ALGEBRA is a Robo-Adviser or what’s also coming to be known as a Digital Advice solution. The idea behind ALGEBRA is that it can combine free financial advice with very high quality asset management solutions that are normally only available to high nett worth individuals through hedge funds and family offices.
It can do all of this for you with one of the lowest charges available anywhere in the world for an initial investment minimum of just USD $1,000.
ALGEBRA is specifically targeted to the Asian market. It offers a range of tools such as education planning that clients have told us are important to them and it can offer different investment solutions for clients choosing Sharia compliant or other forms of ethical investment.
As a Digital Advice platform ALGEBRA will take you through a series of goals and give you an indication on the levels of money that you will have to invest to reach these goals.
This plan is then automatically incorporated in a risk weighted portfolio that will be managed over time for you to help you achieve your desired financial goals.
ALGEBRA’s investment solution is based on a smart beta algorithm. This strategy is known as the Master Select or for Sharia compliant investors, the Islamic Master Select.
The idea behind smart beta solutions is to give customers the outperformance of a managed fund for the cost of an index tracker. Master Select uses technology to monitor 10 of the very best 5 star rated fund managers in the USA. The premise is simple, most fund managers and stock pickers tend to have only 4 or 5 companies that they really like. However, to run a well-diversified fund they must choose another 40 to 50 stocks. This is the total opposite approach recommended by Warren Buffett who warns against buying too many stocks that you don’t like.
Our algorithm determines which stocks these top performing managers are over weighted in and have held the longest. These are the stocks that research suggests they really believe in.
We then take 5 from each manager to create a well-diversified basket of 50 stocks.
Where a traditional managed fund may charge you around 1.9% a year for a multi asset allocation strategy, the management charge for ALGEBRA’S portfolio is just 0.4% per annum.
This is the same level of charges you would normally expect to receive from an index tracking ETF. However, the smart beta strategy used by ALGEBRA has outperformed the DOW Jones Index in the USA by over 12% since inception in 2014.
| Cautious | Balanced Cautious | Balanced | Balanced Aggressive | Aggressive | |
| Non-Sharia | 9.65% | 10.43% | 11.20% | 11.96% | 12.71% |
| Sharia | 6.01% | 6.65% | 7.28% | 7.90% | 8.52% |
Simply by removing the costs of humans involved in the process we can dramatically scale back the costs. We also benefit from cutting several middle-men out of the process. Traditional mutual funds and unit trusts have a series of service providers such as lawyers, accountants, administrators and custodians that all require the customer to pay more.
While such people were needed 10 or 15 years ago to run such an investment efficiently these roles can all now be replaced by Fintech based solutions. This makes it cheaper, easier and in many instances safer to run a collective investment.
In addition, by combining stock orders with brokerages we can get further reductions on the trading and administration costs associated with an individual account. This means our clients benefit from the same kind of cost levels offered normally to just the biggest banks and hedge funds.
Unlike most platforms, ALGEBRA does not charge any fixed fees. In addition, we DO NOT charge for financial advice. Client fees paid to ALGEBRA are limited to a quarterly charge of 0.1% custodian charge and a 0.1125% per quarter portfolio management charge.
This equates to a fee of 0.85% annually in total.
Unlike many investments in Asia there is no initial charge, hidden fees or surrender penalties. You can close your account at any time with NO PENALTY even if the account has been open for just one day.
The investments that we manage are based on the equity and bond markets and will be subject to the usual volatility associated with any such investment. Investment prices go up as well as down and in certain circumstances you may suffer a loss of part of your investment.
YES, when you purchase an investment portfolio through ALGEBRA our company purchases the underlying investments and holds it in a segregated account. The accounts are held by heavily regulated investment brokerages in the USA that are themselves regulated by the Securities and Exchange commission. These assets do not form part of the company’s balance sheet so even in the event of financial failure your money will be returned to you.
Labuan is one of the largest offshore investment destinations in the Asia Pacific region. Labuan is a territory of Malaysia and one of the major centres in Asia for the Insurance and Investment Banking industries. Labuan benefits from being on the OECD’s whitelist of offshore investment destinations and is fully compliant with all international reporting standards.
In addition to offering a well-recognised and regulated environment, Labuan also has some of the best tax benefits of any destination in the Asia Pacific region.