An in-depth review of DBS Digiportfolio

An in-depth review of DBS Digiportfolio

The good, the bad and the ulgy

DBS. Source: DBS.sg

DBS Digiportfolio is a Roboadvisor that made its debut in 2019, offering more options to retail investors alongside the DBS Vickers and the Regular Savings Plan. Roboadvisors are perfect for you if you are:

  1. You are looking to invest without spending the time and energy to research stocks or ETFs
  2. Have a small capital
  3. Lack the discipline to buy and hold stocks
DBS portfolios. Credit: Dollarsandsense.sg
DBS portfolios. Credit: Dollarsandsense.sg

Pros of DBS Digiportfolio

A dedicated team behind your portfolio

A strong point of the Digiportfolio is that they have a dedicated team of financial advisors that rebalances your portfolio every quarter.

Convenient

It is easy and convenient to invest since it is linked to your DBS bank account. DBS offers a hands-free approach to many investors who prefers to spend their time on other things than to monitor the charts.

Flexibility and options

DBS offers two types of portfolio, Global and Asia. The global portfolio invests in world UCITS ETFs that include major US companies like Apple and Microsoft while the Asia portfolio invests in Asia ETFs like China, India and Singapore. Four different risk levels are available, with 1 being the least risky (bonds) to level 4 with a high risk (equities).

Reliability

The best part about Digiportfolio is the stability and reliability of DBS bank, a bank isn’t going to shut down anytime soon. You know they will be around for many years and will not end up like Smartly.

Cons of DBS Digiportfolio

As a beginner investor who knew nothing about investments or stocks back in early 2021, I found many flaws and limitations with this Roboadvisor.

DBS questions
DBS questions

First of all, the Global portfolio requires a Customer Account Review (CAR) and Customer Knowledge Assessment (CKA). As shown in the screenshot, you need to pick an answer among the choices.

If you pick none of the above, it will direct you to this Asia portfolio (screenshot below) and tell you that you do not have enough experience to invest in the product.

CAR and CKA
CAR and CKA

If one had the experience in investing or had a finance diploma, there would have been no need to pay DBS a 0.75% fee to manage the portfolio.

In this case, I couldn’t invest in global portfolios just because I don’t have the necessary qualifications or experience. Sure, one can lie and put in the “right” choice, but it might backfire in the future.

they have asked investors to choose between Asia vs Global. This is already a bad thing. Robo is for investors who do not want to take too much headache. Investors shouldn’t be asked to make a choice. It is the Robo that should make the choice.

Hardwarezone forums discussion topic on DBS digiportfolio

Bad conversion rates to USD for Global portfolio

Now, before you all in on DBS’s global portfolio, you should know that it is denominated in USD. After you deposit SGD, DBS will do a currency conversion in order to invest in the assets. The currency conversion rates is really atrocious on DBS. An alternative I can suggest is to exchange SGD to USD on other platforms such as MooMoo broker instead of using DBS’s conversion before you invest in the Global Portfolio.

This is my caveat for the Global portfolio that I feel investors should know about.

Things you need to know before investing in DBS Digiportfolio

  • The minimum sum to start is $1000
  • Annual management fee of 0.75%
  • The Robo will rebalance your portfolio quarterly
  • It counts as a category in DBS Multiplier

Why I pull out

I started in early 2021 by investing in DBS Digiportfolio as a complete newbie with a total of $3000 invested. You may refer to my past monthly updates here! The reason why I withdrew earlier on is because of a few reasons:

1. I took my first steps towards ETF and stocks investing and no longer need DBS to manage my portfolio for a fee.

2. I am not really of fan of the recent rebalancing.

3. The portfolio has a significant weightage towards STI and Japanese REITS.

4. I found a better use for the money elsewhere.

5. 6% of my cash is held in reserve, it is too high for my liking.

6. A high percentage in Bons, REITS and cash is not a good growth strategy for me as I prefer full equities (Some may like this safer strategy).

Verdict

DBS Digiportfolio is a good alternative for beginners to start investing since it is safe and reliable. The chance of a heavy drawdown (aka negative returns) is lower as the portfolio consists of safer asset classes like bonds.

However, I feel like there is room for DBS to improve on this product. They could take away the CKA and CAR for one and perhaps introduce a flexible choice for investors to choose what they prefer as some may prefer full equities to achieve a higher return.                                                                                                                                                                                                                                                                                     

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