I wrote in my previous blog post that Endowus launched customizable portfolio options in their latest release.
Today, I want to spend some time talking about how I am going to use this new feature for my own investment portfolio.
To set a bit of context, I have been an Endowus client since the start of the year and have been allocating funds in their advised portfolio, splitting 80/20 across equities and bonds.
One key value proposition is that they are able to pool your funds across cash, CPF and SRS and work towards a specific goal (e.g. retirement). The total expense ratio including platform fees would be roughly 1.2% per year – which is reasonable.
Customizable portfolio for custom risk levels
For me, 80/20 is a little too risky for my liking (I’ve also a 100% total stock market portfolio outside of Endowus).
At the same time, 60/40 is too conservative given how bond yields are relatively low and will likely remain low in the foreseeable future.
Since I am relatively young, I am going to take a little bit more equity risk that’s more in line with my own risk appetite. I also want to build a portfolio with some tilts towards China and Asia, which I feel are currently under-represented in benchmark indices. Because this is effectively a bet on the bullishness of the region, I’d expect to take slightly more risk for higher expected returns.
To balance these requirements, I decided to build a customizable portfolio with a 70/30 equities bonds allocation with an China/Asian-tilt.
Building a customizable portfolio
The first step is to add a new goal and select Customize your own portfolio.
Choosing this option allows me to select my own funds and tailor my own percentages and ratios based on my own liking.
The next step is to acknowledge that you are not accepting Endowus’ advice for this self-select portfolio.
Then you can give it a goal name. I chose to name it Central.
Then comes the step of selecting my funds in their select list of funds, pre-selected so that we enjoy the best-in-class funds at low cost (thanks to their 100% trailer fee rebate – so you save roughly 1% compared to competitors).
I’ll admit looking at the funds list was a little daunting, thankfully for every selected fund there’s also a link to the fund rationale you can read from fees to returns and selection criteria.
So after building my fund portfolio (up to 8 funds), I am given a chance to preview the average annual returns of my new portfolio with its total annual fee.
These fees are transparently broken down at the fees section as well.
And you can finally preview the historical performance before confirming your portfolio via SMS.
So, it’s a simple process which allows any existing Endowus client to tailor their portfolios to their own preferences.
There are many options for customisation, and if you like technology stocks in your portfolio you can also weight your equity portfolio towards technology by playing with the weights.
I think this is a great step towards customisable roboadvisory solutions to cater towards a wider and more diverse group of investors.
By the way, do you know they released their app on the app store [iOS] – it looks AMAZING!