What is StashAway?
StashAway is a digital wealth management platform for both retail and accredited investors. It uses technology to deliver automated, personalized portfolio management for each client's individual portfolios.
StashAway offers investment products across equities, bonds, commodities, cash, REITs, and more.
General Investing powered by StashAway
This is a general investing product offered and managed by StashAway that invests your funds into globally-diversified, risk-managed investments based on your level of risk.
StashAway will utilize its proprietary Risk Index to calculate the potential loss of a portfolio in a year. For example, using the Value at Risk framework, a portfolio of Risk Index 26 has a 99% probability of not losing more than 26% in a year.
StashAway's General Investing portfolios aim to not overexpose investors to risk when seeking returns. This may, however, at times, underperform the market benchmark to keep risk constant.
For investors looking for an alternative general investing option, there's a BlackRock-powered General Investing portfolio.
General Investing powered by BlackRock
In this general investing portfolio, BlackRock provides all insights and asset allocations using iShares ETFs. StashAway manages the trade execution, deposits, withdrawals, rebalancing, and customer support.
Investors can build their own portfolios and customize them in any way they want including adding or removing asset classes, adjusting asset allocations within the portfolio, and making changes at any time after creation.
StashAway would manage your flexible portfolio by maintaining your asset allocations according to your proportions when the market changes. Your portfolio is also rebalanced when you make a deposit, request a partial withdrawal, or make a change in the allocations within your portfolio.
Using flexible portfolios will not trigger re-optimization – StashAway will maintain your asset classes and allocations in the proportions you set even if there are changes in economic conditions.
However, StashAway might replace the underlying ETFs within the asset classes with more cost-efficient funds at their own discretion.
StashAway's income portfolio allows investors to invest in a portfolio that generates passive income through various market conditions.
The income portfolio sources your income from multiple lower-risk investments such as government bonds, corporate bonds, REITs, and stocks.
Income received from this portfolio can be automatically reinvested or withdrawn to a local bank account. There are no lock-ins but the minimum investment amount is $10,000 SGD.
Thematic Investing Portfolios
Thematic portfolios allows investors to invest in long-term structural trends that they think will change the world. These include new innovative sectors that aren't available in most balanced portfolios and could supplement existing investments.
There are currently four thematic portfolios:
- Technology Enablers
- The Future of Consumer Tech
- Healthcare Innovation
- Environment and Cleantech
StashAway's thematic portfolios include a risk-balancing component known as balancing assets to make sure your money isn’t exposed to more risk than you’re comfortable with.
ESG Portfolios for Sustainable Investing
ESG portfolios offer investors an opportunity to invest in companies with high Environmental, Social, and Governance ratings which traditionally have a higher return while creating meaningful societal impact.
It uses two ESG scoring models - the MSCI ESG rating and The Morningstar Sustainability Rating to screen the underlying funds for the portfolio.
StashAway Simple is StashAway's cash management account with a projected yield of 1.9% annually. This is an ideal account for storing short-term cash needs such as emergencies or other liquidity needs with low risk.
Unlike the above investment products, there are also no management fees for depositing in StashAway Simple and no requirements, no lock-ins, no minimum deposits, and no limits to the amount that can be deposited.
StashAway Simple Plus
StashAway Simple Plus is a riskier version of their cash management solution that offers a higher yield of between 2.7% to 3.2% annually.
It does this by investing in short and ultra-short duration bond funds:
- LionGlobal SGD Enhanced Liquidity Fund (20%)
- Nikko AM Shenton Short Term Bond Fund (35%)
- LionGlobal Short Duration Bond Fund (45%)
If interest rates rise faster than markets' expectations, you may experience a temporary loss in value, i.e. negative returns. Hence, it is recommended to keep funds here for at least 12 months to ride out the volatility.
Simple Plus is free until 30 June 2023. Thereafter, the management fee will be 0.05% p.a.
SRS portfolios allow investors to invest their idle SRS account deposits while saving on taxes by up to $15,300 annually, creating long-term meaningful growth for their retirement.
SRS funds can be invested in the General Investing portfolio, thematic portfolios, Income portfolio, and StashAway Simple.
StashAway Reserve for accredited investors
StashAway has a new arm called StashAway Reserve for accredited investors that enables access to private market investments and crypto.
Through StashAway Reserve, an investor can gain diversified access to between 10 to 20 angel round investments through the XA Network in a single investment.
In addition, StashAway Reserve allows accredited investors to expose their General Investing portfolios with a 1 to 12% allocation to Bitcoin and Ethereum through high-quality, institutional-grade ETFs.
How does StashAway invest?
StashAway uses a proprietary investment methodology they call Economic Regime-based Asset Allocation, or ERAA.
ERAA believes that asset classes behave differently depending on the economic regime. It will re-optimize your portfolio’s asset allocation to prepare for the current or upcoming regime while maintaining your risk preference. Furthermore, a re-optimization can also occur when there is a valuation gap on the assets.
ERAA is often critique as an active management approach. However, StashAway has defended its approach and called for a more holistic measurement of its performance.
Why invest in StashAway?
StashAway is a great robo-advisor for beginners as it has no minimum capital to get started. The well-designed app is a delight to use, which can help beginner investors cultivate good investing habits for decades to come.
The variety of product features and offerings from cash management to diversified global investing to thematic investing all in a single platform is remarkable, as investors can possibly find everything they need without depositing across multiple investment platforms.
What are the risks involved when investing with StashAway?
StashAway is generally a safe platform to invest with - it is regulated by MAS under a capital markets license with stringent standards for capital, compliance, audit, and reporting requirements.
Your cash deposits are held in a trust account at DBS Bank while your investable cash and securities are held in a custodian account through Saxo Capital Markets Pte Ltd or HSBC Hong Kong for StashAway Simple.
In terms of security, StashAway implements two-factor authentication for any new login from a new device or updates on your account. Fund withdrawals will always trigger email notifications with suspicious activities flagged for investigation.
The app is hosted on Amazon Web Services and with 24/7 monitoring and your data is secured with intrusion detection systems and security measures.
The biggest risk involved is that your assets are not held in your own name, which could be a legal issue in case of your demise.
How much does StashAway cost?
Fees for StashAway investment portfolios
StashAway charges between 0.2% to 0.8% of your investment portfolio annually beginning from 0.8% on the first $25,000 invested with them.
On top of this annual charge, the underlying ETFs have an expense ratio of between 0.2% to 0.4% annually. This is not a cost you will see in your statements.
Fees for StashAway Simple
StashAway Simple has no annual fees, but the underlying ETFs have a net expense ratio of approximately 0.172%.
For all products, there are no rebalancing, deposit, withdrawals, subscription or trading fees.
StashAway is one of the pioneers of robo-investing in Singapore. It has launched new products like Income investing, ESG, and thematic investments over the years and more recently, StashAway Reserve for accredited investors.
In our opinion, StashAway has the best in-app investing experience - smooth, fast, and extremely delightful to use. However, our biggest gripe has always been its active investment methodology which has not outperformed a simple globally diversified index fund.
In the future, we'd love to see StashAway opening up new products for retail investors, customizable portfolios, and CPF investing.
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