Titan Invest is one of the most unique robo-advice accounts we track at Backend Benchmarking. Titan has 75mm in its flagship portfolio and it launched in early 2018, making it one of the newest players in the robo-advice industry. Titan’s goal is to make the benefits of a hedge fund accessible to the general public by using modern robo-advisor technology.
When looking at its investment strategy, Titan invests in an all-equity portfolio concentrated in 20-30 individual stocks designed to beat the market, a proposition opposite of the diversified, index-based robo advisors that we have grown accustomed to. Its stock-selection process involves screening for the most commonly owned stocks at top hedge-funds and then conducting bottom-up research on those securities. In contrast to how most robo-advisors manage risk by allocating part of the portfolio to fixed income, Titan uses a “personalized-hedge”; Titan shorts the market in a customized way to fit a client’s risk tolerance. We noticed this risk-management tool in full effect during the COVID-19 sell-off. Read more about that in our Robo Report Q1 performance commentary.
Titan has not offered any sort of financial planning at this point. Instead, it aims for a strategy focused on investment returns and relative outperformance. In terms of fees, its flagship strategy charges 1% which contrasts with typical hedge funds that charge a 2% management fee and another 20% in performance fees. This management fee is low when compared to traditional hedge funds, but on the high end when compared to other robo advisors. However, given that Titan is focused on investing directly in individual securities, there are minimal underlying-fund fees. Titan offers a zero-minimum initial investment, making it accessible to all investors. And if compared with a traditional hedge fund, the strategy is highly liquid with no lock-up periods.
All in all, Titan offers one of the most unique strategies we monitor. They are one of the only accounts we hold that is 100% equities and the only account that uses a short to manage risk. Also, they are one of the few that does not rely on ETFs and, even more fundamentally, does not emphasize diversification as a primary feature. We will see how this approach performs and garners interest in the years to come. We will be monitoring it closely in our quarterly Robo Report.
- A unique strategy for those looking for alpha in a robo-advice platform
- A unique risk-management style of personalized hedging
- Competitively priced when compared to hedge fund alternatives
- No minimum initial investment
- Minimal diversification
- No financial planning
- Relatively high advisory fee compared to other robo advisors
- Actively managed by a fairly young CIO and investment team
Platform Facts: (Winter 2020 Robo Ranking)
|Account Minimum||No minimum|
|Advisory Fee||1% annually|
|Average Weighted Expense Ratio||Approximately 0%, this account typically holds individual stocks|
|Accounts Supported||Taxable, Traditional, Roth, SEP or Simple IRA|
Performance Figures (as of 03/30/2020):
|Titan Invest Compared to Normalized Benchmark**||6.53%|
*Our Titan Invest portfolio has not been opened for 2 years, which is the time period for performance and risk statistics we typically include in our profiles.
**To adjust for differences in equity–fixed-income allocations in our various portfolios, we have created a methodology for comparing performance called Normalized Benchmarking (more details can be found here). This method adjusts for each portfolio’s unique allocation and then compares its performance against a benchmark with the same allocation.