Top 4 Robo Advisors in Malaysia

Are people always telling you that you should start investing, but you don’t know how to start or what investments to make? 

If you believe you don’t have the knowledge or acumen to make important investment decisions yet? You can always seek the services of a robo advisor.

What is a Robo Advisor? 

A robo advisor, in essence, is a robot that automates your investment portfolio via algorithms. What you need to do is let it know your investing goals and risk tolerance, which you can always rebalance after depositing your funds. 

Usually a robo advisor would redirect your funds into exchange-traded funds (ETFs), which are groups of stocks, bonds and other investments. Read all about ETFs here in our previous article. 

However, there are many choices of robo advisors out there, and like people, they might have very different investment behaviours. It’s always a good idea to go through the pros and cons of each different advisor. 

Why Robo Advisor?

Passive Investing

Are you new to investing? Do you not feel too confident about your own choices at the moment? Perhaps you don’t have the time to do the needed research for your portfolio? Robo advisors are a good choice to help do this for you. 

A Diversified Portfolio

As robo advisors usually put your funds in ETFs among other things, you get a diversified portfolio. This is a good way to alleviate risk as one bad-performing investment will not affect you as much if the other investments back you up. 

Lower Fees

The management fees for robo advisors are typically below 1% per year. Compare that to fees involved in unit trust funds investment, which range from 0.5% to 2.5%, you get to save a bunch of money. In fact, some unit trust funds even charge up to 5% in sales charge and then another 5% when you redeem your investment value.

What Robo Advisors Can I Choose From in Malaysia? 

StashAway

Arguably the most popular name on the list, StashAway was the first robo advisor to enter the Malaysian market back in 2018. 

Strategy: StashAway utilises data-driven investment decision-making. Decisions on investments and asset allocations are made through algorithms derived from Artificial Intelligence (AI). Your portfolio is also monitored daily for any needs to be rebalanced. 

Minimum initial investment: RM0

Annual Fees: 0.2% to 0.8%

MyTheo

THEO is a Japanese robo advisor. They entered Malaysia in 2019 as MyTHEO which is partnered with Silverlake Group, who has over 30 years of experience in Asian and Malaysian financial markets. 

Strategy: MyTHEO incorporates their award-winning AI in their investment processes. They use proprietary algorithms to create portfolios incorporating risk-based investing and “smart beta”. Rebalancing is performed every time you change your target allocation. 

Minimum initial investment: RM100 

Annual Fees: 0.5% to 1%

Wahed Invest

Wahed was launched in 2017 in the U.S. as the world’s first Islamic robo advisor, before expanding to the U.K. In 2019, they entered the Malaysian market and is currently setting up their South East Asia regional base here. 

Strategy: They invest in Islamic assets all around the world, with their main focus being providing halal investments for clients. Wahed engages in Malaysian and U.S. stocks, sukuk, as well as gold. It optimises portfolios with Shariah-compliant investments through modern portfolio theory.

Minimum initial investment: RM100

Annual Fees: 0.39% to 0.79%

Akru

Now, a homegrown option; Akru was founded in 2020 in Malaysia. As of now, they only operate locally, being a low-cost alternative to some of the other more popular robo advisors out there. 

Strategy: Similar to StashAway, Akru invests in an intelligent portfolio featuring diversified global low-cost ETFs. The focus is on longer term investments, especially on equities and bonds. 

Minimum initial investment: RM0

Annual Fees: 0.2% to 0.7%

Final Verdict

If you want a simple-to-use and established robo advisor, StashAway will be the number one choice, with the RM0 initial investment as an added bonus.

MyTheo on the other hand, features more freedom and control for you to make customisations.

For investors looking for ethical and halal investing, Wahed is a no brainer.

Last but not least, Akru offers the most economically sound choice featuring the lowest annual fees. 

It all depends on what your priorities are.