OCBC RoboInvest Review – Earn 5.67% p.a.* projected dividend payout with the Income Portfolio or invest in 37 other portfolios

I get a lot of questions from readers who want to invest their money for a higher return, but they don’t want to stock-pick or don’t have the time and energy to monitor their portfolio closely.

One way is to consider robo-advisors.

With OCBC RoboInvest, you can start with just USD 100, and choose from 38 portfolios to invest your money.

You can choose from:

• 6 diversified risk-based portfolios

from Aggressive to Growth, to All-Weather to Cautious. 

• 31 thematic portfolios

Thematic portfolios such as US Tech Leaders and Cloud Computing, or geography specific portfolios such as Singapore Stable REITs, Stable US Industrial Giants and Australian REITs.

RoboInvest’s newest portfolio?

• Income Portfolio

The Income Portfolio aims to help you create dividend income, and has a 1 year return of 7.00% (as of 31 August 2023)*.

There is no lock-in period and everything is done seamlessly via the OCBC Digital app.

Interested? Let’s dive into OCBC RoboInvest below.

This article is sponsored by OCBC. All views and opinions expressed here are from Financial Horse.

The Basics – What is OCBC RoboInvest?

OCBC RoboInvest offers 38 portfolios across 7 markets that you can choose from.

There is no lock-in period, and you can start from as low as USD 100.

You can also fund everything directly via your OCBC accounts, all within the OCBC Digital app itself.

If you prefer a dollar cost averaging (DCA) style, RoboInvest also offers a monthly investment plan for selected portfolios.

Choose from 38 Portfolios across 7 Markets

There are 6 diversified (risk-based) portfolios, 31 thematic portfolios and the latest income portfolio.

The portfolios are usually rebalanced every quarter or semi-annually.

OCBC will only proceed with the rebalancing after you have given consent, and you may choose to skip the rebalancing as well (only exception is the income portfolio which is automatically rebalanced).

These are the 6 diversified (risk-based) portfolios:

• Aggressive
  • significant allocation into equities that are globally diversified with some exposure to gold
• Growth
  • aims to deliver long-term capital gains through significant investments in equities, and some allocation to bonds and gold
• Balanced
  • diversified across bonds, equities, and gold, aiming to help investors to balance between moderate capital gains and some downside-risk mitigation
• All Weather
  • Balance between capital preservation and capital appreciation, diversified across fixed income, equities, and gold
• Cautious
  • consists largely of fixed income instruments
• Defensive
  • heavy allocation into fixed income with some allocation into equities

There are also 31 thematic portfolios that range from tech, healthcare and beyond.

Some examples include:

• Electric Vehicle
  • constructed from stocks listed in the US that are involved in the end-to-end value chain and production of electric vehicles
• Future World
  • through investments in several ETFs, the Future World portfolio provides diversified exposure to emerging trends that are likely to develop into major investment themes in the future
• Cloud Computing
  • stocks listed in the US that are involved with cloud computing
• Gen-Z Winners
  • diversified exposure to sectors that are likely to benefit from spending by the Gen-Z generation. The portfolio is currently tilted towards internet, video-gaming, online retail and digital payments.
• Impact Investing
  • focuses on various environmental investment themes, offering exposure to companies screened for environmental, social and governance (ESG) characteristics
• Cyber Security
  • stocks listed in the US that are involved with cyber security services and development
• Metaverse
  • constructed from stocks listed in the US that are directly or indirectly affiliated with the development of the Metaverse concept
• Yummy
  • diversified exposure to selected stocks of well-known US companies that are primarily involved in food production

There are also geography specific portfolios, such as:

• US Tech Leaders
  • diversified exposure to selected stocks in the US IT sector. Stocks in this sector exhibit high growth potential
• China Growth
  • diversified exposure to Chinese equities. Currently, the portfolio is tilted towards Chinese Consumers, Chinese Tech sector, China Internet Sector and non-state-owned enterprises.
• Asia Tech
  • Asian companies that have significant business exposure to the IT sector in China, Japan, Taiwan and India
• Stable US Healthcare Giants
  • diversified exposure to selected stocks that exhibit relatively lower volatility in the US healthcare sector
• Stable Singapore Giants
  • diversified exposure to selected high cap stocks with relatively lower volatility listed on SGX
• Singapore Stable REITs
  • Predictable, high dividend-yielding REITs listed on SGX
• Australian REITs
  • diversified exposure to REITs listed in Australia
• UK Financials
  • diversified exposure to selected stocks of financial companies in the UK

Which portfolio to choose? You can choose more than 1

These are the top performing investment portfolios based on their past 1 year returns (as of 31 August 2023):

• US Tech Leaders
• Mainland Europe Financials
• Cloud Computing
• Mainland European Technology
• Resurgent Industrials
• Aggressive

As you can see, Tech has done very well since the 2022 lows.

Of course, the question is whether that kind of performance can be replicated the next 12 months.

Whatever the case though, you can see that there is a whole range of thematic portfolios that can help you invest in whichever theme / geography you’re interested to get exposure to.

Even more exotic ones like UK banks, Australian REITs, US Healthcare etc are included.

Which are the most popular Investment Portfolios on OCBC RoboInvest?

According to OCBC, these are 6 popular investment portfolios at the moment:

• Income
• US Tech Leaders
• Cloud Computing
• Aggressive
• Growth
• Balanced

The Income Portfolio in particular looked interesting, so I dug a bit deeper. 

OCBC RoboInvest – Income Portfolio

RoboInvest’s newest portfolio is the Income Portfolio.

It’s projected to be under a “medium” risk level, and designed to help you create a stream of passive income.

The goal of the Income Portfolio is “to generate income and provide robust capital growth over the medium to longer term. The portfolio invests in a range of asset classes including debt securities, equities, and liquid alternatives. The portfolio also actively allocates to, and within, different asset classes and geographies based on the team’s fundamental views.”

According to OCBC, it has a medium risk level, and a 1 year return of 7.00%* (as of 31 August 2023).

Here’s the asset allocation:

Top constituents:

• Global X S&P 500 Covered Call ETF
• SPDR Portfolio S&P 500 Growth ETF
• Vanguard FTSE All-World High Dividend Yield UCITS ETF
• Invesco S&P 500 High Dividend Low Volatility UCITS ETF
• Xtrackers USD High Yield Corporate Bond UCITS ETF 1D
• iShares J.P. Morgan $ EM Bond UCITS ETF
• iShares USD Treasury Bond 20+yr UCITS ETF
• iShares US Property Yield UCITS ETF

As you can see it’s a mix of equity ETFs (like the S&P500), and bond ETFs (Treasury and Corporate Bonds ETFs).

This is quite a different approach from other income funds which primarily use bond funds, which usually incur higher fees than ETFs (so you may save on fees using OCBC’s approach).

The minimum investment amount for the Income Portfolio is USD 2,000.

Portfolio rebalancing is done quarterly.

*Note: Data is extracted from WeInvest. The projected dividend yield is as of 31 August 2023, calculated using the average dividend yield of the portfolio in the last 6 months and is meant for illustrative purposes only. Allocation and constituents as of 31 July 2023. Performance data is as of 31 August 2023. All returns are calculated in portfolio currency. Past performance of the portfolio is not indicative of future performance. 

OCBC RoboInvest – Electric Vehicle

The Electric Vehicle portfolio is also one of OCBC’s popular thematic portfolios.

This “is constructed from stocks listed in the US that are involved in the end-to-end value chain and production of electric vehicles. A proprietary methodology has been applied to ensure that only high-quality stocks are included in the portfolio. Stocks in the portfolio have been screened for various factors including Earnings per Share (EPS), Return on Invested Capital (ROIC) and growth.”

For investors who are bullish on Electric Vehicles due to the longer-term secular trend of green energy and zero carbon emission.

Investors who want to invest in the EV theme, but don’t want to stock pick.

This can be a useful way to get exposure to the industry in your portfolio.

1 year return is at 7.74%** (as of 31 August 2023), but as you can imagine an electric vehicle portfolio has a high risk level due to the high volatility of these stocks.

Asset allocation is below, almost primarily equities:

While here are the top constituents:

• Taiwan Semiconductor Manufacturing Co Ltd
• ASML Holding NV
• Broadcom Inc
• Cisco Systems Inc
• BHP Group Ltd

The minimum investment amount for the Electric Vehicle portfolio is USD 8,000.

Portfolio is rebalanced quarterly.

**Note: Data is extracted from WeInvest. Allocation and constituents are as of 31 July 2023. Performance data is as of 31 August 2023. All returns are calculated in portfolio currency. Past performance of the portfolio is not indicative of future performance.

OCBC RoboInvest – Stable Aussie Giants Portfolio

There are also more unique themes that you can get exposure too – for example the Stable Aussie Giants Portfolio.

This “provides diversified exposure to selected stocks with relatively lower volatility listed in Australia. The portfolio is constructed to only include stocks with relatively higher market capitalization. To provide potential for capital appreciation, stocks with relatively high valuation are excluded from the portfolio. A robust, systematic process is followed in constructing the portfolio. The portfolio is constantly monitored and regularly rebalanced.”

I know many Singapore investors like to invest in Australia for the diversification and yield, and this could be one way to do it if you don’t want to stock pick individual names.

Especially for investors who aren’t keen on continually monitoring the Australian market, this is a good way to add geographical diversification into your portfolio, whilst having the assurance that experts are in charge of regular rebalancing.

1 year return is 5.65%*** (as of 31 August 2023) and risk level is medium.

For investors who want to get exposure to Australia but don’t know where to start, this could be worth looking at.

Top constituents:

• Wesfarmers Ltd
• Telstra Group Ltd
• Woolworths Group Ltd
• Coles Group Ltd
• Amcor plc

The minimum investment amount for the Stable Aussie Giants Portfolio is AUD 2,000.

Portfolio is rebalanced quarterly.

***Note: Data is extracted from WeInvest. Allocation and constituents are as of 31 July 2023. Performance data is as of 31 August 2023. All returns are calculated in portfolio currency. Past performance of the portfolio is not indicative of future performance.

Monthly Investment Plan (MIP)

To invest with RoboInvest, you can start with a lump sum investment amount or select a monthly investment plan (MIP).

The minimum investment sum depends on the portfolio you choose.

The MIP option can help investors automate their investing via a DCA approach, and this helps investors stay committed to investing for the long-term.

You can invest in the following portfolios using monthly investments:

• Aggressive
• All Weather
• Balanced
• Cautious
• China Growth
• Defensive
• Future World
• Growth
• Gen Z Winners
• Impact Investing
• Precious Metals

For the other portfolios, you can enable a monthly investment after you have made the initial lump sum investment.

The portfolio’s minimum monthly investment is 10% of its minimum starting lump sum investment.

You can cancel your monthly investment at any point in time.

Fees of OCBC RoboInvest

The management fee for OCBC RoboInvest is 0.88% of your total investment value per year.

This fee will be computed and charged monthly based on the number of calendar days in each month.

Additional exchange fees and charges apply, which vary depending on the markets and trading channels used to execute the orders.

I know it looks on the high side compared to an ETF, but in all fairness these are actively managed portfolios, where a fund manager picks the underlying components and regularly rebalances the portfolio for you.

So the fees need to be looked at in this way, as an actively managed product instead of a purely passive ETF.

All assets are custodised and held in your name

A great feature that I really like is that all the assets are held in a segregated account under your name.

So even in the unlikely event that something were to happen to the platform, the shares are still held by you in your name because of the segregated account holding structure.

This is a must have feature in my view, and in 2023 there’s very little excuse for any roboadvisor to not adopt this structure.

What kind of investors can consider OCBC RoboInvest?

The way I see it, OCBC RoboInvest might appeal to 2 types of investors:

1. Investors who don’t have the time (or don’t want to) actively monitor their portfolio
2. More experienced investors who want to diversify into specific themes like Australia or Electric Vehicles

For these 2 groups of investors, especially those who don’t want a plain vanilla ETF approach, OCBC RoboInvest could be worth looking at.

The key difference is that unlike a plain ETF, OCBC RoboInvest has a fund manager who actively tries to outperform the market.

You can pick from the basic set of aggressive / balanced / defensive portfolios.

Or you can also pick the themed portfolio, and invest specifically in sectors that you are bullish on (for e.g. Australian real estate, or Electric Vehicles etc).

And on top of that you get the OCBC brand name to give you peace of mind as well.

OCBC RoboInvest Promotion

Interested in RoboInvest?  Don’t miss out on this exclusive promotion for Financial Horse readers!

Get SGD 30 cash if you invest a minimum of SGD 5,000 in any portfolio – and OCBC has 38 portfolios for you to choose from!

Sign up here for the the SGD 30 cash promotion!

Promotion ends on 31 December 2023. Terms and conditions apply.

Start from just USD 100, with no lock-in period

To be eligible, you just need to be 18 years old and above, and hold any OCBC deposit account with digital banking access.

Get started with OCBC RoboInvest here!

Note: OCBC RoboInvest is not applicable to US persons, or persons residing in the UK, EU, Russia, Belarus or within the EEA

Get started with OCBC RoboInvest by applying via Digital Banking.

Click here!

 

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