ETFmatic takes the guesswork out of long-term investing, enabling our customers to achieve their investment goals while maintaining a risk level they feel comfortable with.
Finance and insurance are about an uncertain future. It's about managing it. It's not about necessarily beating the market, it's about managing risk in such a way that we can be productive members of society and we can achieve our goals.
Exposure to equities vs bonds vs cash will have a bigger impact on risk and return in your portfolio.
We ensure that each ETFmatic portfolio is designed to meet the risk/reward profile that each customer is comfortable with. We then use dividend payments and additional contributions to automatically rebalance the portfolio back to this optimal profile, ensuring customers stay on track to their investment goals.
Driven by the overall asset allocation targets, we then optimize the holdings to ensure that our customers hold the index funds that are most cost efficient at any given point in time. We constantly review the ETF landscape and rank ETFs in each asset class. We look for ETFs with the lowest annual expense ratios, minimal tracking error, and sufficient liquidity.
Behavioural biases often negatively impact the returns that a typical investor sees in the market. They get overly optimistic in bull markets and overly negative in bear markets, buying when assets are expensive and then selling them when they are cheap - the opposite of what they should be doing.
Using ETFmatic our customers can quickly design personal investment goals and corresponding contribution plans, establish a routine to their savings and automatically stick to this plan through the market ups and downs, reducing the negative impacts of traditional investor behavior.
While a 100% allocation to equities might be appropriate for an 18-year old saving up for his retirement, this asset allocation will probably not be true as this person actually nears retirement. At ETFmatic we recognise that our customers portfolios need to adapt over time. We allow you to manage your time horizons and risk profiles for each goal, adjusting these factors at any point in time.
ETFmatic also enables our customers to define how they will want to use the money held in their portfolios once they stop contributing to them. Will they need all of the cash in 15 years to send their kids off to University? Or is this their retirement savings that they will want to spend over 25 years of retirement? We use this information to further improve the allocation model for each individual portfolio.
ETFmatic's methodology has been peer reviewed over the last two years, and we are continuosly implementing new improvements. You can always read the latest version of our whitepaper here and are welcome to share any questions or feedback emailing us.