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Titan Invest is a new robo-advisor democratizing access to financial strategies previously reserved for wealthy elites. This sounds complicated, but we will explain everything in this article. To summarize early, Titan offers many of the advantages hedge fund billionaires get, but without requiring you to have millions of dollars. Sound appealing yet? There’s more.
Unlike competing robo-advisors that invest in diversified portfolios of ETFs based on risk tolerance, Titan Invest aims to achieve above market average returns by analyzing hedge fund filings and investing in equities while hedging market downturns with shorts of select industries.
Investing in hedge funds is typically reserved for the wealthy who qualify as accredited investors, so Titan Invest is an excellent option if you’d like to add upside potential to your portfolio and can manage the risk of an all-equity portfolio. It’s likely not the best choice as your primary investment device since hedge fund strategies carry more risk. But if you’d like to allot a percentage of your portfolio to potentially earn above average returns, this roboadvisor is for you
What is Titan Invest?
Titan Invest is an investing platform which offers investors exposure to hedge fund strategies without high minimum investment requirements and steep management fees. Through software analysis of hedge fund filings, Titan Invest follows equity strategies to deliver high returns on capital investment with twenty stocks per portfolio.
They also hedge investment portfolios by shorting parts of the market to limit losses in economic downturns. Through these hedges and quarterly portfolio adjustments, Titan delivers above average returns which investors previously couldn’t access.
Titan Invest is an exciting alternative to traditional robo-advisors which invest more passively in diversified ETFs and trading apps which allow you to trade equities and ETFs for little or no fee.
How Does It Work?
Titan Invest analyzes hedge fund filings to discover opportunities for investors and manages active portfolios consisting of around 20 stocks. Titan seeks out equities which have qualities including high competitive advantage, strong management teams, high growth opportunities, an attractive valuations.
Titan Invest also hedges portfolio holdings by shorting part of the market based on your risk tolerance to deliver above average returns and balance risk. Shorts allow the management team to see their position rise in value when the shorted sector lowers in value.
Titan offers two strategies: The Flagship strategy and The Opportunities Strategy.
The Flagship strategy is a growth strategy aimed at delivering compounded returns which exceed the S&P 500’s returns. This strategy’s portfolio holds around 20 stocks with long-term intrinsic value opportunities with just a few stock pick changes each quarter.
The Opportunities Strategy is a small and mid-cap strategy aimed at delivering compounded returns which exceed the Russell 2000 indexes’ returns. Titan researches and holds around 20 stocks in this strategy with low turnover and the potential for long-term growth.
Pros and Cons
Before choosing Titan Invest for your investment portfolio, it’s important to understand the essential pros and cons and how it can benefit your investment portfolio.
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Now that you understand its pros and cons, check out a full breakdown of Titan Invest’s fee structuring.
Titan Invest Fees
Fees are essential to understand when choosing a new robo-advisor as these can eat into your returns and reduce long-term wealth accumulation. Fortunately, Titan Invest’s fees are comparable with other roboadvisor offerings and are lower than hedge fund fees, which can include positive performance fees.
In terms of fees, they charge just $5 a month for users with total assets under $10,000, and a 1% annual advisory fee for users with assets over $10,000. For example, if you held $10,001 in Titan Invest, you would be charged $100.01 a year.
Titan Invest doesn’t charge additional fees for trades or performance fees if performance is positive. They also don’t charge withdrawal fees, and withdrawals can take 2 to 4 business days.
Titan Invest Performance
Understanding Titan Invest’s previous performance will help you determine if it’s right for you. It’s important to remember that past performance is not indicative of future performance, but it can at least demonstrate investment expertise.
Returns
According to Back End Benchmarking, in one year of performance leading to December 2020, Titan Invest returned 44.81% in an equity-only portfolio versus a normalized benchmark of 27.22%.
In this trial, Titan Invest clearly overperformed with its hedge fund-like investment strategy. With its analysis of hedge fund filings and hedging of the market, Titan aims to outperform traditional indexes like the S&P 500.
Risk
Titan Invest carries more risk than traditional investment services as no assets are held in bonds or cash, and there’s a high degree of concentration, with strategies holding just twenty stocks per quarter. Titan’s hedging strategy can reduce risk, but your principal can lose value as with all investments.
It’s best to treat it like the rich treat hedge funds by only holding a percentage of your portfolio in Titan. This can help you outperform the market with some capital while limiting your risk exposure.
In this trial, Titan Invest clearly overperformed with its hedge fund-like investment strategy. With its analysis of hedge fund filings and hedging of the market, Titan aims to outperform traditional indexes like the S&P 500.
Is Titan Invest Legit?
Yes, Titan Invest is a legitimate investment platform with SIPC insurance (up to $500,000) and is a custodian for hundreds of millions in assets. Over 25,000 clients trust them with their capital.
Is Titan Invest a Mutual Fund?
No, Titan Invest is an algorithmic investment advisor and not a mutual fund. Titan actively manages two investment strategies for clients and serves as a hedge fund alternative instead of a mutual fund management firm.
Competitor Comparisons
Understanding how Titan Invest compares against Wealthfront, Betterment, and index funds when it comes to features and fees will help you make an informed decision about investing with Titan. Wealthfront, Betterment, and traditional index funds offer different services than Titan, so it’s useful to compare the pros and cons of each investing strategy and how they can fit into your portfolio.
Titan Invest vs. Wealthfront
Wealthfront is a roboadvisor which manages portfolios of passive investment funds for clients with varying degrees of risk tolerance. Titan Invest offers portfolios aimed to exceed the returns of indexes Wealthfront bases its investments on and offers additional value like hedging of the market, which Wealthfront does not offer.
Titan can serve as a complementary service to Wealthfront, delivering above average returns with more risk than Wealthfront.
Titan Invest vs Betterment
Betterment is another roboadvisor which manages portfolios of ETFs, adjusting holdings based on risk tolerance. Titan can also serve as a complementary advisor to Betterment, offering higher returns for a percentage of your portfolio while the majority can be invested through Betterment, which offers more traditional portfolios.
All roboadvisors carry risk, but Titan Invest’s concentration in twenty stocks per strategy can carry more concentrated risk than diversified passive portfolios through Betterment or Wealthfront.
In terms of fees, Betterment costs 0.25% a year on all assets, compared with $5 a month or 1% a year on all assets with Titan Invest.
Titan Invest vs Index Funds
Index funds are passively managed mutual funds which track the performance of indexes like the S&P 500, asset classes, or industry-specific indexes. Popularized by John Bogle, founder of Vanguard, portfolios of index funds can deliver diversification with low fees, far below those of traditional actively-managed mutual funds and roboadvisors.
Titan Invest offers active management of strategies with higher concentrations in 20 stocks per strategy, but also offers hedging of the market. Titan’s fees are higher than index funds, which can cost as little as .04% through expense ratios. However, the fees you pay deliver hedge fund-tier strategies.
Conclusion: Is Titan Invest Right for You?
As this guide revealed, Titan Invest is an exciting new investing platform which can help traditional investors earn above-average returns with strategies traditionally reserved for wealthy elites. Titan’s hedging strategies serve as an excellent means to reduce overall portfolio risk and reduce the effects of market downturns on your portfolio.
Titan is an excellent supplement to traditional robo-advisor portfolios like Betterment and can deliver benefits these advisors and passive portfolios cannot. Titan Invest also delivers more diversification than most retail investors can manage with their own actively managed stock portfolios.
While Titan Invest has above-average fees, these fees are smaller than hedge fund normally charge and don’t include performance fees. A primary downside of Titan Invest is the lack of a dedicated advisor to speak to, but their intuitive interface makes it easy to look beyond this shortfall. Titan is an excellent choice for new and seasoned investors and could usefully supplement any investor’s portfolio.
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