I am quite curious whether it is possible for Freetrade to replicate the robo-advisors’ portfolio management products, and how much users could realistically save if used Freetrade instead
For example, Scalable Capital offers 18 ETFs in its universe, which they mix based on the clients’ risk perception. Some of these Freetrade has already got on offer (the majority match word-for-word) and I am sure many others will be added over the course of a few years. In total, I see 42 various ETFs in my Freetrade app, not even considering that the universe will nearly double in the next month or so!
Here is a comprehensive list of some notable ETFs and a comparison on who offers what. I have omitted 7 ETFs offered by Scalable Capital and 18 ETFs offered by Freetrade to save some space.
|Asia Pacific ex Japan|
|Developed Europe Property|
|Euro Government Bond|
|Euro Stoxx 50|
|FTSE All World|
|UK Corporate Bonds|
|US Corporate Bond|
|US Treasury Bond 1-3Y|
|US Treasury Bond 3-7Y|
|US Treasury Bond 7-10Y|
As it can be seen, the most popular ETFs are already on offer. However, what Freetrade does not have is the 0.75% management fee on the top of the existing funds’ fees charged by Vanguard, Blackrock, State Street and the others. That is an additional £150 per year after the funds’ fees with a portfolio of only £20,000. And that is just for the privilege to be a client (by the way, on their website it is called “Best ISA”!). Does 0.75% not sound expensive? Let’s look at some figures:
|ISA Capital||/||Scalable fee (1Y)||Scalable fee (3Y)||Scalable fee (5Y)||/||Freetrade fee (1Y)||Freetrade fee (3Y)||Freetrade fee (5Y)|
Scalable Capital is only one example, I looked at a few others (including the famous Nutmeg), all seem to have 0.75% as a baseline, with some price alterations at certain (rather abmitious) capital benchmarks, but nothing that would make me feel “wow, that’s a nice deal!”
I wonder if Freetrade could provide some blog-type guidance on similar to robo-advisors’ portfolio compositions and thus let users invest in these combinations of ETFs themselves rather than rely on a third-party provider.
Very interesting if people consider robo-advisors good value in the first place. If not, would you be happy to see something like this as part of your Freetrade ISA?
- Used robo-advisors before, they are great!
- Used before but would be curious to consider Freetrade’s offer if there was one
- Never used but would be curious to consider Freetrade’s offer if there was one
- Not interested, I am happy managing my portfolio myself
Anyway, what is your own experience with this investment product? With some guidance, would you rather replicate their portfolio with Freetrade and save on the fees by managing your portfolio independently?
And remember, you are responsible for picking your own investments with Freetrade hence robo-advisors are a little bit different to what is on offer here.