10 Best Performing Robos in a Rocky Year
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While top-performing robo-advisors often share similar qualities, those that did particularly well for the year ended March 31 benefited from different drivers, according to the 27th Robo Report, which Condor Capital Wealth Management published this week.
The report, which covers 42 accounts at 27 robo-advisors and provides results through this year’s first quarter, noted that the one-year period “includes the pain of 2022 and the mixed recovery in the first quarter of 2023.”
The team behind the Robo Report started opening accounts at robo-advisors in 2015 to enhance industry transparency.
The report provides data on total portfolio returns and on total returns against normalized benchmarks, which evaluate each robo portfolio’s performance against a comparable stock and bond allocation. Top performers in total returns don’t necessarily align precisely with top performance versus benchmarks.
Robo advisor portfolios at Fidelity Go, Wealthfront (a vintage 2016 account) and Ellevest, in that order, led in outperforming their normalized benchmarks for the year, according to the Robo Report.
“When looking at the equity portfolios in the one year numbers, Fidelity Go took the top spot thanks to, in part, a notable mega-cap and large-cap bias,” David Goldstone, Condor’s investment research manager, said.
“For the one year fixed income numbers, Zacks is one of the most active robo advisors we track and was impressive in this regard, as it held a duration of just 4.0,” Goldstone said. “We commend the low-duration profiles of Ellevest and Zacks at a time when investors needed protection the most.”
With the Federal Reserve raising interest rates aggressively last in 2022, the market punished long-duration bonds, the report noted.
Three-year trailing top performers versus their normalized benchmarks were, in order, Wealthfront (2016 vintage), Schwab Domestic Focus and Zacks Advantage.
“For three-year trailing numbers, Schwab portfolios held modest exposures to TIPS (Treasury Inflation-Protected Securities) and high-yield corporates, which significantly outperformed their traditional investment-grade counterparts,” Thomas Leahy, Condor financial advisor, said.
Leahy credited Wealthfront’s “bold allocation to energy stocks” and Schwab’s use of fundamental-weighted ETFs in its Domestic Focus portfolio for their performance.
Wealthfront (2016 vintage), Zacks Advantage and Fidelity Go, in that order, did the best against their normalized benchmarks over the five years ended March 31.
In the gallery are the top 10 robo-advisor 60/40 portfolios by trailing one-year total returns as of March 31, fees included, according to the Robo Report.
(Image: Adobe Stock)
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