Would you mind posting the chart for the 36% portfolio? Also, did you change your portfolio risk level within this time period?

Well, you could obtain the expected returns from the code that generates those projection graphs.

Notes for readers

• These are expected returns based on historical statistics, they're not guaranteed returns.
• They will change if StashAway changes the portfolio holdings in each of the Risk Indexes.
• It is assumed that the expected returns used to generate the projection graphs mirror their respective portfolio's expected returns.
• These values are as of 17 Dec 2020.

Expected Returns for each Risk Index

• 36 RI - 12.8%
• 30 RI - 11.3%
• 26 RI - 10.4%
• 22 RI - 9.6%
• 20 RI - 8.8%
• 18 RI - 8.3%
• 16 RI - 7.8%
• 14 RI - 7.1%
• 12 RI - 6.4%
• 10 RI - 5.5%
• 8 RI - 3.9%
• 6.5 RI - 2.9%

Assuming the VaR measurement uses a normal distribution, then we can use the Z-score formula to work out the standard deviation of the portfolio. E.g. for the 36 RI: (-36-12.8)/(-2.33)= 20.9

Watched the video and it was disappointing. For someone who is a certified financial advisor, I'd expect a more considered view of investment products. Multiple forumers have mentioned the self-interest factor (udang disebalik batu?) so I'll just note other thoughts.

• Platforms:
  • The platform he showed in his video is iFAST's advisor platform to offer products to paying clients
  • StashAway uses a few platforms to build a portfolio for paying clients.
  • Advisors like him and StashAway are obliged to select the most suitable products for their clients, there's nothing wrong there
• Cost:
  • I don't know what kind of fees he charges for his service, but typically personalized investment solutions are more expensive.
  • The mutual funds available through iFast's platform also tend to charge much higher management fees than ETFs
  • Sales charges on the mutual funds also may be a significant factor.
• Performance:
  • Since he does not publish performance metrics (which is not very feasible as well since he probably customizes different portfolios for different clients), we don't know if his fees are worthwhile.
  • He does have more flexibility to switch the mutual funds in a client's portfolio easily and at zero cost if he's using iFAST's wrap account. That said, I am unconvinced that active management of a portfolio of actively managed mutual funds can generate improved alphas and lower betas.
  • In his latest video, when comparing the annualized 10y performance of Franklin Technology Fund versus SLK's 10y annualized performance, he compared SLK's return after taxes on dividends and sales. This number will always be much lower since it accounts for capital gain taxes upon disposal of shares for US residents. It is not applicable for non-US residents. Hence this comparison is misleading.
  • Obligatory mention here that past performance is no guarantee of future results... so the fixation on historical/10y annualized returns isn't constructive.
• Marketing:
  • I don't see any problem with StashAway using influencer marketing strategies to promote their product as long as the marketing claims are true. Since StashAway is targeted at lay investors, the content of those videos are going to gloss over many details.
  • I see the same omission of nuance from his videos when he talks about currency hedging, withholding taxes, investment vehicles, fees, premiums/discounts/tracking errors on Malaysian-domiciled ETFs, etc.
  • Suggesting that StashAway referrals are akin to MLM/Pyramid schemes reflects poorly on his knowledge about what constitutes such schemes.

Anyway... One issue I'd like to highlight from the snippets of StashAway reviews that appeared in the video, and that have also been raised in this thread in the past is the discrepancy between the amount that was withdrew and the final amount that arrived in the bank account. This is a user experience/design problem that StashAway could solve by educating the customer better in their app/website interface. I can think of multiple tradeoffs with each design decision, but I think at the very least the transaction history amounts should tally up and provide more details how each calculation is generated (in other words, by being even more transparent).

For those who subscribe to the profit-taking ideology when investing in broad market investments, ask yourself this question: what would you do with the cash you have on hand?

If you think you can predict the market better than pure luck consistently, I invite you to test your skills here: https://engaging-data.com/market-timing-game/

This is incorrect. The Time Weighted Return is the compounded ROI of each subperiod after accounting for deposits and withdrawals within that subperiod. Money Weighted Return calculation does not take into account the month-to-month performance and focuses entirely on deposits, dates, and final values. MWR returns large numbers when the period is short. Here's a comparison of ROI, TWR, MWR:





No. You cannot compare these two numbers against each other for the same portfolio and come to a conclusion. They are different ways of looking at a portfolio, as are other return measures like CAGR, etc. If you want to compare these numbers, you have to compare against the same numbers from other portfolios.

This post has been edited by idyllrain: Apr 29 2023, 10:31 AM

The link you showed explains it that way because it is attempting to calculate a TWR for a fund.

If you look at the mathematical formula shown on the page for the calculation, you can see that it is a compounded ROI of subperiods: R = [(1+r1)(1+r2)...(1+rn)]-1. You can also see that the definition for r1...rn is the ROI for a single subperiod: (value_curr + income - input + output)/value_prev. In their formula they’re using unit price (or NAV) for value_curr and value_prev.

Yes to calculate the TWR that is what we must do. There are 6 subperiods in that table. We need to get the ROI for each subperiods minus the net deposit and compound those. The Feb-May subperiod ROI = ((3134.15 - 2000)/1023)-1 = 0.1086 = 10.86%. The granularity of the subperiods is entirely up to us.

If we want the performance of RM 1 from the beginning until the end, we can just multiply each month’s return to get the final 17.06%. Alternatively if we have no deposits past the first month, calculating the TWR on a monthly subperiod will just give you the same 17.06%.

This isn’t correct. MWR being higher or lower than TWR has nothing to do with rebalancing nor timing the market. The calculation for MWR seeks to find a rate of return (called the discount rate) so that the total cash inflow equals total cash outflow; in other words the net present value of all inflows and outflows equal 0. I have an old post that shows how this is computed manually. If you have Excel or GSheets, you can just use the function XIRR to compute this easily.

Whether DCA’ing is better versus Lump Sum, or whether a higher DCA frequency is better depends entirely on opportunity costs and the increase/decrease of the average price you’re buying at. As such, DCA’ing into a market that is progressively more expensive will increase your average price; increased cost means your returns would be less. On the other hand, a market that is trending down will result in lower average prices. It should be obvious that if the market is going to be much more expensive 5 months later, a Lump Sum right now would result in lower prices.

This post has been edited by idyllrain: Jan 11 2021, 02:16 AM

No one can answer this for you; you just have to decide what you believe the trend will be in the coming days. If USD weakens 5% relative to MYR and the ETFs increases 5% due to positive investor sentiment, the effects cancel out. If you are not comfortable committing a large sum of money in one transaction, you can always DCA first until you make a decision.

Here's a comparison of the different rate of return formulas for various DCA strategies in 6 portfolios in different market patterns over 13 months where the underlying market grew 5.77%.





Try comparing the MWR against the TWR of Portfolio C, then do the same for Portfolio E; it doesn't tell you anything useful. However you can compare the MWR of Portfolio C vs the MWR of Portfolio E; it'll tell you that the money was used more efficiently in Portfolio C (ending ROI in C is higher).

Edit: Updated table to fix MWR calculation mistakes as highlighted by WhitE LighteR.

This post has been edited by idyllrain: Apr 29 2023, 10:31 AM

Even if you take the point where USD was the strongest vs MYR at 4.44292 on 24-Mar-2020 and the lowest point of 4.29552 on 3-May-2020, that drop is a mere 3.3% (4.29552-4.44292)/4.44292. If you're on the 36% portfolio, between those two dates, the portfolio has returned close to 10%. That is a net gain in MYR of 6.7% in the month of April alone.

This post has been edited by idyllrain: Jan 11 2021, 08:46 PM

You are right, I made a mistake in the calculation. Here's the fixed comparison @ 13k at 31st Jan:



This post has been edited by idyllrain: Apr 29 2023, 10:28 AM

Probably changed to 22% risk between Dec 27 till now, and changed to 36% between between Dec 11 to 27.

10% risk index only has 20% of the portfolio in equities (remaining 60% in bonds, 19% in gold, and 1% in cash). Bonds underperform equities in rising/recovering markets. Essentially what you did by taking the 10% risk index is declaring that you are worried about the volatility in the rising market, and wish to be more conservative.

What you should do about it depends on your personal tolerance towards risk, and your investment time horizon. Do you think that the equities markets in US/China/Europe would continue to do well in the years ahead? If yes, then increasing your allocation to equities is something that you can do by changing your portfolio risk index higher. How much should you be in equities? Generally the younger you are, the longer your investment horizon can be (this depends on what you are investing for). The longer your investment horizon, you have more time to let your investment grow and recover from corrections and crashes, hence the higher the allocation to equities can be.