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StashAway was the first robo advisor to obtain a full capital market services licence from the Monetary Authority of Singapore (MAS). This allows StashAway to provide investment advice to retail and accredited investors and to manage our investments.
Its assets under management (AUM), or how much investors like us have entrusted them to invest for us, has also crossed the US$1 billion mark in January 2021. StashAway currently operates in Singapore, Malaysia, UAE, Hong Kong and Thailand.
In April 2021, StashAway announced its Series D fundraising of US$25 million from Sequoia Capital India. This brings its total funds raised to US$61 million.
What Can You Invest In With StashAway?
In general, robo advisor platforms aim to leverage technology to reduce the need for human advisors and provide a convenient digital experience. This enables StashAway to provide more consistent investment advice and charge lower management fees. At the same time, robo advisors also assess our risk appetite to offer investors a personalised portfolio.
StashAway invests in Exchange Traded Funds (ETFs) with high trading volume, deep liquidity and very low expense fees. It does so to achieve broad-based diversification and enable us to invest passively – without the need to constantly monitor our portfolios.
There is no minimum deposit (in Singapore Dollar) or investment amount required. However, if we want to deposit U.S dollars, we need to deposit a minimum of US$10,000.
StashAway has three main portfolios that we can invest in:
1) General and Goal-based portfolios
2) Singapore-focused Income portfolio
3) Cash Management portfolio called StashAway Simple and StashAway Simple Plus.
When we invest in StashAway, we have to pay a fee based on the amount we invest with them. The more we invest, the lower the overall fee will be.
- First $25,000 – 0.8%
- Additional amount above $25,000 to $50,000 – 0.7%
- Additional amount above $50,000 to $100,000 – 0.6%
- Additional amount above $100,000 to $250,000 – 0.5%
- Additional amount above $250,000 to $500,000 – 0.4%
- Additional amount above $500,000 to $1,000,000 – 0.3%
- Additional amount above $1,000,000 – 0.2%
This means StashAway’s fees stack. For example, regardless of how much we are investing with StashAway, the management fee for the first $25,000 is always charged at 0.8%. If we have invested $100,000 with them, we would be paying an annual management fee of $675 ($25,000 x 0.8% + $25,000 x 0.7% + $50,000 x 0.6%).
Investing In Multiple Goals With StashAway’s Core and Higher Risk Portfolios
StashAway’s goal-based portfolios give us access to high-quality and globally diversified investment portfolios via U.S. Dollar-denominated ETFs.
StashAway uses its proprietary Economic Regime-based Asset Allocation (ERAA) framework to build its investment portfolios. According to the company website, this maximises net investment return at each risk level.
Under StashAway’s General and Goal-based investing, we can build multiple portfolios for different purposes. This allows us to work towards different goals and take on different risk levels for each type of goal. This makes sense as we may want to take a lower risk with near-term goals such as building our emergency fund, saving for our wedding or buying a home.
On the other hand, we may be able to take on more risks for goals that are decades away, such as retirement or our child’s education. We may also wish to take a much higher level of risk for certain goals such as buying a vehicle if it’s an expense we are able to cut back in case the investments do not perform as well as hoped.
Within each goal, we need to either decide whether:
1) we want StashAway to compute how much we need to achieve that goal (based on the number of years we have till we need to achieve the goal) or
2) we already know how much we need to set aside.
StashAway can help to estimate our goal if we are not sure where to start. For example, I wanted to estimate how much I would need to invest each month to send my child to university in about 19 years. StashAway estimates that I would need close to $117,000. To grow my portfolio into this figure in time, StashAway estimates that I would need to start investing about $200 to $250 a month today – which sounds rather doable.
We are able to set up a recurring investment amount and keep it on autopilot. We can also keep track of our progress whenever we want by logging into our StashAway account. Perhaps the best part about investing via robo advisor platform is that we can simply ramp up or stop our investments as and when we want, or even sell them, without being hit with any form of penalties.
Investing In StashAway Income Portfolio
As its name suggests, the StashAway Income Portfolio is invested in ETFs that are able to pay out an income (i.e. dividends, distributions, coupons, etc). The StashAway Income Portfolio comprises six SGX-listed ETFs that are exposed to a mix of:
- Government bonds (SG Government Bond)
- Agency bonds (Asia High Yield Corporate Bond)
- Investment-grade corporate bonds (SGD Investment Grade Corp Bond)
- Real Estate Investment Trusts (S-REIT and Asia ex-Japan REIT)
- Dividend-focused equities (Straits Times Index ETF)
Unlike investing in its core General and Goal-based portfolios, we have to invest a minimum of $10,000 in the StashAway Income Portfolio.
We can either opt to reinvest our dividend payouts or send them to our personal bank account. This can be useful as younger investors may prefer to reinvest their payouts to build a larger portfolio, while older investors may prefer to use the payouts to supplement their monthly expenses. StashAway does not aggregate the payouts from underlying investments, and simply payout distributions whenever they are made.
Growing Cash Savings With StashAway Simple & StashAway Simple Plus
Cash management accounts have become an increasingly popular investment tool as well, especially given the higher interest rate environment today. They allow us to maximise our cash savings, usually in investment accounts with brokerages or robo advisors, by ploughing them into money market funds. This way, our cash balances do not have to sit idle even when they are not invested or if we want to set them aside for emergencies. By putting these funds into a cash management account, we are able to earn a return while taking on relatively low risk.
StashAway does not charge any management fee for its cash management account – StashAway Simple and StashAway Simple Plus. On its website, the projected return rate of StashAway Simple is 2.8% per annum (p.a.). StashAway Simple Plus – which allows us to take a slightly riskier position – also pays us a higher projected return of 4.6% to 5% p.a.
The benefit of using a cash management account over fixed deposits is that we do not have to lock-in our funds just to earn a slightly higher return. There’s no penalty for wanting to withdraw our funds at any point. Even if we compare it to a high-interest savings account, StashAway Simple does not require us to jump through multiple hoops to earn a better return or provide interest returns based on tiered sums kept within the account. Of course, we need to remember that StashAway Simple and StashAway Simple Plus are ultimately an investment in money market funds and shorter duration bonds – and not a deposit account with a bank. Regardless of how low the risk is, we can lose money on investments.
Within our StashAway Simple portfolio, 30% of our funds will be invested in LionGlobal SGD Money Market Fund and the other 70% in LionGlobal SGD Enhanced Liquidity Fund. The StashAway Simple Plus portfolio is comprised of 20% in LionGlobal SGD Enhanced Liquidity Fund, 35% Nikko AM Shenton Short Term Bond Fund, and 45% LionGlobal Short Duration Bond Fund, without investing in its other investment portfolios.
Investing Your Supplementary Retirement Scheme (SRS) Funds With StashAway
The SRS scheme can be a powerful tool to aid us in accumulating a larger retirement nest egg. Similar to topping up our CPF Special Account (SA) or Retirement Account (RA) via the RSTU Scheme, we can benefit from dollar-for-dollar tax relief. However, unlike top-ups into our CPF accounts, any top-ups we make into our SRS account do not automatically earn us meaningful returns unless we invest them.
StashAway also gives us the option to put our SRS funds into all three of its investments – General and Goals-based portfolio, StashAway Income portfolio and even StashAway Simple and StashAway Simple Plus. By just putting our SRS funds into StashAway Simple, we can already be better off while taking a small amount of risk. Similarly, we can also take more risk (and earn a potentially higher return) by investing our SRS funds into the riskier portfolios.
Enjoy 50% Management Fees For 6 Months With StashAway
For those who are interested to try the StashAway platform for yourself, StashAway is giving 50% off in management fees for 6 months, for up to $50,000 in portfolio value.
That makes it perfect for giving StashAway a try and see if it is the robo-advisor for you. You can sign-up for free today to enjoy this exclusive promotion.
This article was first published on 10 May 2021 and updated with the latest information.
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