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Explorer ○○○

AAII Robo Advisers

The June 2020 issue of AAII has a very good article on Robo Advisers. YBB, if you are inclined, you would do the readers a favor by offering your comments on this. I am not as informed, so will defer this to others. I do  not use this approach, but may well be good for some one younger?

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Frequent Contributor

Re: AAII Robo Advisers

Ok, will look. It is now in the pile of non-urgent mail we leave in an area so that any C-19 can die. Urgent mail goes through elaborate handwashing routine.

YBB
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Frequent Contributor

Re: AAII Robo Advisers

May require subscription,   https://www.aaii.com/journal/article/11699-coronavirus-returns-for-robo-advisers-expose-differences

Evaluation is to 3/31/20 only, so it captured most of the downside but not much of the rebound.

Focus was generally for 50%-70% equity allocation [moderate-allocation] but more on those closer to traditional 60-40.

Worst were:

   MS with energy overweight in equities

   WFC with more HY and EM in fixed-income

   Schwab/SCHW with value equity tilt [another story I saw was that several Schwab ETFs with heavy

     Schwab holdings are undergoing huge turnovers. Schwab portfolio shifts are suspected]

Generally, SRI/ESG portfolios did better. [IMO, that is another quality overlay]

Sharpe Ratios and SDs are shown in the following image.

YBB
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Re: AAII Robo Advisers

I think AI will become a growing phenomenon in investing. It only needs to outperform its human competitors to gain traction. Having said that, it will only be as good as the humans who create it, unless it can learn and adapt. If markets are dominated by AI perhaps they will become truly efficient, where price discovery finds a formula. It would put thousands out of work, so will meet resistance.

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