ESTABLY VS CLASSIC ROBO ADVISORS
What distinguishes us from classic Robo Advisors?
July 22, 2020 | Digital Asset Management
Thanks to its low minimum investment amount and ease of use, Robo Advisor offers a good opportunity to invest in a wide range of equity markets. Unfortunately, the core element – investment expertise – is often neglected by many providers. Estably was born from this insight.
Uncomplicated, transparent… profitable?
A real added value is the ease of use that most Robo Advisors offer their customers. You can easily open a portfolio at any time and from anywhere – even after closing, you keep a digital eye on your portfolio. The low minimum investment of €500 allows even the smallest investors to get a first taste of the stock markets.
Computer-controlled algorithms are responsible for investment decisions at most providers. Most of these algorithms carry out a simple rebalancing of assets, some attempt to minimise risk and fluctuations and time the market based on historical data and calculation models.
In our opinion, however, the algorithms are not yet mature enough to make targeted good investments and achieve satisfactory returns. Computer-based algorithms are currently not able to take into account the complex mechanisms of the markets and to assess companies based on their business models, strategies or managers. AI experts such as Anand Rao of PriceWaterhouse Coopers also emphasize that artificial intelligence still faces major challenges, especially in unpredictable markets.
One example::
A manager plans to integrate another company. This statement was communicated to shareholders and investors in a conference call. How should an algorithm find this important information and evaluate the manager’s strategic decision for the company? What will the company be worth after the merger? What are the effects on the profitability of the company? No algorithm asks these questions and the questions resulting from them.
Therefore hardly any Robo Advisor manages to perform better than the average. Due to their passive investment strategy, most providers are satisfied with average returns right from the start and do not even try to perform better than the market. A look at the yield rankings of the comparison portals also shows this.
Artificial intelligence and algorithms make our lives easier every day – but we believe that no robot can yet replace the expertise and analytical capabilities of human portfolio managers..
Robo Advisor with focus on performance
Our idea is to adapt and further develop the advantages of the already existing Robo Advisor. Our customers should get the typical usability and transparency of the existing providers, but not have to forego better returns. As a digital asset manager, Estably’s top priority is investment expertise and thus the growth of your assets.
Instead of computer-controlled algorithms, we therefore prefer to rely on our experienced portfolio managers of flesh and blood, who have been generating above-average returns for many years with the Value Investing strategy. Unlike most of our competitors, we do not invest in a broad market via ETFs or passive funds. We buy carefully selected individual securities (stocks and bonds) into your own portfolio, making you direct owners of high-quality companies.
Since most Robo Advisor acquires entire market shares through products such as ETFs, they are forced to buy both “winner” and “loser” stocks. Our strategy, on the other hand, allows us to avoid buying poor-performing companies in the first place and to invest your assets more effectively and selectively in fewer, higher-quality companies.
Higher minimum investment amount than our competitors
Compared to other Robo Advisor, the minimum investment amount is higher at Estably. However, if you compare us (appropriately) with a classic asset management company, the minimum investment is many times lower.
Up to now, an investment with an active value investing strategy through asset management was reserved exclusively for wealthy clients from several hundred thousand Euros upwards. Estably now offers for the first time the same advantages of this investment style to smaller investors starting from €20.000,-, extended by the digital comfort.
The main differences at a glance
| Estably | Classic Robo Advisor | |
|---|---|---|
| Investments | Individual stocks & Bonds | ETFs, Index funds |
| Strategy | Active | Passive |
| Investing done by | Our portfolio managers | CPU based algorithms |
| Account opening | Digital | Digital |
| Costs | 1,2% p.a. | Ø 1,17% p.a. |
| Returns
Value 30 (moderate) Value 60 (growth) Value 100 (Chance) |
(36 Months)
+17,44% +32,49% +35,56% |
(36 Months)
depending on the strategy: -5,46% bis +19,77% |
| Minimum investment | €20.000,- | €500,- |
What’s important to you?
Are you looking for a low-cost investment that automatically invests in markets and products from a small investment amount? Then you can choose one of the common Robo Advisor.
If, on the other hand, you want to invest your money in outstanding companies with a view to achieving a good return, then you’ve come to the right place!
Estably is the first Liechtenstein-based digital asset management firm to offer world-class asset management through a blend of technology and human investment expertise. Thanks to the portfolio managers’ many years of experience in the field of value investing, the aim is to achieve above-average returns – starting at an investment sum of € 20,000. The aim is to make professional asset management, which was previously possible exclusively for major investors, accessible to everyone – in a convenient, transparent and profitable way.
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