Skip to main content
Disciplines
Automotive Business IT + Informatics Construction + Real Estate Electrical Engineering + Electronics Energy + Sustainability Insurance + Risk Finance + Banking Management + Leadership Marketing + Sales Mechanical Engineering + Materials
Events
DE
EN
Books
Journals
Topic Page
Marketing
Start single access now
Access for companies
EXTENDED SEARCH
Log in
Top
Published in:
State-of-the-Art in Applying Machine Learning to Electronic Trading Read chapter Read first chapter

2020 | OriginalPaper | Chapter

What Do Robo-Advisors Recommend? - An Analysis of Portfolio Structure, Performance and Risk

Authors : Albert Torno, Sören Schildmann

Published in: Enterprise Applications, Markets and Services in the Finance Industry

Publisher: Springer International Publishing

Log in

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

Robo-Advisors guide investors through an automated investment advisory process, recommend personalized portfolio assignments based on their individual risk-affinity as well as investment goals and rebalance the portfolio automatically over time. Giving basic investment advice to customers, it can provide a useful way to reduce risk by diversifying and mitigating biases, while keeping a certain degree of performance at low costs. To verify these claims we conduct a sophisticated analysis of recommended portfolios of 36 Robo-Advisors, based on six distinct model customers with different risk-affinities and investment horizons, resulting in 216 recommended portfolios. We find that the analyzed Robo-Advisors provide distinct recommended portfolios for the different risk/investment horizon combinations, while sharing similarities in used products for portfolio allocation. We also find issues within the recommended portfolios, e.g. a low degree of distinctiveness between different investment horizons and a high amount of equities even in the short-term investment horizon.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

  • über 102.000 Bücher
  • über 537 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Maschinenbau + Werkstoffe
  • Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 390 Zeitschriften

aus folgenden Fachgebieten:

  • Automobil + Motoren
  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Elektrotechnik + Elektronik
  • Energie + Nachhaltigkeit
  • Maschinenbau + Werkstoffe




 

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

  • über 67.000 Bücher
  • über 340 Zeitschriften

aus folgenden Fachgebieten:

  • Bauwesen + Immobilien
  • Business IT + Informatik
  • Finance + Banking
  • Management + Führung
  • Marketing + Vertrieb
  • Versicherung + Risiko




Jetzt Wissensvorsprung sichern!

inform now
previous chapter Portfolio Rankings on Social Trading Platforms in Uncertain Times
next chapter The Financial Viability of eHealth and mHealth
Appendix
Available only for authorised users
Literature
1.
2.
Jung, D., Dorner, V., Glaser, F., Morana, S.: Robo-advisory - digitalization and automation of financial advisory. Bus. Inf. Syst. Eng. 60, 81–86 (2018)CrossRef
3.
Gomber, P., Kauffman, R.J., Parker, C., Weber, B.W.: On the fintech revolution: interpreting the forces of innovation, disruption, and transformation in financial services. J Manage. Inform. Syst. 35, 220–265 (2018)CrossRef
4.
Sironi, P.: FinTech innovation - from robo-advisory to goal based investing and gamification. Wiley, Chichester (2016)CrossRef
5.
D’Acunto, F., Prabhala, N., Rossi, A.G.: The promises and pitfalls of robo-advising. Rev. Financ. Stud. 32, 1983–2020 (2019)CrossRef
6.
Jung, D., Weinhardt, C.: Robo-advisors and financial decision inertia: how choice architecture helps to reduce inertia in financial planning tools. Presented at the Thirty Ninth International Conference on Information Systems (ICIS) (2018)
7.
8.
9.
10.
Beketov, M., Lehmann, K., Wittke, M.: Robo advisors: quantitative methods inside the robots. J. Asset Manage. 19, 363–370 (2018)CrossRef
11.
Faloon, M., Scherer, B.: Individualization of robo-advice. J. Wealth Manage. 20, 30–36 (2017)CrossRef
12.
Nussbaumer, P., Matter, I., Reto à Porta, G., Schwabe, G.: Design für Kostentransparenz in Anlageberatungsgesprächen. Wirtschaftsinformatik. 54, 335–350 (2012)
13.
Tertilt, M., Scholz, P.: To advise, or not to advise—how robo-advisors evaluate the risk preferences of private investors. J. Wealth Manage. 21, 80–84 (2018)CrossRef
14.
Jung, D., Glaser, F., Köpplin, W.: Robo-advisory: opportunities and risks for the future of financial advisory. In: Advances in Consulting Research, pp. 405–427 (2019)
15.
Reher, M., Sun, C.: Automated financial management: diversification and account size flexibility. J. Invest. Manage. 31(2), 1–13 (2019)
16.
17.
Huxley, S.J., Kim, J.Y.: The Short-Term Nature of Robo Portfolios. Advisor Perspectives (2016)
18.
Amadi, F.Y., Amadi, C.W.: Investment Horizon and the Choice of Mutual Fund. IJBM 14, 76 (2019)CrossRef
19.
Warren, G.: Long-term investing: what determines investment horizon? CIFR Paper No. 39, 1–39 (2014)
20.
Steiner, M., Bruns, C., Stöckl, S.: Wertpapiermanagement: Professionelle Wertpapieranalyse und Portfoliostrukturierung. Schäffer-Poeschel, Stuttgart (2017)CrossRef
21.
22.
Berk, J., Demarzo, P.: Corporate Finance. Global Edition, Pearson (2019)
23.
Markowitz, H.: Portfolio selection. J. Finan. 7, 77–91 (1952)
24.
25.
26.
Janssen, J., Laatz, W.: Statistische Datenanalyse mit SPSS: Eine anwendungsorientierte Einführung in das Basissystem und das Modul Exakte Tests. Gabler Verlag (2017)
27.
Field, A.: Discovering Statistics Using IBM SPSS Statistics. SAGE Publications Ltd., Thousand Oaks (2017)
28.
29.
30.
31.
Metadata
Title
What Do Robo-Advisors Recommend? - An Analysis of Portfolio Structure, Performance and Risk
Authors
Albert Torno
Sören Schildmann
Copyright Year
2020
Book
Enterprise Applications, Markets and Services in the Finance Industry

Print ISBN: 978-3-030-64465-9

Electronic ISBN: 978-3-030-64466-6

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-3-030-64466-6_6

Premium Partner

    Image Credits