My fourth article on the topic of Scalable Capital and my second on Quirion. Under my first article on Scalable Capital, there are a large number of comments, even from one of the Scalable Capital founders, and I am honestly always amazed at how some investors allow themselves to judge after only a few months of experience with Scalable Capital or other robo advisors. But that’s exactly what people are looking for: Experiences Scalable Capital is the most common search term that Google users use to get to this page. Time for an update.
The background
After I was not particularly satisfied with the performance of the 10% VaR custody account opened in May 2016 at Scalable Capital, I opened a second one with 20% VaR in August 2017 as well as a custody account with Quirion, the robo-advisor of Quirin Privatbank. Both providers require a minimum stake of €10,000, while Quirion still had an offer at the time that no or reduced fees would be charged up to €10,000.
The Quirion robot has now even become the winner of Stiftung Warentest, which tested RoboAdvisor in issue 8/18. Scalable Capital only received a “satisfactory”. Allegedly because the portfolio had shown an overweight in certain asset classes.
Now I myself have not had good experiences with Stiftung Warentest, be it that one of the products I had worked on myself was tested unfairly (and the testers were more incompetent than I would have thought possible), be it that I followed a test report and bought a product that was grotesquely bad. Since then, I have become very cautious about Stiftung Warentest.
Quirion depot dissolved
And here, too, my experiences did not coincide with those of Stiftung Warentest, even if this institution is the last word in wisdom for most Germans. Nevertheless, after a year, I closed the custody account at Quirion again, and I will keep my two Scalable Capital portfolios.
In my opinion, the Quirion portfolio had sufficient potential with a 50%/50% share of bonds to stocks, but only achieved a 1.95% time-weighted return in this one year. I have not been able to observe any transactions, the portfolio seemed static to me, but maybe I have overlooked something here. The FAQ states that the custody account is updated at least once a year. By the way, this statement in the FAQ is strange:
At quirion, you entrust the management of your invested money to the quirion asset managers so that you have time for other things and don’t have to deal with new market developments and investment decisions on a daily basis.
Not a word about a RoboAdvisor. I have not found more details about how the robo advisor works here. More on that below.
Scalable Capital is completely different, here you can see a few transactions per month, in both portfolios. And the results? My 2nd portfolio at Scalable Capital with 20% VaR, which was launched at the same time, achieved a time-weighted return of 3.70% after one year, the development can be seen in the chart. The equity component here is 67%.
My 1st portfolio at Scalable Capital with 10% VaR, which is over 2 years old, has not necessarily performed better in the more than 2 years, but two different investment approaches are also implemented here. The equity component here is 34%. The time-weighted return is 3.92%, but I was never in the red here as with the more risk-averse portfolio; of course, this may also have been due to the timing.
Overall, a manageable performance from my point of view, after all, we were already around 4% with my older portfolio last year, but still better than Quirion’s. Of course, a year is not a lot of time. But I’m not done with my comparison yet.
Surprise: Humans are (still?)
As with the previous comparisons, my financial advisor is still in the running, who received the same amount as each of my portfolios at Scalable Capital. And for the second year in a row, it wins the comparison with a time-weighted return of 10.36%. The tool also gives a time-weighted return p.a., which I think is extremely valuable and actually necessary. This is 5.30%. According to his information, the money is also invested with a risk of loss of -10%, so I can compare it to Scalable Capital’s 10% VaR portfolio. However, his fee of 1% also goes down here. So that I don’t get any more questions about whether I can’t give investment tips myself (I can’t!), here is the link to my advisor’s XING profile; he has earned the publicity
It should also be mentioned here that, as far as I know, no reallocations have been made. In other words, as with quirion, the steady hand rules, but unlike quirion, the results are better.
Result
Either my investment advisor is a particularly good one or the robo advisors are not yet where they should be, or maybe even both. I don’t know. The robo advisor approaches of quirion and Scalable Capital also seem to differ fundamentally: While quirion offers more of a kind of assistant that selects an investment strategy based on rules that seems to have been configured by humans in advance, Scalable Capital uses the more innovative concept in my opinion and recommends portfolio rebalancing to the investment team; here, too, the algorithm does not trade itself, because it is apparently not allowed to do so yet. In my opinion, this is still the better approach, and he has also prevailed against Quirion in this one year, which is admittedly short. The difference between the RoboAdvorsor approaches is explained very well in SC’s FAQ.
But even with Scalable Capital, not all that glitters is gold. What annoys me about Scalable Capital: Just like Quirion, no time-weighted return p.a. is given. Why not? And why are you not allowed to take screenshots in the Android app? Absolute nonsense! And as written above, just under 4% in more than two years in the older portfolio is not an outstanding performance in my opinion, especially when you look at the results of my financial advisor.
2 years is still not a long time in finance. 1 year certainly not. Man still wins in my comparison.
By the way, if you sign up for Scalable Capital via this link, you and I will get a small bonus
Comments (since February 2020 the comment function has been removed from my blog):
Berner says
- September 2018 at 21:10 Since April_2017 invested. Risk class 15%. Result after 1 1/2 years in my eyes BAD! approx. -1.5% time-weighted return. I imagined it differently! For investments mainly or exclusively in ETFs, the result is miserable in my opinion. If you had invested the money yourself in reasonable ETFs or stocks, the return would probably be different. I am not at all satisfied with the result after about 1.5 years (even though 2018 was and is a very volatile year). An event hosted by SC in 2017 prompted me to invest, which I now regret in retrospect.
Marc says
- September 2018 at 08:16 Hello, I’ve also been with scalable capital since January 2017. Unfortunately, my portfolio has only increased by 1%. First with risk class 20 and for 8 months with the highest risk class. My conclusion after almost 21 months now – poor performance and I will leave Scalable Capital.
Mark Alexander says
- December 2019 at 20:34 For me, between August 2018 and September 2019, Quirion turned a €20,000 stake after termination into €20101.71 – less than half the interest I received on the fixed deposit invested at the same time with Crédit Agricole! Actually, at the time of termination, my “total assets” were stated at approx. €20,570, which then mysteriously melted down by approx. €470 after the closure of the custody account. A rogue who wonders…….