Titan Invest Review 2022 | Hedge Fund Strategy for Small Investors

Expert Analysis of Hedge Fund Investment App

Titan Invest wants to help the little guy or gal invest like a big-time hedge fund manager. This Titan Invest review digs into every corner of the app, including the strategy and Titan mobile app design. As a former portfolio manager, I put Titan under the microscope, investigated the features, and compared the Titan app against other robo-advisors.

The company’s unique selling proposition is that Titan investors have a chance to compete with the formerly inaccessible traditional hedge fund players. Titan Investing just answered the call for cryptocurrency investing with the recently launched Titan Crypto actively managed fund.

Titan Invest offers 3 hedge fund type portfolios:

• Titan Flagship Fund – launched February 20, 2018
• Titan Opportunities Fund – Small- and mid-cap fund launched August 17, 2020
• Titan Offshore Fund – International fund launched April 6, 2021

Titan Crypto is a new offering with an actively managed portfolio of cryptocurrency assets.

What’s Hedge Fund Investing?

A hedge fund employs a variety of investment strategies with the goal of earning alpha, or above market investment returns. Frequently hedge funds use leverage and derivatives. Hedge funds are predominantly available to accredited investors (those who have a high net worth and or income).

Titan Invest is breaking down the hedge fund style investing wall, providing access to any investor with $100.

Titan Invest Founders

Clayton Gardner is Titan’s co-creator along with co-founders Joe Percoco and Max Bernardy. They couple real-world investment experience with prestigious degrees from UPenn’s Wharton School of Business and Stanford University. All three have worked at hedge funds, and they have raised $70.5 million in funding from Y Combinator, General Catalyst, Andreessen Horowitz, BoxGroup, Ashton Kutcher’s Sound Ventures and a group of professional athletes and celebrities including Odell Beckham Jr., Kevin Durant, Jared Leto and Will Smith.

Who is Titan Invest Best For?

Titan Invest might be a good fit for the aggressive to moderate, portion of your investment portfolio. If you strive to beat the market over the long term then your goals would align with Titan’s as a main objective is to deliver outstanding long-term investment returns (net of fees) in excess of the stock market averages.

Titan Invest might be for you if you’re a small investor and want to get started investing in the financial markets with as little as $100.

Titan is built for the investor interested in actively managed investing strategies.

Titan investing might be for you if you have a passive investment portfolio, either with another robo-advisor or on your own and want to dip your toes into active investing. Titan could be a great way to try out hedge fund investing.

Titan Crypto is ideal for investors who want a managed crypto fund with a $100 minimum investment amount and low management fees.

How Titan Works? Titan’s Investment Strategy

Titan Hedge Fund Strategy

The Titan investment strategy invests each investor’s money in two ways. The first is the core stock investment portfolio.

The second is a hedge security which aims to protect against large losses in your Titan portfolio during market downturns. The Titan hedge is discussed below.

Titan offers three strategies:

• Titan Flagship – Large-cap, US focused stocks with an average market cap of $500 billion. Seeks companies that can beat the returns of the S&P 500.
• Titan Opportunities – Small/mid-cap US focused stocks with an average market cap of $9 billion. Seeks small companies with the potential to grow at exceptional rates.
• Titan Offshore – International growth companies from emerging and developed markets.

Titan Review of Stock Selections – How Titan Identifies Portfolio Holdings

SEC rules require large hedge fund managers to report their holdings quarterly.  While these filings often can offer great insights, for many reasons they can also be misleading and filled with pitfalls for casual readers.  Titan’s proprietary algorithm analyzes investment activity across thousands of hedge fund filings, ultimately only filtering insights from about ~5% of the total pool.

The Titan hedge fund investment algorithm filters through these filings by examining a host of factors ranging from turnover (how long a hedge fund owns a stock, on average) to concentration (how many stocks a hedge fund owns, on average). The goal is to invest in only those stocks with the greatest growth potential.

Titan Stocks

After this extensive filtering process, the algorithm returns from 15 to 25 stocks to invest in for each of the funds.

These stocks are updated and rebalanced once a quarter, with about one or two changes being made on average each quarter.

Titan believes that the companies it invests in share common characteristics:

• Wide moat – this makes it difficult for competitors to enter their market.
• Strong cash flows.
• High returns on capital.
• Excellent management teams.
• Attractive growth potential.

Titan’s goal is to invest in businesses with the highest chance of delivering strong long-term returns.

Personalized Titan Hedge Investment

Titan Invest hedges part of your investment according to your individual risk tolerance. Your risk tolerance is determined by a number of factors, including your investing time horizon, investing experience, net worth, income and more.

Generally, more aggressive investors tend to be comfortable with greater market volatility in order to achieve higher long-term returns, while more conservative investors prefer smaller ups and downs in their investment values (even if it means lower long-term returns).

Each Titan investor will have a unique percentage of their portfolio invested in its core stocks. The remainder of your investment will be in the personalized hedge.

The Titan hedge works by investing in an inverse S&P 500 ETF. Here’s how the dynamic inverse S&P 500 ETF works:

• Part of your money is invested in an exchange traded fund or ETF that effectively “sells short” the S&P 500.
• The hedge aims to rise in value when the market drops in value.

Should the S&P 500 stock market index continue to grow, the hedging strategy would likely incur losses and temper the portfolio gains from the stock portion of the portfolio. However, if the stock market took a major dive, the hedging strategy would more likely yield investment gains, tempering losses from the stock portion of the portfolio.

It’s a way to achieve diversification without owning bonds or other non-stock investments.

We think this is an interesting strategy, with potential to beat the market in the long run.

Titan Crypto

The Titan Crypto fund is an actively managed group of cryptocurrency assets. The Titan team researches the crypto market to choose the highest quality digital coins that are expected to outperform during the upcoming 3 to 5 years. The team avoids riskier assets and choose the weights within the portfolio based upon utility, adoption and pricing.

The portfolio is rebalanced to maximize returns while minimizing risks.

Titan Crypto Fees

The fees are straightforward and the minimum is only $100, enabling small investors to dip their toes into the cryptocurrency markets without breaking the bank. There are no additional fees for trading or withdrawals.

$100 – $10,000: $5 per month

$10,001+: 1.0% AUM per year

Titan Returns

While investors love to read about robo-advisor returns and performance, we advise against making investment decisions based upon past performance.

The Titan Invest Portfolios are relatively young, and as of 2021, have only existed during a bull market.

Titan Flagship portfolio launched roughly three and a half years ago, a short time during which to evaluate performance. While the Opportunities Fund commenced in the summer of 2020 and Titan Offshore began in 2021.

The returns are net of fees, which means performance after fees are paid.

Flagship Returns

	Titan Flagship	S&P 500
Cumulative Return	97.1%	68.4%
Annualized Return	22.4%	16.8%

Data source: https://cdn.titanvest.com/library/Flagship_Tearsheet_063021.pdf

Opportunities Returns

	Titan Opportunities	Russell 2000
Cumulative Return	66.2%	47.1%
Annualized Return	79.5%	56.0%

Data source; https://cdn.titanvest.com/library/Opportunities_Tearsheet_063021.pdf

Titan Offshore Portfolio Returns

	Titan Opportunities	MSCI ACWI ex USA
Cumulative Return	1.7%	4.3%
Annualized Return	7.3%	19.8%

Data source; https://cdn.titanvest.com/library/Offshore_Tearsheet_063021.pdf

See full disclosures on Titan’s website.

Titan’s returns have been strong. But, understand that performance data must be viewed with caution as the past does not determine tomorrows returns.

Accounts

The Titan app is available to U.S. citizens, green card holders, and holders of certain visas.

Account types include individual investment taxable accounts, Roth and Traditional IRAs.

Titan IRA

Due to their long-term nature, Titan believes that their investment strategy is ideal for IRA retirement accounts.

“Titan’s flagship investment strategy invests your money in what we like to call “long-term compounders” – businesses whose characteristics make them ideal for a long-term portfolio.” ~Titanvest website

The companies in the Titan IRA are typically high-quality firms with high return on capital and excellent growth prospects.

Titan offers both traditional and Roth IRA accounts.

Fees and Minimums | Titan Hedge Fund Portfolios

The account minimums vary by account and fund:

• $100 minimum for a taxable brokerage account invested in Flagship.
• $500 minimum for IRA retirement accounts invested in Flagship.
• $10,000 or 2 referrals for Opportunities and Offshore strategies.

Minimums are computed based on deposit value across Titan, not market value.

Titan’s advisory fee structure is simple:

• Account value of $9,999 or less – $5.00 per month.
• Account value of $10,000 or more – Annual fee of 1.0% of assets under management. That means if you invest $500, then you’ll pay $5.00 per year.

Unlike typical hedge funds, there isn’t a performance fee. When your Titan investments go up, you keep the profits (net of the management fee).  Typical hedge funds charge performance fees which are a percent of profits once a certain return is reached.

The 1.0% management fee is on the high end of the robo-advisory spectrum yet much lower than typical hedge funds. The generous Titan referral promotion which eliminates with management fee entirely with the referral of four friends, softens the fee substantially. When comparing the Titan Invest portfolios to typical hedge funds, the fees are substantially lower.

Titan Invest Promotion

Subtract 0.25% Off Your Fees for Each Referral (Refer Four Friends = 0% Fees)

For each friend you invite to Titan who joins, you both get 0.25% off your 1.0% management fee.

If you sign up four of your friends, then your management fees are eliminated – for life. That is an amazing deal. We’ve never seen a promotion this generous.

Is Titan Invest Safe?

Titan Invest is a registered investment advisor and bound by the legal requirements of the Securities and Exchange Commission (SEC). All accounts are SIPC-insured up to $500,000.

The accounts are held and cleared through Apex Clearing, one of the leading financial technology custodians.

The Titan Invest app protects all your personal data and financial information with SSL and 256-bit encryption.

Note that investments in stocks are subject to principal risk (you may lose part of your investment if you sell after a stock’s value declines).

Read on to find out how the robo-investing app has performed so far.

Titan Invest AUM

As of July 20, 2021 Titan boasts $600 million assets under management (AUM) and 30,000 accounts. Titan’s AUM is published quarterly in the SEC mandated ADV form.

For comparison, check out our Robo-Advisors With the Most Assets Under Management.

Mobile App

The Titan iOS and Android apps are geared for simplicity. They are available in the Google Play and iTunes stores. The sign-up process is quick and within a few minutes you’re invested in a basket of high-quality stocks.

Although Titan replicates hedge fund investments, the investment strategies does not seem overly speculative or aggressive for an actively managed portfolio. You’ll be investing in many high-quality companies.

Mobile Titan Invest app users are happy with a 4.6 out of 5.0 customer review score on Google Play and an impressive 4.8 out of 5.0 customer rating on iOS.

Transparency

Titan Invest strives for transparency which is why they have beefed up their performance and reporting data:

Titan provides comparisons of their returns against popular investment benchmarks. Titan also discloses their investment portfolio!

Titan Invest Pros and Cons

Pros

• Invests in high-quality stocks for long-term wealth building.
• No lock ups, you can access your money within 2 to 4 business days.
• Titan Investing Content – The Titan research is thorough and comparable to expensive research reports. Their education portal is superb.
• Titan Invests investment strategy has the potential to beat the market over the long run.
• The opportunity to refer four friends and receive no-fee money management for life is a true cost-saver. Even with just 2-3 friend referrals, you’d lower your fee to the same level as most passive robo-advisors.
• Direct access to their Investment team and customer support team is available through email, live chat, and phone.
• Syncs with Mint, Personal Capital, and TurboTax.
• Instant deposits allow your money to begin working immediately.

Cons

• The major disadvantage of Titan is the 1.0% AUM fee. Most robo-advisor platforms, even those that are actively managed, charge less than 1.0%. There are even lower-priced platforms that provide investment management and financial advisors such as SoFi Invest and Ellevest.
• Titan is a new investment app and has a short evaluation window. In the short term, it’s difficult to judge an investment strategy’s success.
• Does not offer tax-loss harvesting, live advisors, financial planning or other features available at competitors. Other robo-advisors with tax-loss harvesting are available.

Comparison

The Titan Invest platform is unique, so all comparisons should be viewed through that lens.

When compared with a typical hedge fund, Titan Invest is more affordable and transparent. The small investor can invest with Titan, and there’s one management fee, not performance fees like at the typical traditional investment manager. Finally, your money is liquid and can be withdrawn from the Titan Invest app, at any time.

Comparing Titan Invest with other robo-advisors is a challenge.

The first hedge fund robo-advisor, Hedgeable, closed its doors to retail investors. Thus, for investors seeking an active hedge fund robo-advisor with no minimum investment amount, Titan doesn’t have many competitors.

Most robo-advisors follow a passive, index fund-based investment strategy. We aren’t aware of any robo-advisors that have Titan’s investing approach.

It’d be appropriate to compare Titan against other actively managed robo-advisors, but not many exist. And, each actively managed robo-advisor offers their own strategy, highlighting the difficulty of comparison.

M1 Finance comes close as a “DIY” investing / trading platform. It has a hedge fund-type portfolio investment option, although it simply copies hedge fund filings verbatim instead of cleansing the filings according to specific long-term focused factors like Titan does. The basic M1 Finance investment option is free.

Personal Capital uses several active strategies, and also offers financial advisors for an 0.89% AUM fee.

There are several other actively managed robo-advisors including T.Rowe Price ActivePlus Portfolios and Merrill Edge Guided Investing.

Conservative investors might prefer to supplement the Titan Invest account with bond or cash-type fixed income exchange traded funds, target date funds, or another robo-advisor.

Ultimately, a Titan Invest comparison is difficult, due to its unique investment style.

FAQ

Titan Invest Review Wrap Up – Is it Worth it?

Titan Invest’s mission is two-fold:

1. Grow your capital at a high rate of return over the long term.
2. Empower you to become a better investor.

It’s too soon to evaluate whether Titan has achieved its long-term objectives.

What we like is that the investment approach is sound and easy to understand. Choosing top stocks based on what the world’s best investors own, filtered by profit- and quality-focused metrics, seems like a reasoned investment approach. Hedging the portfolio with a “short” fund may also make sense for the more conservative investor.

How the approach plays out over the long term remains to be seen.

The 1% management fee is high when compared with other robo-advisors. Yet Titan aims to outperform other robo-advisors net of its fee. Also, the opportunity to reduce or eliminate the fee for life by referring four friends is compelling.

The $100 minimum investment amount makes dipping your toes into the Titan hedge fund investment approach accessible to many.

All in all, we like Titan as a supplement to your other investments. For investors seeking the opportunity to beat the market, this is a viable option. Plus, the performance record to date is impressive.

To learn more, visit the website.

As a reminder, all investments in the financial markets are subject to risk as investment values go up and down.

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This is a sponsored post with Titan Invest (“Titan”). All opinions are our own. This is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services. Titan uses a proprietary algorithmic strategy in selecting recommendations to advisory clients. Please see Titan’s website (https://www.titanvest.com/) and the Program Brochure (available on the website) for more information. Certain investments are not suitable for all investors. Before investing, consider your investment objectives and Titan’s fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Titan’s registration as an SEC registered investment adviser does not imply a certain level of skill or training and no inference to the contrary should be made. Nothing here should be considered as an offer, solicitation of an offer, or advice to buy or sell securities. The above content is for illustrative purposes only to demonstrate products, services and information available from Titan. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections, are hypothetical in nature and may not reflect actual future performance. Performance results are net of fees and include dividends and other adjustments. 2020 YTD results are from 1/1/20 through 1/17/20. 2018 results are from Titan’s launch date of 2/20/18 through 12/31/18. All-Time IRR is from Titan’s launch date of 2/20/18 through 1/17/20. All-Time IRR is the actual internal rate of return. All performance figures represent performance of a hypothetical account created on Titan’s inception date of 2/20/18 using Titan’s investment process for an aggressive portfolio, not an actual account. All Titan performance results include the use of a personalized hedge for a hypothetical client with an “Aggressive” risk profile; clients with “Moderate” or “Conservative” risk profiles would have experienced lower returns. Please visit https://support.titanvest.com/investment-process/hedging for full disclosures on our hedging process. See Titan’s website for full performance disclosures.

By signing up for Titan from this page, you acknowledge your receipt of the Wrap Fee Brochure and Solicitor Partner Compensation Disclosure. In addition, you understand the new account opening requirements. Solicitors may receive compensation for funded account openings on the Titan app that occur through this referral landing page.

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.