ETFmatic

The first robo advisor ETF platform that i explored in 2018 was ETFmatic. The reasons to choose ETFmatic were (i) website and customer support in English & (ii) No need for postident process (big plus at that time!!!). The issues with postident and how to overcome it will be discussed in a separate post.

Account opening: The account opening process is quite straightforward, you need to enter your personal information and upload identity documents i.e. copy of passport. You also need to answer series of questions to create your risk profile. Once your risk profile is created the system will suggest combination of equity and bonds ETF for your portfolio. for example 70% equity and 30% bonds. Don’t worry you can change the percentage if you wish but you can’t pick ETFs.

ETFs available: Below is an example of equity and bonds ETFs assigned to my portfolio. I don’t think these will change from one person to another but as you can see it covers ETFs world wide and are quite decent.

• Equity ETFs: Asia ex-Japan (VAPX), Japan (MJP), US (VUSA), UK(ISFA), Europe ex-UK(VERX) & Emerging markets (VFEM)

• Bonds ETFs: Euro government (VETY), & Euro government inflation linked (IBCI)

If you notice most of the above ETFs are distributing . This means you will get dividends in your account which will be automatically invested by the system so you are basically on an auto pilot and watch your money grow (hopefully) without any intervention.

Fees: There are no account opening, deposit, withdrawal, trading or exit fees. However, they charge 0.48% Assets under Management fees plus the ETF issuer costs also known as Total Expense Ratio (TER). The average TER of ETFs in ETFmatic Portfolios is 0.12%.

The asset under management fees is waived for minors account. So if you don’t want to pay 0.48% fees just open your kids account and you only have to pay TER which must be paid no matter where you open your account.

Tax implications: ETFmatic don’t deduct taxes so must do self declaration in your own country. I see this as a big plus as it avoids all the unnecessary paper work of double taxation.

Advantages: Simple and easy to use

Disadvantages: The only disadvantage i see is you can’t choose which ETFs to invest as it is automatically done by the system. But given that it is a robo advisor one can’t really say that it’s a disadvantage !!! Last point to consider is that the company is based in the UK so one doesn’t know what happens after Brexit.

Recommendation: Definitely worth a shot if you are into passive investing!!

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