, the cost is obviously higher then doing it all manually with an online broker.

Vaamo, Fintego and Sutor Bank are 100% passive. They won't buy/sell anything unless you deposit/withdraw.

Whitebox and Scalable Capital are active investors, though. As far as I know Whitebox doesn't have a set strategy for this. They did it once in the last 4 months if I remember correctly. Scalable Capital does this way more often (I'm guessing once per month). Their strategy is to sell ETFs when they become very volatile (in which direction doesn't matter) and rebuying them when they aren't volatile anymore.

Here's a nice comparison of current german Robo-Advisors
(Website in German)

 

[struggling123]

@sizouze Awesome, thanks for your input and the link!

 

[resjudicata]

@sizouze Interesting. Are you writing about this somewhere?

I'm asking because a typical investor would not sign up with 5 different assets managers with a somewhat comparable product.

 

[sizouze]

@resjudicata I thought about that but don't have the time right now. I just did it to diversify because Robo Advisors are still very new in Germany and although my money is legally save in case one of them goes bankrupt, it is gone if one of them suddenly goes crazy and does anything dumb with it. I've seen crazier things happen so this is just me spreading the risk because I'm investing in a new business model.

 

[89elewis]

@struggling123 Hold on, let me get this straight..

When I tried to setup a monthly savings plan (Sparplan) in "cominvest", they are offering me a portfolio with 3 ETFs. I could choose these 3 ETFs from the exact same set of ETFs that are available for a normal savings plan in comdirect. The transaction costs are exactly the same (Lyxor/comstage for free; 1.5% for the rest).

Then, why am I paying the additional 0.125%? So that some fancy algorithm tries to "intelligently" decide how much % allocation should be made for that month for each of the 3 ETFs in my portfolio?

Instead I could just setup 3 Sparplans and then once a year (or even once in 2-3 years), I can make one-off purchases to re-balance the portfolio. Doing so will cost me < €15 in transaction costs, assuming I invest €300 monthly. Ideally, I could also adjust the savings rates for future so that they re-balance themselves automatically. This way would cost me €0 in fees.

In comparison, the "Robo Advisor" takes €54 away from my investment in fees (per year for a savings rate of €300 monthly). No Thanks! I don't mind checking my portfolio once a year or two and try to rebalance it.

 

[resjudicata]

@89elewis

Then, why am I paying the additional 0.125%? So that some fancy algorithm tries to "intelligently" decide how much % allocation should be made for that month for each of the 3 ETFs in my portfolio?

You are right. IIRC, cominvest has active and passive mode. In passive mode, they do what you describe. Essentially do nothing except for suggesting a number of ETFs (which is essentially public knowledge, other banks or websites do this for free).

cominvest has also an active mode, which automatically executes trades (for rebalancing or what not). So, there's some value, but still very expensive.

Have a look at Scalable or Whitebox. They are cheaper than cominvest in active mode and do something on a regular basis. (It remains to be seen how good their strategy is, but they do have a strategy and can execute it)

 

[struggling123]

@89elewis You're not wrong. Thanks for yor input!

 

[alanpartridge]

@struggling123 One think that makes me suspicious of such solutions - if their automatic solution is so perfect, why give it out to anyone? Why wouldn't they simply invest their own money and kept the program a secret?

EDIT: I was wrong. Thanks for informing me about what this actually is.

 

[tanasee]

@alanpartridge They are not selling anything secret here. All this thing is doing are automatic investments in ETFs with automated rebalancing for a fee.

This is not some mystic trading algo that makes money out of nothing, this is just a simple "survey-tool" to calculate your assets allocation based on your risk profile and then a regular auto invest (Sparplan).

 

[struggling123]

@alanpartridge Well this thing isn't about any magic technology - it only automatically executes a portfolio of ETFs.

 

[kev40]

@alanpartridge My assumption: Banking industry is currently not doing really well (look at German bank stocks in last years) so they are trying to provide new services to increase their user base and money flow

 

[asaph13]

@alanpartridge Because they pick the ETFs that get funds, right? So there's plenty of room for collusion and what not, and by using your money it removes the banks liability