Robo-advisors like OCBC RoboInvest have emerged as game changers for investors looking for a hassle-free and technologically advanced approach to portfolio management. These computerised platforms are ideal for beginners with limited capital to start investing.
Robo-advisors create your investment portfolio using algorithms, as opposed to traditional investment brokerages. You pay much lower commission fees as a result.
OCBC RoboInvest is one of three robo-advisors launched by the Oversea-Chinese Banking Corporation (OCBC), a leading financial institution in Singapore.
Whether you're an experienced investor looking for streamlined portfolio management or a beginner seeking a user-friendly investment experience, the company caters to a wide range of preferences and risk appetites. Thanks to its advanced algorithms and security protocols, it enables all investors to realise their investment potential.
In this OCBC RoboInvest review, we will explore its cutting-edge features, investment methodology, and fee structure compared to other robo-advisors.
OCBC RoboInvest Overview
OCBC Bank introduced OCBC RoboInvest in 2018, the first such innovation by a bank in Southeast Asia. The platform offers a user-friendly platform for diversified investing in Singapore while streamlining the investment process. It has a user-friendly dashboard with a broad diversification of 38 portfolios. These portfolios account for both local and global products.
The platform allows investors to make both monthly and one-time investments. Investing with this platform does not require a custodial or securities account. The only prerequisite is an OCBC bank account with access to OCBC Digital Banking.
The platform also provides investors with automated portfolio management and a smart portfolio rebalancing service. With its digital investing app, you can access your portfolio whenever needed. This makes OCBC RoboInvest a hassle-free way to invest funds and build wealth over time. The platform combines the expertise of human advisors with the efficiency and precision of algorithms to provide users with a well-rounded investment experience.
How does OCBC RoboInvest work?
RoboInvest runs on advanced algorithms to analyse factors such as market trends, risk profiles, and investment goals to create personalised investment portfolios for users. The platform considers the investor's risk tolerance, investment choices, and financial objectives to recommend suitable investment options.
There are certain basic eligibility requirements to be able to use the platform. They include:
- At least 18 years of age
- Non-US citizen
- Non-UK resident
- Non-EU resident
- People not residing in Russia, Belarus, or within the EEA
To get started, investors need to answer questions regarding their risk tolerance, financial goals, and investment preferences. Based on these inputs, the algorithm designs a diversified portfolio tailored to each investor's needs.
The platform then automatically rebalances the portfolio periodically to ensure it remains aligned with the investor's goals.
Apart from this, you must have either an OCBC current account or a savings account with online banking services to access OCBC RoboInvest. Funds for investment can be transferred directly from your OCBC account, making it easy to access and monitor your portfolio online at any time.
The system is set up to help you earn the highest possible returns with the least amount of work. The investment portfolios deal mostly with stocks and exchange-traded funds (ETFs ). You can select the most appropriate investment portfolio based on your preferences using focused themes or risk profiles.
The platform's optimisation algorithm determines the percentage allocation to each ETF, with each ETF-based portfolio being rebalanced semi-annually. The platform will buy more during market turbulence and sell more when stock values rise noticeably.
OCBC views each portfolio as having a unique investment strategy and handles it subject to user preferences.
OCBC RoboInvest Fees
The platform has a transparent and competitive fee structure at 0.88% of total investment value per year.
This fee covers the professional management of the portfolio, including ongoing monitoring and rebalancing of investments. The fee is calculated and charged monthly based on the number of calendar days.
The annual fees do not include currency conversion or management fees for ETFs. Additional exchange fees can be levied depending on the markets and trading platforms OCBC uses to execute investments.
All client accounts on the platform have SGD as their base currency. Any applicable conversion fees vary depending on the portfolio and its geographic diversification.
Minimum investment in OCBC RoboInvest
The minimum investment amount varies depending on your chosen portfolios. It also offers a low barrier to entry, allowing investors to get started with a minimum investment of just $100. Each portfolio has different minimum investment requirements, with some going up to $6,000, depending on your selected portfolio.
This flexibility makes the platform an attractive option for knowledgeable investors and those just starting their investment journey.
Deposit and withdrawal in OCBC RoboInvest
The platform provides a seamless experience when it comes to depositing and withdrawing funds. Investors can link their OCBC bank accounts directly to their RoboInvest portfolios for quick transfers. Users also have the flexibility to top up or withdraw funds at any time, making it easy to manage their investment portfolios.
The platform currently accepts transactions only in SGD. You must first choose your investment portfolio and specify the investment amount before you can fund your account. Then, fund your investments with funds from an eligible OCBC account.
There is no minimum withdrawal amount with RoboInvest. You can make a partial or full withdrawal on the platform whenever you want. Withdrawals can only be made to a linked OCBC account.
When you make a withdrawal request, the sold investments are converted from the base currency of the particular trade to SGD at the prevalent market rates. The withdrawal process typically takes 3-5 business days to credit your account.
The amount you will receive depends on the portfolio value and the currency conversion rate at the time of sale, along with the applicable asset under-management charges.
Additionally, there is no charge or fees for deposits or withdrawals.
OCBC RoboInvest Investment Methodology
The platform uses advanced algorithms to analyse market data and historical trends to make informed investment decisions. This data-driven approach helps eliminate emotional biases and ensures that investment choices are based on objective analysis. The platform consists of a range of portfolios, from conservative to aggressive. That is so investors have the flexibility to choose an investment strategy that aligns with their risk tolerance and financial goals.
OCBC RoboInvest Investment requires you to choose your level of risk tolerance from three options - low, medium, and high. Each portfolio can include up to four asset classes in varying percentages, including equity, fixed income, commodities, and cash. The higher-risk portfolios only include equity and cash, whereas the low to medium-risk portfolios include a balance of all four asset classes.
The platform can also design a portfolio based on your specific targets and preferences. This is the case if you are an experienced investor with a high-risk appetite but are too busy to conduct your own research. You can simply choose the annualised return, the area you want to invest in, and the level of risk you are comfortable with.
OCBC RoboInvest Investment Portfolios
Here’s a list of some popular portfolios on the platform with their risk levels:
Source: www.ocbc.com. Performance data is as of 30 November 2023. Updated February 22, 2024
It provides a variety of investment portfolios, each tailored to different risk levels and investment objectives:
- Conservative Portfolio: This portfolio focuses on capital preservation with a higher allocation towards fixed-income instruments such as bonds and cash equivalents. It is ideal for investors with a low-risk appetite and a shorter investment horizon.
- Balanced Portfolio: A balanced portfolio aims to achieve a mix of growth and income by investing in a diversified range of asset classes, including equities and fixed-income securities. This portfolio offers a moderate level of risk and is suitable for investors seeking a balanced approach to wealth accumulation.
- Growth Portfolio: The growth portfolio emphasises capital appreciation by investing in more equities and growth-oriented assets. It suits investors with a higher risk tolerance and a longer investment horizon who are aiming for higher returns over the long term.
The platform manages 38 thematic equity and ETF portfolios in seven markets: China, Hong Kong, Singapore, Australia, the United Kingdom, the United States, and Europe.
Portfolios are also geographically specific, so you can avoid certain markets while concentrating on others. A few examples of such portfolios are ‘Hong Kong Property’, Stable Singapore Giants’, and ‘Stable Aussie Giants’.
Portfolios are rebalanced on a quarterly or semi-annual basis. The automatic rebalancing feature helps you maintain your risk profile in response to market changes while increasing your overall returns.
Pros and Cons of OCBC RoboInvest
As with any investment service, RoboInvest has its advantages and disadvantages. Here are some key points to consider.
Pros of OCBC RoboInvest
- Accessibility: The platform has a low minimum investment amount, making it available to various investors. You can start investing with just $100 and choose one of the 38 available portfolios based on your preferences and risk tolerance. It provides accessibility to both domestic and foreign products.
- Diversification: The platform provides diversified investment portfolios, reducing concentration risk and enhancing overall portfolio performance. Its balanced portfolios, which include investments in four different asset classes, are ideal for investors with low- to medium-risk appetites.
- Simplicity and Automation: It is a straightforward, user-friendly robo-advisory platform with a secure interface. Its automation streamlines the investment process, saving investors time and effort. It is easy to start, monitor, and manage your portfolio.
- Professional Management: Additionally, it is backed by highly experienced financial advisors who bring their considerable knowledge and insights to bear on the platform’s effectiveness.
Cons of OCBC RoboInvest
- Fees: Although you can begin investing with just US$100, the minimum investment amount may increase based on your selected portfolio. The annual management fee of 0.88% is slightly higher than other-robo advisors. Apart from its management fee, OCBC RoboInvest might also charge for currency conversions and ETF management.
- Limited access: Overall accessibility is another factor you must consider. The platform is available only to existing customers. That means you must open an OCBC current or savings account if you don’t already have one to start using the service.
- Limited Customization: Although the platform offers a range of investment portfolios, investors looking for more customised investment strategies may find the available options somewhat limited.
Is OCBC RoboInvest safe?
The platform prioritises the security of investor funds and personal information by complying with rigorous security protocols and regulatory standards. There is also the factor that OCBC, one of Singapore's largest and most reputable banks, backs the service.
The Monetary Authority of Singapore (MAS) regulates OCBC Bank, a fact that is a source of investor confidence in the platform's adherence to industry best practices and regulations. OCBC RoboInvest operates under the protection of the Singapore Deposit Insurance Corporation (SDIC), which safeguards eligible deposits up to SGD 75,000 per depositor.
Although OCBC Bank has faced some security challenges in the past, investors can be reassured by the fact that the platform is a bank-grade secure service subject to various tough regulations for Singaporean banks.
Who is OCBC RoboInvest Suitable For?
A wide range of investors, including both new and seasoned investors, use the platform. It can be particularly suitable for:
- New Investors: The platform's user-friendly interface and automated investment approach make it an excellent choice for beginners who want to start investing but need more knowledge and time to manage their portfolios.
- Busy Professionals: The platform offers a convenient solution for busy professionals with limited time to research and manage investments. The platform's automated features handle portfolio management, allowing investors to focus on their other commitments.
- Risk-Averse Investors: It provides conservative investment portfolios that focus on capital preservation. It can be an attractive option for risk-averse investors who seek a more stable and predictable investment journey.
Automated Robo-advisors: OCBC RoboInvest vs Kilde
While discussing OCBC RoboInvest, it's worth considering other investment platforms. Kilde is a digital investment platform that offers a range of investment products and services to investors in Singapore. While both platforms aim to simplify investing, there are some key differences between the two.
Robo-advisors generate portfolios based on a limited number of questions using predetermined algorithms. This limited control implies that one must completely believe in the company's investment strategy. The benefit of using OCBC RoboInvest is that you can choose the portfolio that best suits you from various options. If you're looking for a chance to invest with a minimum of just US $100, the platform offers an excellent platform. However, certain portfolios have high minimum investment requirements, which can be a disadvantage for some retail investors.
The platform has a large selection of portfolios that are geographically specific and limited. This provides you with the option to steer clear of investing in a particular market if you perceive it as too high-risk. However, this might be a limitation for an investor who wants to explore various global markets and leverage the underlying technology.
Kilde, on the other hand, focuses on providing users with access to global exchange-traded funds and utilises a proprietary investment framework to build portfolios. It gives investors access to investments in private debt and offers returns of up to 13.5*% annually. Investor funds are professionally managed by analysts who are always looking for strategies to increase returns on your investment.
OCBC's robo-advisor platform is a seamless addition for existing clients. By leveraging clients' account information and risk tolerance, the robo-advisor helps OCBC customers optimize their portfolios and achieve their financial goals.
At Kilde we aim to build a comprehensive private markets investment platform with emphasis on fixed income products.
Also worth noting is that while OCBC RoboInvest offers a range of predefined portfolios, Kilde offers a more customisable investment experience, which allows users to create their portfolios based on their investment preferences.
Kilde stands as a distinguished digital platform based in Singapore, granting investors the opportunity to engage in private debt investments. This avenue holds the promise of yielding appealing annual returns of up to 13.5*%. Kilde serves as an exceptional gateway for individuals in pursuit of alternative investment avenues that might not be accessible through conventional means.
Is OCBC RoboInvest Good?
The platform works for all investors. Its low minimum investment requirement, diversified portfolios, and professional management make it an attractive option for individuals seeking a convenient and hassle-free investment solution.
Like any investment platform, however, investors must conduct thorough research, consider their investment goals and risk appetites, and evaluate the charges involved before making an investment decision.
With 38 different investment portfolios, it is ideal for investors who are happy with its minimum investment requirements and 0.88% annual management fee.
Other robo-advisors generate portfolios using predetermined algorithms and based on limited inputs about an investor’s preferences, goals, and risk appetite. The benefit of using the platform is that you can choose the portfolio that best suits you from various options.
The fact that an established bank backs OCBC RoboInvest can be further reassuring regarding security and regulatory compliance. Investors must assess these factors against their financial goals and preferences to make an informed decision.
The views expressed in this blog post are solely my personal opinions and do not constitute professional financial advice. I am simply sharing my opinions with no guarantee of accuracy or completeness. No reader should make decisions based solely on the contents of this blog post. Readers should consult their own financial advisor before making any investment decisions. Neither the author of this blog post, Kilde, nor its employees will be held liable for any financial losses or damages that may result from the use of the information contained herein. Investing contains risks, including total loss of capital. Past performance does not guarantee future returns. Please conduct your own research before investing.
*KILDE PTE LTD (“Kilde”) is incorporated in Singapore (registration no. 201929587K) is licenced and regulated by the Monetary Authority Singapore and holds a Capital Markets Services Licence (CMS101016) and an Exempted Financial Advisor License under the Financial Adviser Act. The information provided in this marketing material is intended for “accredited investors” and “institutional investors” (collectively “qualified persons”) only. This marketing material, and any information in this marketing material, or any documentation that Kilde provides in relation to this marketing material is provided without any representation or any kind of warranties whatsoever (whether express or implied by law).
This advertisement has not been reviewed by the Monetary Authority of Singapore.