24 Sep - 3 min read
StashAway has introduced a new investment offering by the name of Thematic Portfolios, which allows investors to “invest in trends you think will change the world without exposing your money to unnecessary risk.”
Essentially, StashAway’s new Thematic Portfolio is based upon the concept of thematic investing, where you create a portfolio consisting of companies that are relevant to an area or theme because you believe they will generate above-market returns in the long term. The companies could come from varying sectors or industries, as long as they remain pertinent to the theme – which differs from conventional investment, which is more sector or industry-focused. So for instance, if you were to invest in a thematic portfolio that is related to consumer technology, you may see companies from the e-commerce, fintech, social media, and even gaming sector in your portfolio.
Under StashAway’s Thematic Portfolio offering, there are three themes that you can choose from, namely:
The portfolios will primarily feature exchange traded funds (ETF) that are managed by notable fund managers – such as ARK Invest, iShares, Global X, and VanEck – although they will also be complemented by some balancing assets (non-thematic instruments) as a form of risk management strategy. This is because thematic investing tends to carry more risk than balanced portfolios; StashAway’s Thematic Portfolios have a risk index of 20% to 45%, which is much higher compared to its general investing portfolios that ranges between 6.5% to 36%. As such, balancing assets are introduced to help make risk more manageable.
With regard to fees, StashAway continues to charge its usual annual management fee of 0.2% to 0.8% for these new portfolios, depending on the investment amount. The average expense ratio charged by ETF fund managers, meanwhile, is 0.52%. There are no subscription, switching, and rebalancing fees, as well as minimum deposit requirements.
The robo advisor also clarified in its FAQ that it is not able to set or share expected returns on Thematic Portfolios as these products are inherently very volatile. Instead, it advised customers to invest based on their risk appetite, and to stay on for the long term to capture the maximum potential returns offered by each portfolio.
Additionally, there is no limit to the number of themes that you can invest in. You can also have two different portfolios of the same theme (with different risk indexes). Note, though, that these Thematic Portfolios are not shariah-compliant as they are composed of conventional ETFs.
To celebrate the launch of these Thematic Portfolios, StashAway is currently running a promo that lets you get free investing on these new offerings for up to 12 months. The deal will require you to enter a promo code when depositing your money, and is valid until 25 October 2021.
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