Wednesday, May 18, 2016

Quantitative robo advisor: Wixifi

Robo advisors are in their infancy in India but a few trends have emerged. I broadly classify robo advisors in the following categories:
  1. Bionics - Robo advisors that have a human component to them. I have been told that some large banks have robo advisory services with a human element. A few startups are present in this space as well.
  2. Self selected basket - Several websites provide this service the most famous of which is Scripbox. 
  3. ETF recommenders - There are few in the works in the ETF space - but the lack of depth in the ETF markets makes it difficult for the advisor as yet. I am fairly sure this space will do extremely well in the future.
  4. Quantitative - Wixifi is the only advisor I am aware of in this category. I believe there are others developing this technology. Unfortunately Quantitative algorithms are still mostly available to only to large investors like FIIs, HNI, family offices and DIIs. Wixifi is my attempt in trying to democratize the technology and bring it to anyone who wants to use it.
So why would you pick quantitative advisors:

  • Simulated Back-tested performance: You can see the results of the various risk levels against other asset classes (FDs, Gold, Real Estate and NIFTY) before you invest. You can even see the simulated portfolios at any time slice in history. In addition the impact of capital gains, entry loads and exit loads has been taken into account on the simulated portfolio but not the other asset classes. The results are fairly interesting and I would love to hear your feedback on them. 
  • Single click to invest across several funds: You can check the trades before clicking buy. In India, by law discretionary management requires a special license and a minimum investment so you have click each time you buy. This is a very good thing because I have found that several people find the thought of discretionary management very discomforting.
  • Automated Rebalancing: This feature lets Rebalance you entire portfolio in 3 clicks. Now several people ask me why wouldn't someone just go to Wixifi and buy the funds we are recommending today. The biggest reason is that Rebalancing without the Wixifi system is a pain - which is all automated by the platform. It figures out the target portfolio, capital gains tax, exit loads and then makes it super simple for you to just execute in 3 clicks.
  • Safe and Secure: The investment is done through MF Utilities India Private Limited which is a joint venture of 25 of the most respected AMCs in India. Moreover your money is directly transferred to the Mutual funds by their payment gateway (BillDesk).
So I urge you to find some quantitative investing avenues and test out the Simulation and investment platform at Wixifi.