Robo-advisors are becoming a common investment tool for those looking to invest passively or those who don’t have enough experience. For investors like these, DBS Bank has launched a robo advisor called the DBS digiPortfolio. This advanced tool enables intelligent investing by leveraging MorningstarTM's trusted expertise. Initially available only for DBS Wealth customers, the robo advisor is now available to the eligible public.
It represents a huge opportunity for inexperienced investors and those who don’t have time to manage their portfolios. Let’s take a closer look at DBS digiPortfolio and examine its features, benefits, and suitability for a wide range of investors.
{{cta-component}}
DBS digiPortfolio Review
DBS digi portfolio is a groundbreaking robo-advisor investment platform launched by DBS Bank in 2019. It provides ready-made digital investment portfolios catering to various risk appetites and investment goals.
Users who lack the time or expertise needed to monitor the market can get automated investing advice from this platform. Its primary objective is to give passive investors a simple yet efficient way to make their money work for them with little involvement.
DigiPortfolio has four portfolios with global and regional Asian diversification based in Singapore - the Asian Portfolio, the Global Portfolio, the Income Portfolio, and the Save-up Portfolio. Each portfolio has different investment priorities and risk levels.
You can invest in these portfolios using exchange-traded funds (ETFs) hand-picked by digiPortfolio's expert team of portfolio managers. The platform also provides various account options, including individual, joint tenancy, trust, and corporate, making it appropriate for a wide spectrum of investors.
Standout features of the platform include low management fees, diversification across twelve asset classes, regular rebalancing outside of the country of origin, and automated portfolio monitoring.
How do you sign up for digiPortfolio?
The primary requirement to access the platform is having a multi-currency account with DBS Digibank.
Signing up for the platform is a breeze. You can sign up for digiPortfolio on the DBS website or by downloading the app from Google Play or the App Store. The user-friendly interface guides you through the onboarding process, making it easy for investors of all experience levels.
Once you’ve signed up, you will be prompted to complete a risk assessment questionnaire. This assessment helps determine your risk tolerance and financial goals, allowing the platform to recommend a portfolio tailored to your preferences.
Once you’re past this stage, you can fund your investment account using your bank account, credit card, or cash.
How does the DBS Robo-Advisor work?
The backbone of the robo advisor is an advanced algorithm that automates investment strategies by analysing market movements, comparing them with historical trends, and optimising risk-return tradeoffs. The platform leverages algorithmic trading models to automatically manage and rebalance investor portfolios.
The robo-advisor uses artificial intelligence (AI) and machine learning (ML) to analyse huge amounts of data and execute automatic trades. This approach guarantees that the platform's investment decisions are based on data-driven insights informed by current and past market conditions.
A DBS robo advisor review indicates that it keeps a sharp eye on your investments for you by routinely rebalancing them back to their target allocation and by automatically selling any investments whose value has dropped below a set threshold.
Is DBS Robo-Advisor safe?
Safety is important when investing, and DBS takes this aspect very seriously. The platform is backed up and operated by the reputable DBS Bank, providing investors with a sense of security.
The Monetary Authority of Singapore (MAS), Singapore's central bank and financial regulatory body, has granted it a license. This regulatory oversight ensures that DBS digiPortfolio complies with strict financial and operational guidelines.
DBS digiPortfolio adheres to industry standards and best practices to safeguard investor assets and protect sensitive information. Some examples of these standards include the Personal Data Protection Act (PDPA).
DigiPortfolio complies with the PDPA, a Singaporean law governing personal data collection, use, and disclosure. This ensures that customer information is handled responsibly and securely.
The robo-advisor's automated and algorithm-based decision-making reduces the risk of human errors and impulsive decisions.
DBS digiPortfolio aims to provide a secure and trustworthy platform for investors, including newcomers, to confidently invest their money by adhering to such standards.
{{cta-component}}
DBS digiPortfolio fees
The DBS platform offers a transparent and competitive fee structure that ensures investors know exactly how much they are paying and what they are paying for. Fees are calculated based on the assets under management (AUM) and are typically lower compared to traditional investment advisories.
It relies on automation and other technology to streamline its investment processes, resulting in significant cost savings. For the team's expertise and work in curating and managing the portfolios, it charges an annual fee of 0.25 to 0.75%.
Minimum investment in DBS digiPortfolio
It caters to investors of all scales, making it accessible to knowledgeable investors and newcomers. Investors can embark on their investment journey with a minimum investment of as little as S$100.
Deposits and Withdrawals in DBS digiPortfolio
DBS robo advisor offers investors great flexibility in topping up or withdrawing funds. This allows investors to align their portfolios with changing financial goals or evolving market conditions.
As we mentioned before, funding and withdrawals on the platform can only be done through a multi-currency DBS account.
Use your account details to log in to the platform through its mobile app or the iBanking web platform. Use the on-screen options to request a top-up or withdrawal. Make sure to review the information before submitting, especially the amount to be deposited or withdrawn.
Deposits and withdrawals are typically processed within five business days. Funds are automatically debited from or credited to the account of your choice.
DigiPortfolio Investment Strategy
DigiPortfolio strategies adopt a Valuation-Driven Asset Allocation approach to maximise the portfolio returns and minimise risks. This strategy involves investing in assets that are priced to deliver attractive returns over a 3 to 5-year period. This is done by taking into account factors like valuation, market conditions, and growth potential.
The robo-advisor puts together a diversified portfolio of investments for you across 12 asset classes based on the data you provide. These include:
- Domestic stocks and equities.
- Foreign stocks and equities (excluding Singapore).
- International bonds.
- Three categories of exchange-traded funds:
- Actively managed portfolios.
- Smart beta ETFs that follow rules-based investment strategies.
- International equities.
Bonds and equity ETFs are combined in the investment portfolios to implement a straightforward and open investment strategy. The goal of this strategy is to manage risks while achieving the best returns possible based on a particular investment cycle.
Investors expect to obtain steady income streams through bonds while achieving capital growth through equities. DBS digiPlatform's in-house team of macro strategy analysts keep a close eye on the market to that end to ensure that the robo advisor functions smoothly.
DBS digiPortfolio considers acceptable price fluctuations to achieve returns as part of its risk-management strategy. It relies on careful decision-making processes to reduce downside risks.
The DBS team regularly re-balances portfolios as needed. This is done following stringent quarterly DBS ETF reviews of portfolios.This periodic rebalancing improves portfolio flexibility, regardless of the state of the market.
DigiPortfolio Types of Portfolios
DBS digiPortfolio offers a range of portfolios tailored to different risk appetites. The portfolio management team and the chief investment office team share equal responsibility for the two levels of careful screening and selection processes that go into building a portfolio.
The portfolios have three levels of risk:
- Risk Level 1: Slow n’ Steady - which is a low-risk level.
- Risk Level 2: Comfy Cruisin’ - which is a medium-risk level.
- Risk Level 3: Fast n’ Furious - which is a high-risk level.
Let’s explore the different types of portfolios offered on the platform.
Source: www.dbs.com.sg
Asia Portfolio
This portfolio enables you to invest in Asian markets, with a focus on Singapore. Other Southeast Asian markets included in the portfolio include China, Japan, and India, among others. It uses SGD to invest in Singapore-listed ETFs.
There are no eligibility requirements to invest in this regional portfolio, which comes with a minimum investment amount of SGD 1,000.
The ETFs covered under this portfolio include:
- Xtrackers MSCI China ETF
- iShares MSCI India Index
- Lion-OCBC Hang Seng Tech ETF
- ABF Singapore Bond Index ETF
- NIKKO SGD Investment Grade Corporate Bond ETF
- NIKKO Straits Times Index ETF
- NIKKO StraitsTrading Asia ex Japan REIT ETF
Risk levels for the Asia portfolio
The Asian Portfolio has three distinct risk levels:
Risk Level 1: Slow n’ Steady
At this low level of risk, the emphasis is on fixed-income bonds and securities to guarantee a stable and consistent income while taking advantage of the stock market's growth potential.
Risk Level 2: Comfy Cruisin’
This is a medium-risk portfolio with a slightly higher allocation to equities than fixed-income ETFs. The goal of this portfolio is to generate the highest returns while balancing risk and ensuring a reliable income.
Risk Level 3: Fast n’ Furious
This specific portfolio is a good fit for investors who have a very high-risk tolerance. The largest portion of the portfolio is allocated to equities, while some fixed-income bonds are included to help manage risks.
Long-term investors can expect relatively higher returns with this portfolio because of its high asset allocation to equities. For the same reason, they will also be exposed to higher risks.
Global Portfolio
Like the Asian Portfolio, the Global Portfolio is divided into three risk levels that distribute the proportion of bonds to equity accordingly.
With this portfolio, your exposure to global markets is diversified, with a focus on UK-listed ETFs. You’ll need to pass a ‘customer account review’ before you’re able to invest in this portfolio. The accepted currency for investments is USD, and the minimum investment is $1,000.
This portfolio doesn’t have a lock-in period or other additional fees. Make sure to carefully analyse the past DBS digiPortfolio performance before investing in it.
The Global Portfolio includes the following ETFs at three different risk levels:
- iShares MSCI China A
- iShares Global Corp Bond
- iShares MSCI World
- Vanguard 1-3Y USD Corp Bond
- iShares Core S&P 500
- iShares Core Global Agg Bond
- X MSCI EUROPE
- HSBC MSCI AC Far East Ex Japan
- Vanguard FTSE Japan
- VanEck Vectors Gold Miners
- iShares Global Infrastructure
- iShares JPM USD EM Corp Bond
Risk levels for the Global Portfolio
Here are the three risk levels you can choose from while investing in the Global Portfolio:
Risk Level 1: Slow n’ Steady
This low-risk portfolio invests primarily in fixed-income investment instruments to ensure stability. The goal of equity exposure is to increase returns.
Risk Level 2: Comfy Cruisin’
This portfolio has a higher exposure to equity investments compared to the earlier portfolio, balancing stability with the opportunity for higher investment returns. The higher allocation to equities and the comparatively smaller allocation to fixed-income assets make it a medium-risk portfolio.
Risk Level 3: Fast n’ Furious
At this level of risk, equity investments are overwhelmingly preferred over fixed-income assets. This portfolio appeals to investors who are willing to accept more volatility. It represents the highest risk level in the Global Portfolio, with a large allocation to equities and a small allocation to fixed-income bonds.
SaveUp Portfolio
This is a conservative, fixed-income-only portfolio with 3 to 6-unit trusts, investing primarily in fixed-income instruments. It has a flat 0.25% annual management fee. The minimum investment in this portfolio is $100.
This portfolio is primarily for investors who:
- Have a lower risk tolerance and prefer less volatile returns.
- Are looking to invest to earn higher returns than regular cash deposit rates.
The SaveUp portfolio is likely to be more appealing to investors who are risk averse and have been periodically switching money between fixed deposit and Treasury bills. It has a long-term yield of between 1.5% and 4% per year because it consists primarily of fixed-income securities in an environment of higher interest rates.
Income Portfolio
This is a digiPortfolio that generates regular income with equity and bond unit trusts. It has a flat 0.75% annual management fee. It is recommended for investors who:
- Seek investments that pay out 4% per annum quarterly.
- Prefer a portfolio made up of well-known sectors like bonds, REITs, and Asian equities.
The risk-based allocation under this portfolio ensures investors can align their investments with their risk tolerance and financial objectives.
Pros and Cons of DBS digiPortfolio
Like any investment platform, ithas its upsides and downsides. Let's explore its pros and cons to help you make an informed decision.
Pros of DBS digiPortfolio
Here are some advantages:
- Affordably Low Fees: At 0.75% annually, the costs associated with the digiPortfolio platform are relatively low. That means you pay $7.50 in annual fees for every $1,000 you invest.
- Diversified Portfolio: Investors have multiple choices with the digiPortfolio: Asia, Global, SaveUp, and Income portfolios.
- Interactive Portfolio Information: You can see which ETFs will be allocated to your portfolio based on your risk appetite. You can look up the fact sheets and prospectus for individual ETFs if you need more information.
- Simplified Risk Levels: It can be challenging for novice investors to decide which investment instruments they want to put their money into. DBS digiPortfolio has distinct risk levels that are clear and easy to understand.
- Low Initial Investment: You can start investing with just $1,000 for all the portfolios.
- Managed By Professionals: The investment team in charge of managing DBS digiPortfolio receives direction from DBS' Chief Investment Office. This team also oversees discretionary portfolios. You can rest assured that highly experienced and qualified portfolio managers are keeping an eye on your investments.
Cons of DBS digiPortfolio
Here are some disadvantages associated with BDS digiPortfolio:
- No Integration With The DBS Multiplier: DigiPortfolio has not yet been incorporated into the DBS Multiplier. Investments made and cash dividends received through the platform are not recognised as meeting the requirements of the Investment category to be eligible for bonus interest.
- No regular savings plan that invests in a digiPortfolio: Regular savings plans help make consistent and routine investments, which helps investors avoid market timing and remove emotions from the decision-making process. This opportunity is not currently available with DBS digiPortfolio.
Who is digiPortfolio Suitable For?
This platform caters to diverse investors, making it ideal for various individuals and financial goals. The platform's versatility and risk-based portfolios make it especially suitable for:
- Busy professionals who seek a hands-off investment approach, which allows them to focus on their careers while their money works for them.
- Beginners looking for expert guidance and an accessible and user-friendly platform to kickstart their investing journey.
- Investors with specific long-term financial goals and a disciplined and systematic approach to achieving their objectives.
- People looking to add a smart, automated approach that offers risk management and diversification to their current investment strategies.
DBS digiPortfolio Customer Reviews
I checked reviews for DBS digiPortfolio on Seedly, and I couldn't find any reviews on Google. There are only 35 reviews for digiPortfolio in April 2024. The average rating is 3.3 out of 5. Oddly, the most recent review was published almost 2 years ago. So, my brief summary of the DBS digiPortfolio reviews.
Positive Reviews
Ease of Sign-Up and Accessibility:
Existing DBS or POSB users find the sign-up process for digiPortfolio simple and quick.
Integration with DBS i-banking streamlines the process, requiring just a few clicks, agreement readings, and a risk test to get started.
Portfolio Options and Risk Levels:
Users can choose from two portfolios - Asia & Global, each with varying risk levels from Level 2 (low risk) to Level 4 (high risk, high return).
The flexibility to select preferred portfolios and risk levels caters to individual investment preferences.
Performance and Returns:
Positive returns are reported by users, with one reviewer noting a profit return of 3.75% since starting in January 2021.
A user who opted for the Level 4 risk profile reported a good profit return as of their review date.
User Experience and Information Accessibility:
DBS digiPortfolio provides a graph illustrating projected returns across three scenarios - Strong, Normal, and Weak, enhancing transparency for users.
The availability of investment information on the phone app and quarterly portfolio updates via email are appreciated features.
Customer Support:
Users have praised the live chat support available through iBanking, describing staff as patient and helpful in addressing queries.
The proactive approach of the DBS team in sending quarterly updates on market situations and portfolio changes is valued by users.
Areas for Improvement
Inconsistency in Returns Displayed:
Some users have reported inconsistencies between the returns shown on the platform and their own calculations, indicating a potential area for improvement in data accuracy.
Limited Portfolio Choices:
While two portfolios are available, some users may desire more diversified investment options to suit their specific investment goals and risk appetites.
Overall, DBS digiPortfolio receives positive feedback for its ease of sign-up, reasonable fees, and transparency in risk and return projections. The platform's integration with DBS i-banking and phone app accessibility further enhance its user-friendly nature. While there are areas for improvement, such as data consistency and portfolio diversity, it remains a popular choice for new and existing DBS users seeking a simplified investment solution.
Robo Advisors: DigiPortfolio and Kilde
Comparing the digiPortfolio with other investment platforms is important for making informed investment decisions. One such platform is Kilde, which also provides unique features and investment opportunities.
Kilde is a wealth management platform that focuses on sustainable investing, providing access to diverse investment options with environmental, social, and governance (ESG) considerations. Kilde's commitment to sustainability resonates with socially responsible investors seeking to align their investments with their values.
{{cta-component}}
Here are the differences between Kilde and DBS digiPortfolio:
DBS digiPortfolio and Kilde each serve unique investor needs and goals. DBS digiPortfolio provides expertly curated, ready-made portfolios that cover a vast spectrum of investment options, leveraging algorithm-driven portfolio management. It caters to investors looking for varied and uniform investment approaches.
On the other hand, Kilde offers a more tailored advisory service focused on sustainable investing, with a pronounced emphasis on ESG (environmental, social, and governance) factors. This platform resonates with socially conscious investors eager to drive positive change in society, delivering a bespoke advisory experience tailored to individual aspirations.
Is DBS digiPortfolio Good?
Out of DBS’ total user base of about 5.2 million, three million online retail customers were part of the DBS digiPortfolio when it debuted in 2019. It was rolled out to all DBS customers by the end of that year. DBS has since proven to be a reliable and robust investment platform, operating successfully. The platform gives investors the confidence to successfully navigate the complexities of finance, thanks to transparent fees and diversified portfolios.
It is suitable for investors with diverse risk profiles and financial objectives, thanks to its user-friendly interface, expertly curated portfolios, and risk-based allocation.
DBS digiPortfolio also offers the assistance and resources you need to maximise your financial growth while reducing risks and unlocking the full potential of your financial aspirations.
Read also:
Sources:
- internet-banking.dbs.com.sg
- www.mas.gov.sg
- www.pdpc.gov.sg/overview-of-pdpa
- www.dbs.com.sg/treasures/investments
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.
%20Letter%20and%20HFE%20Application_small.webp)
.webp)
%20in%20Singapore%20by%20Freepikcom%20small.webp)
