OCBC RoboInvest Review – How good is OCBC’s automated Robo investing platform?

 

Did you know? – OCBC also has a Robo Investing platform.

When I heard about it, I was excited to do a deep dive and check out just how good it is.

How does it stack up against the likes of Stashaway, Endowus, or Syfe?

Is it worth putting your money in?

Note: This post was sponsored by OCBC. All views and opinions expressed in this post are from Financial Horse.

Basics: What is OCBC RoboInvest?

The core concept of OCBC RoboInvest works like this – there are 36 different portfolios to choose from, including thematic and diversified portfolios.

The picture below gives you an overview of the many themes you can choose from – ranging from Electric Vehicles, Cyber Security, China Growth etc.

You have full control over how much you want to put in, when you want to put money in, and when you want to withdraw. You can also decide if you prefer to do a lump sum investment, or average in on a monthly basis.

The smallest investment you can make each time is as low as US$100.

How OCBC RoboInvest differs from other Robos?

Where OCBC RoboInvest differs from the other Robo platforms, is this.

Instead of simply tracking the market performance via indexing, OCBC RoboInvest actively tries to outperform the market.

Yep, you read that right – this is an active RoboInvestor.

The fund manager (or algo) tries to generate alpha for you, instead of simply capturing market returns.

AND – unlike using pure ETFs like most other Robos, OCBC RoboInvest is brave enough to invest directly in the underlying stocks.

You can see the split below, and quite a few of the OCBC RoboInvest portfolios are investing directly in stocks, instead of using ETFs or Funds like most of the other roboadvisors.

No.	Portfolio Name	ETFs/Equities
1	Aggressive	ETF
2	All Weather	ETF
3	Asia Tech	Listed Equities
4	Australia REITS	Listed Equities
5	Australian Financials	Listed Equities
6	Balanced	ETF
7	Cautious	ETF
8	China Growth	ETF
9	Cloud Computing	Listed Equities
10	Defensive	ETF
11	Dogs of the Dow	Listed Equities
12	Future World	ETF
13	Gen Z Winners	ETF
14	Growth	ETF
15	Hong Kong Consumer	Listed Equities
16	Hong Kong Technology	Listed Equities
17	Impact Investing	ETF
18	Mainland Europe Financials	Listed Equities
19	Mainland Europe Healthcare	Listed Equities
20	Mainland European Technology	Listed Equities
21	Precious Metals	ETF
22	Resurgent Industrials	Listed Equities
23	Singapore Cash is King	Listed Equities
24	Singapore Stable REITS	Listed Equities
25	Stable Aussie Giants	Listed Equities
26	Stable Singapore Giants	Listed Equities
27	Stable US Consumer Giants	Listed Equities
28	Stable US Giants	Listed Equities
29	Stable US Healthcare Giants	Listed Equities
30	Stable US Industrial Giants	Listed Equities
31	UK Financials	Listed Equities
32	US Financials	Listed Equities
33	US Tech Leaders	Listed Equities
34	Yummy	Listed Equities

 

There are 2 types of portfolios on offer:

• Thematic Portfolios (play on themes like China Tech or Cybersecurity)
• Diversified Portfolios (more diversified portfolios with broader exposure)

How does OCBC RoboInvest pick stocks? Thematic Portfolios

And of course, my next question to OCBC was – How do you pick stocks?

How do you decide what stocks go into the portfolio, and when do you decide to sell?

This was what they said:

“Over 60 quantitative factors are processed by the RoboInvest quant algorithms across Quality, Value, Momentum, Growth, and Volatility.

The algorithm dynamically selects factors, adjusts weightages and thereby shortlist the portfolio constituents. The quant algorithm runs during trading hours and proposes rebalancing opportunities due to credit quality changes or base-factor changes. This is then validated by investment managers before the rebalancing opportunities are proposed to clients.”

Okay, fair enough.

It’s basically a proprietary model, that looks at a number of factors to generate alpha.

To be fair – I wouldn’t expect them to share the exact details of how they do it too. That’s like asking a Michelin Star chef to share his recipe.

So I dug around the website, and tried to get more information.

This is the asset allocation for their China Growth Portfolio:

Cyber Security Portfolio:

Cloud Computing Portfolio:

Electric Vehicles Portfolio:

As you can see, it’s very interesting indeed.

It does look like OCBC RoboInvest is actually doing stock picking.

It’s not like the other platforms where they just select a range of ETFs for you to capture the broad market return.

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Diversified Portfolios

OCBC RoboInvest also has diversified portfolios if you prefer.

They are split into:

• Defensive portfolio
• Cautious portfolio
• Balanced portfolio
• All weather portfolio
• Growth portfolio
• Aggressive portfolio

For example, the defensive portfolio is very heavy on bonds with some stocks thrown in:

 

The aggressive portfolio is mostly stocks and commodities with some bonds thrown in:

And the balanced portfolio has a nice mix of bonds, stocks and commodities:

These diversified portfolios are mostly constructed out of ETFs, and you can see an example of the ETFs they use below:

 

Historical Performance of OCBC RoboInvest

Historical numbers are very strong.

I’ve set out the 1 year returns as at 30 September 2021 below.

Strategy Name	1Y Returns(%) (as at 30 Sep 2021)
US Financials	80.65%
Australian Financials	58.66%
Hong Kong Technology	54.99%
Mainland Europe Financials	46.57%
Future World**	36.09%
Impact Investing**	32.92%
Mainland European Technology	32.41%
Resurgent Industrials	30.09%
Stable US Industrial Giants	29.43%
UK Financials	26.76%
Australian REITs	26.34%
Dogs of the Dow	25.97%
US Tech Leaders	23.77%
Mainland Europe Healthcare	23.13%
Stable Singapore Giants	22.39%
Cloud Computing***	21.58%
Gen Z Winners***	18.76%
Stable US Healthcare Giants	17.72%
Aggressive	17.39%
Growth	16.57%
Stable US Consumer Giants	16.28%
Stable Aussie Giants	16.13%
Singapore Cash is King	14.15%
Stable US Giants	13.09%
Balanced	12.18%
Hong Kong Consumer	10.91%
Cautious	8.76%
Singapore Stable REITs	7.82%
Yummy	6.49%
Asia Tech****	6.42%
Defensive	4.58%
All Weather	2.66%
China Growth***	-5.42%
Precious Metals**	-7.85%

 

Fair enough, the past 12 months have been very strong across all markets, but the fact that OCBC RoboInvest is able to capture a nice chunk of these returns, and even outperform some benchmarks is really strong.

 

Fees of OCBC Roboinvest

Fees are a flat 0.88% per year on total value of your investments held with OCBC RoboInvest.

For the portfolios that invest directly in stocks, you won’t need to pay any ETF / Fund fees on top of the flat 0.88%, so it’s a pretty good deal.

There are no custodian fees layered on top of that, but any forex fees will be absorbed by the customer.

Segregated Accounts

Another advantage I really like is that all customer holdings are held in segregated accounts in HSBC and Citi.

So in the low chance that the platform goes bankrupt, the stock holdings can still be traced back to you. 

Ease of Onboarding onto OCBC RoboInvest

And.. if you already have a bank account with OCBC, OCBC RoboInvest is fully integrated into the banking platform.

This means that you can invest into OCBC RoboInvest directly from your OCBC Digital App, or Internet Banking website.

Whereas with other roboadvisors like StashAway or Endowus you’ll need to create an account there, then manually transfer the funds over from your OCBC account to fund it.

For lazy people like me, I think this is a great feature. Anything to make my life more convenient.

What I like about OCBC RoboInvest

Try to outperform / generate alpha

I actually really like that OCBC RoboInvest actively tries to outperform the market.

So many funds out there just try to replicate the market, instead of trying to outperform.

So big kudos to them for going down this path.

How good will the returns be?

Of course – the biggest question then is how good are the returns?

Historical returns are generally strong.

However, there is a bit of uncertainty going forward because the methodology used to pick stocks is a proprietary, black box model that you can’t really evaluate.

So ultimately at the end of the day, you’ll just need to trust that OCBC can replicate the same returns they had the past year going forward.

Custodian held in your name

I really like that all the shares are held in a segregated account.

So in the event their platform partner WeInvest goes under, you’ll still be able to get all the shares that belong to you – because of the segregated account holding structure.

This is a must have feature in my view, and in 2021 there’s very little excuse for any roboadvisor to not adopt this structure.

Low fees (considering they invest in stocks and try to generate alpha)

Frankly, considering that OCBC RoboInvest invests directly in stocks and tries to outperform the market, 0.88% fees are generally pretty cheap.

As an active platform, the right comparison should be against unit trusts, many of which have fees in the 1% – 2% range.

There are many other robo advisors there that buy funds / ETFs, and result in you paying double fees – one to the Robo Platform, and one to the Fund / ETF.

With OCBC RoboInvest, if you selected a portfolio that only uses stocks, you only pay 1 flat fee to OCBC RoboInvest and no double fees to any ETF / Fund.

So I actually really like this.

OCBC RoboInvest

When you try to outperform the market via active management, returns are the crucial factor.

Over the past 12 months, returns have been frankly amazing.

Can OCBC RoboInvest keep this up going forward?

That’s the million dollar question.

Who is the target audience of OCBC RoboInvest?

I asked OCBC who their ideal audience was, and this was their answer:

1. Beginner Investors – early 20 or early 30s, first time investors who do not want to actively monitor the market
2. More experienced investors who want to diversify into specific themes like Cybersecurity or Electric Vehicles

And I think they hit the nail on the head right there.

For these 2 groups of investors, especially those who don’t want a plain vanilla ETF approach, and want a fund manager who will try to actively outperform, OCBC RoboInvest could be a great choice.

The creative & unique themed portfolios also stand out to me as interesting complements for any investor’s portfolio.

Historical returns are good, fees are decent, and you get the OCBC brand name to give you peace of mind as well.

OCBC RoboInvest – How to sign up?

If you’re keen to try out OCBC RoboInvest, signup here! 

Note: This post was sponsored by OCBC. All views and opinions expressed in this post are from Financial Horse.

 

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