In a year that saw historic interest rates hikes and one of the worst performances ever for traditional portfolios, three robo-advisors shined.
Out of 42 accounts tracked from 27 different robo-advisors, Fidelity Go, Wealthfront and Ellevest performed the best, relative to a benchmark, over the one-year trailing period that ended March 31, according to the latest “Robo Report” from Condor Capital Wealth Management.
Fidelity Go delivered the best equity portfolio thanks to a notable mega-cap and large-cap bias, the researchers found. The robo had an average equity market cap of $84 billion compared to an average of $64 billion at the other robos studied, David Goldstone, manager of investment research at Condor, said in a statement.
“This was important as the Russell 2000 Index, a U.S. small-cap index, returned −11.63% for the 1-year trailing period, whereas the S&P 500 returned −7.75% for the period,” Goldstone reported.
Meanwhile, Wealthfront’s equity allocation was boosted by a dedicated exposure to energy stocks (VDE) and the Schwab Dividend ETF, which both outperformed the S&P 500 index.
Ellevest, the women-targeted robo-advisor launched by Sallie Krawcheck that raised $53 million of new funding in 2022, also performed well because of a modest allocation to domestic stocks, Condor reported. A larger allocation to non-U.S. equities compared to other robos studied helped Ellevest outperform.
When it came to fixed income, Zacks Advantage performed the best by holding bonds for a shorter duration than other robos studied, Goldstone said.
“For the one-year fixed-income numbers, Zacks is one of the most active robo advisors we track and was impressive in this regard, as it held a duration of just four [years],” Goldstone said.
Over a three-year period, Wealthfront’s portfolio performed the best, followed by Charles Schwab’s “Domestic Focus” portfolio and Zacks Advantage.
Wealthfront was also the top performer across a five-year period.
“The story for our Wealthfront portfolio is quite clear: The robo advisor’s bold allocation to energy stocks was a boon to investors,” Thomas Leahy, a financial advisor at Condor, said in a statement.
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