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2017 Best Robo-Advisor Performance – The Research Is In

2017 Best Robo-Advisor Returns

Curious about who’s leading the 2017 robo advisor returns pack? This review details the top robo-advisors in 2017, from January through September along with the one year winners. When searching for your best robo-advisor, short-term performance is one factor to consider, but not the only factor. Read this best robo-advisor article and use the information along with other robo research to choose the best robo-advisor for you.

Condor Capital Management invested in 20 robo-advisors in 2016 and 2017 and details the returns for both taxable and IRA accounts. The firm recently added TIAA, SoFi and WealthSimple accounts, so those robo-advisors only show one quarter performance.

This top performing robo-advisors report details the taxable account returns.

Today’s exploration includes results from each robo-advisor firm’s year-to-date and one-year investment results.

Bonus: 6 Robo-Advisors With the Lowest Fees

Behind the Scenes of the 2017 Best Robo-Advisor Performance

Condor Capital chose a moderate investment asset allocation. The taxable model portfolios were invested in 60% stock and 40% bond exchange traded funds (ETFs). Obviously, other asset allocations would yield differing robo-advisor performance data.

Equity Analysis

The research found that most robo-advisors lean towards a value, large cap investing approach. This is probably driven by the historical research that shows, value investing outperforms growth. The value bent might have hurt this year’s returns as growth stocks outperformed value in 2017.

Using the Morningstar style box below, those companies in the top left quadrant show the predominant investment style of the individual robo-advisors. E*TRADE Hybrid equity had a small cap investment bent, whereas most of the other companies leaned toward mid-cap to larger-cap value companies.

Robo-advisor performance + investment style of robo's equity portfolios

Image credit; Condor Capital-The Robo Report

This year, the top equity performers were invested in the vanilla total stock market ETF category for their complete domestic stock market allocation. The total U.S. market allocation helped their rank, as this broad-based US stock market asset class captures both value and growth stocks along with a healthy dose of well performing large cap players. International equity holdings also helped boost the performance of the equity category winning digital advisors.

Fixed or Bond Analysis

Globally, interest rates are rising this year and high yield bonds outperformed the safer investment-grade bond funds. In the third quarter of 2017, emerging bond funds won the performance race.

Year to date, Schwab’s fixed income portfolio returned a juicy 6.01% return. Second in the fixed category was Fidelity Go with a 4.59% YTD return. Returns are driven by the composition of the bond portfolio – which varies widely among the robo advisors. Typically, the more aggressive bond funds performed better than those with a more conservative bent.

As with all investment categories, there are winners and losers, and they vary each year, dependent upon a variety of economic factors.

The Condor Capital report broke out Equity and Fixed Income portfolio data as well as reporting on overall performance.

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Robo Advisor Performance 2017

The investment returns for the first three quarters of 2017 ranged from a low of 9.07% for Acorns to a high of 11.38% for Schwab’s Intelligent Portfolios. Schwab’s number one performance spot follows a win by this robo-advisor for last year as well.

Best robo advisor returns 2017. Find out the top performing robo advisors year-to-date and one year.

Image credit; Condor Capital-The Robo Report

For the first three quarters of 2017 the top 3 robo investor returns: 

Overall Best Robo Advisor Returns:

  • Winner: Schwab Intelligent Portfolios
  • 2nd Place: Betterment
  • 3rd Place: SigFig and SoFi (tied)

Equity Best Robo-Advisor Returns:

  • Winner: Schwab Intelligent Portfolios and SigFig (tied)
  • 2nd Place: SoFi and Wealthfront (tied)
  • 3rd Place: TD Ameritrade Essential Portfolios

Fixed Income Best Robo-Advisor Returns:

The 2017 Best Robo-Advisor Performance chart showed that winning robo-advisors held greater weights in the outperforming asset classes and sectors. Thus, don’t expect that this year’s winners, will repeat year after year.

The chart above shows the robo-advisory returns for the quarter, year to date and one year. The data is divided by complete portfolio, equity portion and fixed income allocation.

The one-year robo-advisor winners from October 1, 2016 through September 30, 2017 are:

One Year – Overall Best Robo Advisor Returns:

It was a close run for the top one-year performers. The following robo-advisors all reached from 10% to 11% returns:

4th – Fidelity Go – 11.46%

5th – Vanguard – 11.41%

6th – WiseBanyan – 11.32%

7th – E*TRADE ETF – 11.29%

8th -SigFig -11.05%

9th – Personal Capital – 10.53%

10th – Ally (Formerly TradeKing) – 10.28%

Must read; Best Portfolio Management Software for Investors

2017 Best Robo-Advisor Performance Takeaway

While year-to-date and one-year returns are fascinating to review, it’s important to understand that there’s also a bit of luck in a short-term analysis. If the advisors’ ETFs match up well with the market sectors and asset classes that outperformed during the year, then that digital advisor will benefit. Since no one can predict the future, choosing a robo-advisor solely based upon short term returns isn’t the way to outperform every year.

You’re best off evaluating the fees, investment minimums and specific features that you prefer, when choosing your automated investment advisor.

Click here for immediate access to the most comprehensive robo-advisor comparison chart >>>

All data for this report was sourced from Condor Capital’s The Robo Report.

 

 

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Barbara A. Friedberg, MBA, MS

Barbara A. Friedberg, MBA, MS

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