If I hire a ‘robo advisor’, where am I investing?

Every time we hear more and more about invest with robo advisors, the automated investment managers that use technology as their best ally to control and rebalance the portfolios prepared by the experts of the investment committee of each entity. Although the different robo advisors present in Spain may seem very similar to each other, the truth is that, if we look at the information of each one, there are several aspects that differentiate them.

The portfolio composition, for example, as well as the geographical locations in which they invest are two of the main aspects that can help us choose one, taking better care of our personal preferences. We analyze where the riskiest and most conservative portfolios invest in the four of them robo advisors independent from Spain: Indexa Capital, Finizens, inbestMe and Finanbest.

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With a risky profile you will have more investment in the United States, Japan and the Pacific

The main difference between the portfolios for riskier profiles of robo advisors and those oriented to more conservative profiles is the percentage of investment in the United States, Europe, Japan and the Pacific they present, as well as in emerging economies.

If we analyze the investment portfolios of automated managers, We can see that they are made up of investment funds that are mostly indexed and that, in addition, many of them have a large percentage of the investment in the United States. The explanation for investing in North America is due to several reasons: the US market is one of the largest in the world and, currently, also a world power in industrial innovation, startups and companies that continue to grow in volume. The entity with the highest investment in its risky portfolio (more equities than fixed income) in the United States is Indexa Capital, with 35% of the portfolio invested in this territory. They are followed by Finizens, with 33%, Finanbest with 30% and inbestMe with 26%.

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Europe also has a very important presence in the choice of investment funds made by the financial advisers of these entities. Thus, the investment portfolios of the robo advisors also have numerous investment funds focused on Europe, whether fixed income or variable income. Some entities that attach importance to Europe in their risky portfolios are Indexa Capital, which has the highest percentage in its risky portfolio, with a 40% investment in Europe; Finizens, with 35%; inbestMe, with 27%, and, finally, Finanbest, with 26%.

And, in addition, they enter this list of territories Japan and the Pacific. Most of the countries that make up the investment funds in the Pacific economies are Asian, but due to their economic differences, Japan always appears differentiated, like its own market. When we name Pacific we mean China, Hong Kong and also Australia, among others. Asia is a great power, currently, with very prominent companies in online commerce and in the technology sector, which develop some of the most important innovations in today’s industry. For Japan, the percentages are as follows: Indexa Capital, with 8% of the risky portfolio; inbestMe, with 5%; Finanbest, with 5%; and finally Finizens, with 4%. There are some automated managers that do not include the Pacific in their portfolios. Those that include it are inbestMe, with 4% of its riskiest portfolio, and Indexa Capital, with 3% of its riskiest portfolio.

With a conservative profile you will have a higher percentage invested in Europe

The United States cedes positions to Europe if we talk about the most conservative portfolios(more fixed income than equities), although it continues to have an important presence. Thus, the percentage invested in the United States in the most conservative portfolios of each robo advises the following: 24% for Finizens; Indexa Capital is behind, with 11%; Finanbest, with 6%, and inbestMe with 5%.

On the other hand, if we analyze the weight of Europe, we see that, for the most conservative portfolios, it stands out Indexa Capital (89%), Finanbest (71%), then Finizens (49%) and inbestMe (43%). The percentages are considerably higher than for any other territory.

As to the areas of Japan or the Pacific, almost disappear in the most conservative portfolios and, in fact, the robo advisors that have a percentage of investment in these territories with their products do so with one of their balanced portfolios (50% fixed income and 50% variable income, approximately).Indexa Capital invests 4% in Japan with its portfolio number 5; inbestMe invests 4% in Japan with its portfolio number 6 and 3% in the Pacific, also with the same portfolio; Finizens, meanwhile, allocates 0.7% of its most conservative portfolio to investment in Japan.