The Korea Exchange (KRX) will have ETF (exchange traded funds) and ETN (exchange traded notes) introduced via a Robo Advisory System in cooperation with securities firms, the KRX said on April 1.
The KRX got an additional boost in earnings for 2015 by getting 17.7 billion won in dividends from its stake in Korea Securities Depository (KSD), one of its affiliates. KSD said its earnings in 2015 amounted to 62.8 billion won, and the dividend paid to the KRX for its 70.4 percent stake amounted to 17.7 billion won, taking up 23 percent of the total net profit by KRX in 2015, amounting to 78.4 billion won.
Intelligent Portfolios, a robo-advisor offered by U.S. investment firm Charles Schwab, is a good example. Investors can get advice from the service on how to allocate assets in 10 minutes.
Vice President Kim Won-dae of the Korea Exchange Securities Market Headquarters, said he hosted a meeting of officials in charge of ETFs (exchange trade funds) and ETNs (exchange traded notes) at the securities firms the stock market providing information on commodities to the newly introduced a Robo Advisory System in real time. He told the participants to gather information within the securities industry.
Both ETF and ETN products can best benefit from a Robo Advisory System as they pursue diverse sectors and themed indices. For Individual investors, it is less risky to invest in ETF and ETN commodities, and for this reason, the KRX believes that Robo Advisory service can be a great help in boosting the growth of individual assets. Other officials of KRX said most of the securities markets in the world have already introduced the Robo Advisory
At the present time, some 81 securities products are listed on the ETN and 204 on ETF. Transactions on those commodities have been made by individuals and suppliers of liquidity. The KRX feels that getting information on those commodities should be made easier to spur transactions.
For instance, the robo-advisor advised investors to allocate 57 percent of their assets in fixed income and 28 percent in stocks while keeping 15 percent in cash. The robo-advisor recommended that they invest 15 percent of their assets in high-dividend stocks while investing 14 percent in secure bonds to hedge against risks.
The AI program also advised them to invest 9 percent of their assets in international high-dividend stocks and bank loans each, balancing profitability and stability.
Local brokerage houses, such as NH Investment & Securities and Yuanta Securities, are also using AI-based programs to invest in exchange-traded funds (ETFs) and in designing their wrap accounts. Yuanta has offered robo-advisor services to individual investors since late January, setting up the program in its home trading system.
Experts say that robo-advisors will become more sophisticated in the future, integrating with investment strategies based on quantitative methods.
The smart money machines are getting smarter, cheaper and are proliferating at Terminator speed. Intelligent machines not only want to assimilate our middle class jobs, they want to manage our money. Moore’s Law projects that computers will equal the processing power of the human brain by 2025. In the meantime, hand over your retirement account.
Robo advisors automated computer algorithms that allocate, deploy and rebalance our investments are the hot topic in the financial advisory biz. And consumers, especially young adults, are warming to the idea. Low fees, a watchful HAL 9000 eye and Spock-like objectivity are some of the reasons why. There are so many services to choose from that we narrowed the field to the Top 10 for you. OK, technically, the Top 9 — with the last slot serving as an inventory of additional players in the sector.
Remember, the fees listed in the ranking are in addition to charges imbedded in the investments, such as management expenses found in mutual funds and exchange-traded funds (ETFs).—Robo advisors—are listed in descending order, based on reported assets-under-management.
Asia whose online commerce culture is one of the fastest developing, is a huge opportunity to gather assets from the USD savings of Chinese retail investors.
In January this year, Hong Kong-based brokerage 8 Securities launched a robo adviser called 8Now!, targeting retail investors with a minimum $10,000 initial investment in Hong-Kong and Japan. The platform can invest in any ETF listed on the US stock exchange and has already $800mil AUM.
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