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Best Robo-Advisor Performance 2019 – Plus

Robo-Advisor Performance

As a multi-decade investor I know the pull of high investment returns. It’s wonderful to imagine that a fund’s 20% one-year returns will continue into the future. Many investors make that assumption and jump in to the funds with top returns.

Robo-advisor performance records allow you to find out who those winners are!

But, just because you can – choose a robo-advisor with the highest returns – doesn’t mean that you should.

There’s no guarantee that the winning robo-advisor, investment manager or exchange traded fund (ETF) from last year will repeat their performance.

Robo-advisor returns are one piece of the investment selection puzzle. But, you should consider other factors before choosing a robo-advisor.

That’s where this Nummo Robo-Advisor Ranking survey comes in!

Choose the best robo-advisor for you with the Robo-Advisor Selection Wizard.

Nummo, a personal finance management platform, analyzed the returns, and other factors, of 16 robo-advisors to come up with the “winners” in a variety of categories. Their “review period” for the robo-advisors was December 1, 2017 through December 1, 2018. Get a link to the complete report below.

Best Robo-Advisor 2019 – Selection Criteria

This robo-advisor return survey evaluated 17 robo-advisors and approximately 300 combinations of investment portfolios to come up the the best robo-advisor performance, in various categories.

Instead of simply considering the winners of all the considered robo-advisors, this robo-advisor reports on the winners within various investment styles.

The evaluation criteria includes ten factors, that are considered to create a final “composite” score. So, actually this survey is a robo-advisor performance PLUS – survey.

While performance is considered, so are other factors in determining the winners in each category. So, the “best robo-advisor” might not have the highest return.

Robo-Advisor Performance Ranking factors:

  1. Historical performance between December 1, 2017 and December 1, 2018.
  2. Total cost of investing in the robo-advisor (management fees plus fund expense ratios).
  3. Funds required minimum investment amount.
  4. Beneficial tax-management services.
  5. Support of auto-deposit.
  6. Human financial advisor access.
  7. Fractional share availability.
  8. Offers automatic dividend reinvestment.
  9. Offers automatic rebalancing.
  10. Offers socially responsible investing strategies – SRI.

The weighting of the factors, input into each composite score are outlined in the methodology section of the Nummo Ranking Report for 2019.

Technically, this isn’t solely a robo-advisor performance report but a broader view of the best robo-advisors based upon the ranking factors above.

One way to use this information is to understand the types of investment styles and then see which one fits for you. But remember, robo-advisor performance and ranking is only one piece of the investment selection puzzle. And you might value other factors, that aren’t included in the Nummo Robo-Advisor Ranking PDF.

Best robo-advisor performance 2019

Best Robo-Advisor Returns – Survey Members

The Robo-Advisor returns and factors considered for this survey are:

Robo-Advisor Returns According to Investment Style

Robo-advisor investors typically complete a short questionnaire to assess their financial goals, comfort with risk and their time-horizon for the invested money. Based upon their quiz responses, the investor’s money is funneled into various types of investment portfolios. Following are descriptions of the various investment portfolio styles, used in this study.

Investment Portfolio Styles

Conservative and Income Portfolios own a maximum of 30% equities:

  • Invest in funds that own greater amounts of bonds and fixed income securities.
  • Are best suited for investors closer to retirement or uncomfortable with risk.
  • Own more dividend producing assets like bond funds and are less volatile.
  • Provide greater dividend and interest income in lieu of the higher potential returns of stock-type investments.

Balanced Portfolios own a maximum of 60% equities: 

  • Own greater proportions of stock funds than the conservative and income portfolios.
  • Are suitable for general investment, retirement, and future college savings goals.
  • Are appropriate for investors with a medium-term horizon, greater than five to seven years.
  • Are appropriate for investors comfortable with a moderate degree of investment volatility or risk.

Growth (maximum 75% equities) and Value Portfolios (maximum 100% equities):

  • Own a greater proportion of stock funds that offer the opportunity for higher robo-advisor returns.
  • Are appropriate for younger investors saving for retirement and investors who won’t sell their assets at the first signs of a market drop (sometimes called aggressive investors).
  • Have the possibility of greater losses as stock returns are more volatile than those of bonds.

Robo-Advisor Ranking Categories

Now that you have an idea of the various investment styles, here are the ways the robo-advisor returns were categorized:

Taxable Robo-Advisor Portfolios

  • Best Taxable Portfolio: Value
  • Best Taxable Portfolio: Growth
  • Best Taxable Portfolio: Balanced
  • Best Taxable Portfolio: Income
  • Best Taxable Portfolio: Conservative

Best Robo-Advisor Returns – Specialty Categories

  • Best Low Cost Robo-Advisor
  • Best Low Minimum Investment Amount Robo-Advisor
  • Best Socially Responsible (SRI) Robo-Advisor

Best Robo-Advisors Performance 2019

Best Robo-Advisor Returns by Category

Best Taxable Portfolios: Value

1. Wealthsimple Basic – Gowth SRI Portfolio

In the taxable-value category, Wealthsimple’s highest ranking portfolio was their socially responsible offering. During the “review period) this portfolio earned 0.95%. The portfolio was also rewarded for its zero minimum deposit and tax-loss harvesting.

Minimum investment amount: $0

Management Fee: 0.50%

One year return 0.95%

2. Ellevest Digital – Impact Portfolio

Minimum investment amount: $0

Management Fee: 0.25%

One year return: 0.59%

3. Ellevest Premium – Impact Portfolio

Minimum investment amount: $50,000

Management Fee: 0.50%

One-year return: 0.59%

Best Taxable Portfolios: Growth

1. Wealthfront – with risk score of 4.5/10.00

Wealthfront’s risk scores range from 0.5 for the most conservative to 10.0 for the most aggressive portfolio. The 4.5 portfolio earned the highest composite score of all of the growth portfolios with a one-year return of 0.61% during the December 1, 2017 through December 1, 2018 “review period”.  Wealthfront is one of the earliest robo-advisors and offers tax-loss harvesting, lines of credit, a unique digital “Path” financial advisor.

Other Wealthfront portfolios rounded out the best taxable growth robo-advisor winners.

Minimum investment amount: $500

Management fee: 0.25%

One-year return: 0.61%

2. Wealthfront – with risk score of 6.0/10.00

Minimum investment amount: $500

Management fee: 0.25%

One-year return: 0.44%

3. Wealthfront – with risk score of 5.0/10.00

Minimum investment amount: $500

Management fee: 0.25%

One-year return: 0.01%

Best Taxable Portfolios: Balanced

1. SoFi Wealth – Moderate

Minimum investment amount: $100

Management fee: 0.25%

One-year return: 9.52%

The SoFi moderate portfolio won the “balanced” robo-advisor competition with a 9.52%. Lower allocations to the battered equity sectors in 2018, helped SoFi’s return. SoFi also offers financial advisor access to all of it’s investors. SoFi is better known as a lender and also offers easy access to loan consoliation and fun regional activities for their users.

2. Ellevest Digital – Kids are Awesome Portfolio

Minimum investment amount: $0

Management fee: 0.25%

One-year return: 5.23%

3. Ellevest Premium – Kids are Awesome Portfolio

Minimum investment amount: $50,000

Management fee: 0.50%

One-year return: 5.23%

Portfolio styles - best robo-advisor performance

Best Taxable Portfolios: Income

Ellevest’s portfolio, called “A Place to Call Home” ranked as the income portfolio winner. The ETFs in this one yielded a 6.74% return, aided by the greater concentration in fixed investments. Although targeted at women, anyone is welcome to invest with Ellevest. Financial advisors and career consultants are available at the Premium level.

1. Ellevest Digital – A Place to Call Home

Minimum investment amount: $0

Management fee: 0.25%

One-year return: 6.74%

2. Ellevest Premium – A Place to call Home

Minimum investment amount: $50,000

Management fee: 0.50%

One-year return: 6.74%

3. Ellevest Digital – Start my own Business

Minimum investment amount: $0

Management fee: 0.25%

One-year return: 6.28%

Bonus: How do Robo-Advisors Work?

Best Taxable Portfolios: Conservative

SoFi’s conservative portfolio received the highest composite score with a 10.61% return within the “review period.” The fact that SoFi offers financial advisor access boosted it’s standing in this category. The fact that a conservative portfolio ranked so highly is unusual given that portfolios with greater amounts of fixed, conservative assets typically underperform those with higher percentages of equities.

1. SoFi Wealth – Conservative Portfolio

Minimum investment amount: $100

Management fee: 0.25%

One-year return: 10.61%

2. Betterment Digital – Smart Saver Porfolio

Minimum investment amount: $0

Management fee: 0.25%

One-year return: 1.62%

3. Betterment Digital – 0% Stock Portfolio

Minimum investment amount: $0

Management fee: 0.25%

One-year return: 1.37%

Best Robo-Advisor Offering Socially Responsible SRI Investing

With the popularity of investing with your values, more and more robo-advisors are offering socially responsible portfolios. In fact, the Swell Investing App only offers SRI portfolios.

M1 Finance won the top spot in this category, and also happens to be one of our favorite robo-advisors, offering thousands of investments! In addition to SRI portfolios, M1 Finance offers many other great investment options. Read our M1 Finance review to learn more.

1. M1 Finance

Minimum investment amount: $0

Management fee: 0%

One-year return: 3.24%

2. Ellevest Digital

Minimum investment amount: $0

Management fee: 0.25%

One-year return: 0.59%

3. Wealthsimple Basic

Minimum investment amount: $0

Management fee: 0.50%

One-year return: 0.28%

Although not reviewed for this study, the Swell Investing App is a quick way to add SRI investments to your portfolio.

2019 Best Robo-Advisor Performance Takeaway

The results of this extensive research is a good starting point for your research, but not the only information source to consider.

You’ll notice that due to the ranking factors, robo-advisors with financial advisors, socially responsible portfolios, low fees and firms with tax-advantaged investing tended to come out on top in this survey.

The Nummo survey also used a unique classification metric of asset allocation to categorize the robo-advisors. For example, the Value category allowed an equity allocation of up to 100%, which seems like a a high percentage. This factor underscore the importance of knowing how a survey is completed and whether you agree with the methodology, or not.

Also, this survey included 17 members, yet there are many other robo-advisors that weren’t considered for this report. At Robo-Advisor Pros Reviews, we’ve analyzed more than 26 companies, with more in the pipe line.

So, you might find your favorite robo-advisor was not considered for this study.

Also note that other robo-advisor surveys that solely consider returns will have different results.

As with any information, before investing, it’s wise to compete your own due diligence.

We recommend a quick visit to our Robo-Advisor Selection Wizard to help with your robo-advisor search.

And for a comprehensive Robo-Advisor Drilldown, pick up our Robo-Advisor Comparison Chart.

All data and information used with permission of the Nummo financial management platform. Download the free Nummo Robo Ranking 2019.

Disclosure: Please note that this article may contain affiliate links which means that – at zero cost to you – I might earn a commission if you sign up or buy through the affiliate link. That said, I never recommend anything I don’t believe is valuable.

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Barbara A. Friedberg, MBA, MS

Barbara A. Friedberg, MBA, MS

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