SigFig wins 2020 Q2 Robo Report ranking

[RetiredNewbie]

When I started lurking here I began digesting every Robo Report from Backend Benchmarking since 2016 Q1, and decided to go with Betterment. They did great in good times, but when it came to losing money Betterment was among the very worst in the Reports. I wrote to them and told them that making money was important, but not losing money was important too. They replied with a canned response, and I dumped them about a year later.

SigFig has been a strong performer throughout the past four years, so I decided to invest with them after the pandemic caused the market to nosedive in March 2020. I have been very happy with their app and website and fees and everything about them. I'm already retired on a defined benefit plan so I don't need a lot of financial advice, since I have learned a lot here in this forum.

If you're considering using a robo advisor, you will find the Robo Report very interesting.
https://www.backendbenchmarking.com/the-robo-report/

[beebee5004]

Someone on the boards here referred me to this report, so I subscribed recently. I received my first copy of the report today. The results for Schwab Intelligent Portfolios seem discouraging. Any convincing reason to stay with SIP?

[Nate79]

These reports are mostly worthless as the difference in performance is just whichever tilt is currently doing the best at the time. The purpose of a robo is not to get you performance or to increase your return but to provide a hands off approach and will give you the return of whatever strategy they are following.

There are so many things that can swing performance- international %, bond %, value tilt, bond yield, etc.

[RetiredNewbie]

These reports are mostly worthless as the difference in performance is just whichever tilt is currently doing the best at the time. The purpose of a robo is not to get you performance or to increase your return but to provide a hands off approach and will give you the return of whatever strategy they are following.

There are so many things that can swing performance- international %, bond %, value tilt, bond yield, etc.

What prevents them from ever modifying whatever strategy they are currently following?

[bzargarcia]

Comparing robo-advisors performance over the short-term is no different than saying the QQQ is better than VOO this year so QQQ is a better ETF.

[tman9999]

These reports are mostly worthless as the difference in performance is just whichever tilt is currently doing the best at the time. The purpose of a robo is not to get you performance or to increase your return but to provide a hands off approach and will give you the return of whatever strategy they are following.

There are so many things that can swing performance- international %, bond %, value tilt, bond yield, etc.

Actually, if you read their latest report (I just skimmed it - 68 pages!), they evaluate a number of variables with the goal being to only look at "objective" ones. Performance over the last 2.5 years is only one of the variables. And even with that, you can start to see via their normalized benchmarks that some robos are doing a better job of asset allocation than others. They also look at Sharpe ratio as a proxy for risk, which is also useful - how do I get max return with min risk?

After that, they take account of fees, expense ratios of chosen funds in their portfolios, and cost/availability of extra services. What is also helpful is they give you a full breakdown of how each robo scored against the criteria, so you can mix/match criteria and ignore ones that aren't important to you so you can come up with your own personalized ranking if you want.

In other words, it's a great trove of info for anyone considering getting into a robo.