After not being completely convinced of Scalable Capital’s performance after a year, I took two steps:
- Created a second portfolio with Scalable Capital; for this purpose, money first had to be paid out to my reference account, which is then debited again for the second portfolio. Thanks to very friendly advice, I was also able to change my risk classification, so that more than 10% value at risk was possible. The second portfolio now operates at 20% VaR, currently 67% is invested in action.
- Deducted some money and invested in Quirion. Also a robo advisor, here from the Quirin Bank. Quirion’s risk assessment allowed me to choose the middle package, 50% bonds, 50% stocks.
After a little more than a month, it is of course completely unprofessional to compare the previous performance values. Quirion is currently at 1.76% (second-weighted), Scalable at 1.77% (also time-weighted; my 10% VaR portfolio, which is over a year old, is at 4.21%, so it has fallen a bit since
1 year of experience with Scalable Capital report). As I said, the time that has passed so far is far too short for a comparison. But I would like to mention a few points that caught my eye.
Quirion offers as part of a promotion that the first €10,000 will be managed without a fee. After that or beyond, the administration costs 0.48%. Of course, it’s a bit unfair to compare Quirion and Scalable Capital in terms of costs. However, I find Quirion to be less transparent compared to Scalable Capital. First of all, only 0.48% is mentioned, but if you take a closer look, you will also find the average 0.39% Total Expense Ratio (TER), which is already priced into the ETFs. At Scalable Capital, the management fee is 0.75%, plus an average of 0.25% ETF fees. Somewhat incomprehensible to me is why the fees are higher at Quirion. Update Thanks to a commenter: The fee is currently 0.74%.
Quirion was the test winner in the robo advisor category, including Ökotest… although I wonder why Ökotest is testing robo advisors in particular? Because fewer consultants are needed to exhale carbon dioxide? Both, Quirion and Scalable Capital, were test winners in Extra Magazine. And Scalable was now also the winner in Capital. Somehow it’s difficult to compare when everyone somewhere is a test winner…
Unlike Scalable Capital, Quirion doesn’t have an app. Personally, I don’t think that’s super bad, after all, I don’t have to look at my investments every second. Overall, the Scalable app looks a bit more “smooth” and well thought-out on the web as well as on the mobile phone.
Scalable Capital is more agile in the rebalancing of investments. Since the creation of the second portfolio, 6 positions have been bought and sold (not including the initial purchases as well as commissions and fee movements). Nothing has been changed at Quirion. The portfolio is the same as on the first day. That doesn’t have to be good or bad, because a change can also be a disadvantage.
NO ETF from one portfolio can be found in the portfolio of the other. The list of Quirion’s investments:
- iShares Euro Corporate Bond 1-5yr UCITS
- SPDR Barclays EUR Corp. 0-3
- iShares eb.rexx Government Germany 1.5-2.5yr UCITS
- iShares MSCI World EUR Hedged UCITS ETF
- Lyxor EuroMTS 1-3Y IG (DR) UCITS
- iShares Euro High Yield Corporate Bond UCITS ETF
- Lyxor UCITS ETF MSCI World
- db x-trackers II Global Sovereign Index ETF
- Robeco Conservative EM
- Robeco Conservative DM
- Global Short Fixed Income Fund EUR
- Emerging Markets Core Equity Fund EUR Inc
- Dimensional Global Target Value Fund
- Dimensional Global Core Equity Fund
- Dimensional EM Value Fund
The list for Scalable Capital:
- iShares $ Treasury Bond 7-10yr UCITS ETF
- iShares J.P. Morgan $ EM Bond UCITS ETF
- iShares Core € Govt Bond UCITS ETF
- iShares € Covered Bond UCITS ETF
- Lyxor Commodities CRB Thomson Reuters/CoreCommodity UCITS ETF
- iShares Developed Markets Property Yield UCITS ETF
- db x-trackers Nikkei 225 UCITS ETF (DR) 1D
- iShares Core DAX® UCITS ETF
- UBS ETF (LU) MSCI Pacific (ex Japan) UCITS ETF (USD) A-dis
- UBS ETF (LU) MSCI Emerging Markets UCITS ETF (USD) A-dis
- S&P 500 UCITS ETF (VUSA)
- iShares STOXX Europe 600 UCITS ETF
- iShares $ Corp Bond UCITS ETF
- iShares Core € Corp Bond UCITS ETF
While I’m at it: I’m not only comparing the performance between two machines, but also with a manual investment strategy of my financial advisor, who has agreed to compete against the robo advisors, man against machine, so to speak. Cost: 1% of the portfolio value and supposedly also full transparency. The portfolio here is 7.81% return after one year, so compared to Scalable Capital, the human has won here. I didn’t expect that. But good. A point for the financial advisor. And deducted a little more money from Scalable and gave it to him.
Comments (since February 2020 the comment function has been removed from my blog):
Deshero says
- December 2017 at 01:05 I don’t think you should see it that way, that your financial administrator was “better”. Simply because the robos try to keep the risk low. In 2017, the times were gold for stocks and if you take risks, you can get a lot out of it. I will now also invest in Scalable, because I think that you will do best in the long term. In my case, of course, only with maximum risk, because I think those who shy away from the risk do not need to hope for the profit. ^^
Tom Alby says
- December 2017 at 01:29 In another article about Scalable, I point out that the risk should be reduced by Scalable, at least theoretically. So far, they have not had to prove it. Now, my investment advisor didn’t exactly choose the most risk-averse stocks, more like Quirion. And at the end of the day, it’s the result that counts.
Urs says
- December 2017 at 17:04 It depends on the different approaches. Keeping risk low only makes sense if you really need it Keeping risk low (e.g. because I need the money in 3 months), but it costs a lot of return. That’s exactly what you can see with Scalable. Unfortunately, there is relatively little information in the Quirion “whitepaper” about the approach chosen by Quirion. The old saying “A lot of back and forth empties the pockets” still applies. A good approach should be able to generate a good return for people who want to invest for the long term.
Emmert Ralf says
- January 2018 at 10:20 I also looked at a wide variety of robo advisors and ended up at Quirion. Your statement about the costs has become obsolete here, because Quirion partially dispenses with iShares products and uses the leading ETF provider Vanguard. As a result, Quirion’s fees have been significantly reduced.
https://www.quirion.de/news/kosten-fuer-quirion-portfolios-sinken-deutlich/
I find such comparisons as you make very informative for the private customer and would like to thank you for the information.
Tom Alby says
- January 2018 at 00:00 Thanks for the hint!