Hedgeable Review
Summary
Hedgeable is unique in the world of robo advisors because they are an active asset management firm, which means they believe they can produce returns that beat the market, instead of a passive asset management firm which prefer to just track the market with minimal fees like most other robo advisor services.Quick Facts
Minimum Deposit
$0Assets Under Management
$44.7 MillionYear Founded
2009Number of Users
UnknownFee Structure
| Account Value | Annual Fee |
|---|---|
| $0 - $49,999 | 0.75% |
| $50,000 - $99,999 | 0.7% |
| $100,000 - $149,999 | 0.65% |
| $150,000 - $199,999 | 0.6% |
| $200,000 - $249,999 | 0.55% |
| $250,000 - $499,999 | 0.5% |
| $500,000 - $749,999 | 0.45% |
| $750,000 - $999,999 | 0.4% |
| $1,000,000+ | 0.3% |
Features
| Single Stock Diversification | |
| Direct Indexing | |
| Tax Loss Harvesting | |
| Fractional Shares | |
| Human Advisors |
Supported Account Types
| Taxable Accounts | |
| 401k Plans | |
| IRA Accounts | |
| Roth IRA Accounts | |
| SEP IRA Accounts | |
| Trust Accounts | |
| 529 Plan Accounts |
Expert Walkthrough
The vast majority of robo advisors are built on the concepts of Modern Portfolio Theory. In a Modern Portfolio Theory approach, large losses are accepted, because the belief is that markets will eventually rebound, so through dollar cost averaging you’ll still do well since you buy more stock when it’s cheap and less when it’s expensive.
Unique among robo advisors, Hedgeable's investment philosophy is instead based on risk management and protecting your downside, which you can read more about in their white paper about downside risk management. Hedgeable has proprietary investing technology called the Dynamic Advisor that manages this downside protection by moving client portfolios to cash during high risk market periods to protect capital.
They manage their own proprietary investing strategies, which leverage over 100 proprietary investing systems on a daily basis. Clients have over 200 different ways to get a custom strategy built for them on signup. These strategies include access to Diversified Asset Allocation, U.S. Equity, International Equity, High Income, Commodity, Alternative, and now Impact Investing asset classes. All of Hedgeable's strategies are passively managed with a risk management overlay, as explained above. Hedgeable believes this is a more prudent way to manage money versus accepting large portfolio losses.
Hedgeable claims it was the highest performing robo-advisor in 2014, with an average return for clients net of fees of 7.4%. Hedgeable is the only robo-advisor to publish returns of clients on its site and has a performance track record going back to 2010.
Their fee structure favors wealthier clients, since the fees get progressively lower as the account balance increases and many of their unique features are only available or useful to accredited investors, although there is no account minimum.
They have a particular strength in Bitcoin, allowing clients to pay via Bitcoin and also allowing clients to invest in Bitcoin as a hedge against dollar based holdings in their portfolio.
In addition, they offer private equity investments in startups for accredited investors on their platform via a partnership with CircleUp, apparently at no extra cost.
Hedgeable Reviews
Hedgeable’s best feature is that it charges one wrap fee which includes everything: management fee, the custodial fee, product fees, trading costs, analytics, administration, and support. Depending on your account size, the wrap fee can range from 0.3% to 0.75%. Bonus: no minimum account size.
Hedgeable is definitely bringing the options found at the most exclusive investment advisors to everyday investors online. We gave Hedgeable a rating of 3.5 out of 5 stars since the concept is exciting but has yet to experience a real-world test of its primary investment strategy, having only come into existence at the very end of the last bear market. Time will tell.