Digital wealth manager StashAway has introduced a flexible option that gives investors more control over their investments by allowing them to customise their portfolios instead of relying on the traditional robo-advisory model of artificial intelligence to assess risk and pick funds on their behalf, the company said on Tuesday.
Flexible Portfolios gives investors the opportunity to choose their own asset classes, decide their financial allocations and change them at any time, StashAway said.
“We really value feedback from our investors and many were keen to create or customise their own portfolios according to their risk appetites,” said Joseph El Am, deputy general manager of StashAway Mena.
“We’re excited that our clients are becoming more and more savvy as they invest with us and so we’re pleased to enable them to have a say while we still deliver on two of our core values: investment intelligence and risk management.”
Robo-advisers are digital investment platforms that calculate an investor’s risk tolerance based on a series of questions.
Using automated algorithms, they then assign investors a tailored investment portfolio of exchange-traded funds or index funds. Typically, they charge lower fees compared with traditional financial advisers and wealth managers.
Retail investors are increasingly seeking direct access to markets with the help of technology, leading to a surge in popularity for zero-commission trading apps such as Robinhood, eToro and Interactive Brokers, as well as robo-advisers in the UAE including Sarwa, StashAway and Baraka.
Demand for trading and investment apps accelerated during the Covid-19 pandemic owing to monetary easing by the US Federal Reserve and other central banks around the world, giving novice day-traders more money to invest during pandemic lockdowns.
Although the US is the leading market for robo-advisers, they are growing in popularity in the UAE, with assets under management projected to rise 19.8 per cent to $3.28 billion in 2026, from $1.59bn this year, according to market and consumer data specialist Statista.
StashAway investors will be able to choose a range of exchange-traded funds that cover more than 35 asset classes under the Flexible Portfolio option, which will also be fee-free for the first year.
These include emerging markets, real estate investment trusts, gold, energy and government bonds, among others.
StashAway will also calculate the potential downside to ensure that investors know how much risk they are taking on as they create their portfolio and will alert investors when the risk level changes, it said.
“This new offering adds to StashAway’s drive for innovation in the industry to provide an intelligent, convenient and less expensive alternative to traditional wealth management providers,” it said in the statement.
Founded in 2016 in Singapore, StashAway expanded its operations to the UAE in November 2020 to tap into a growing segment of affluent investors looking for low-cost ways to build their wealth.