roboadvisors best performing

The Top 44 Performing Robo-Advisors by ROI (2019)

Robo-advisors are on the rise. It’s not surprising: they’re a convenient, one-stop solution for investing goals. If you’re looking to start investing, the right robo-advisor can help you maximize your gains and minimize fees.

But with so many to choose from, how do you know which robo-advisor is right for you?

One way to narrow the field of potential robo-advisors is to see which have offered the best return on investment. Although past performance does not guarantee the same results in the future, it does provide a way to measure their algorithms.

The top 44 robo-advisors for 2019

To streamline your competitive research, SuperMoney reviewed the performance of the top 44 robo-advisors. We created two ranking lists: one for the returns of the first quarter of 2019 and a second for the performance in the last 12 months. Notice that several of the robo-advisors in the first list are new, so they don’t appear in the trailing 1-year trailing taxable return list.

The highest-performing slot goes to TIAA’s Active robo-advisor, which provided a 10.93% return in the first quarter of 2019. That’s a full percentage point higher than the second-place finisher.

Robo-advisors with the best performance Q1 – 2019

NameQ1 2019 Taxable Returnvs. Benchmark
TIAA Active10.93%1.06%
Twine (John Hancock)9.87%0.39%
Personal Capital9.70%-0.27%
WiseBanyan9.60%0.60%
Prudential9.51%0.90%
Acorns9.40%0.79%
UBS Advice Advantage9.25%-0.14%
Wells Fargo9.24%0.34%
Wealthfront9.22%0.13%
Morgan Stanley Active9.20%0.20%
U.S. Bank8.97%0.36%
E*Trade (ETF)8.94%0.33%
TD Ameritrade8.91%-0.48%
IQvestment (Overstock.com)8.89%0.57%
Citizens Bank8.74%-0.26%
Morgan Stanley SRI8.74%0.03%
Fifth Third Bank8.72%0.11%
SigFig8.71%-0.09%
Wealthsimple SRI8.71%0.10%
Fidelity Go8.69%-0.02%
Ally Financial8.59%0.08%
Betterment8.58%-0.51%
Merrill Edge SRI8.54%0.03%
Morgan Stanley8.54%-0.55%
Wealthsimple8.53%-0.08%
TIAA SRI8.51%-0.10%
USAA8.50%-0.21%
Edelman Financial Engines8.49%-0.80%
Vanguard8.49%-0.12%
E*Trade SRI8.45%-0.26%
E*Trade Active8.38%-0.33%
Betterment SRI8.33%-0.28%
SoFi8.33%-0.28%
United Income8.13%-0.38%
Schwab8.02%-0.88%
Interactive Brokers7.98%-0.15%
BBVA Compass7.96%-0.65%
TIAA7.94%-0.77%
Zacks Advantage7.94%-0.38%
Ellevest7.80%-0.42%
FutureAdvisor7.75%-0.40%
Ellevest SRI7.69%-0.53%
Merrill Edge7.69%-0.42%
TD Ameritrade SRI7.43%-1.86%

Source: The Robo Report First Quarter 2019.

Robo-advisors with the best performance in the last year

Name1-Year Trailing Taxable Returnvs. Benchmark
Fidelity Go4.71%1.21%
Acorns4.40%0.90%
WiseBanyan4.35%0.87%
Wealthfront4.13%0.65%
Wealthsimple SRI4.02%0.52%
Zacks Advantage3.68%0.17%
Wells Fargo3.65%0.16%
Merrill Edge3.56%-0.04%
TIAA SRI3.53%0.03%
Vanguard3.46%-0.04%
Ally Financial3.43%-0.19%
E*Trade (ETF)3.34%-0.16%
SigFig3.09%-0.40%
Morgan Stanley SRI3.08%-0.38%
Ellevest3.03%-0.48%
USAA3.00%-0.50%
TIAA2.97%-0.53%
TD Ameritrade2.75%-0.71%
SoFi2.67%-1.00%
Wealthsimple2.62%-0.88%
Betterment SRI2.44%-1.06%
Personal Capital2.27%-1.15%
Betterment2.02%-1.46%
Morgan Stanley1.97%-1.51%
FutureAdvisor1.45%-2.10%
United Income1.09%-2.41%
Schwab0.86%-2.66%

Analyzing the data

Evaluating performance by establishing benchmarks

Comparing the performance of a company that trades primarily in stocks to one that trades primarily in bonds is like comparing apples and oranges. For example, one robo-advisor’s portfolio might be 80% stocks and 20% bonds, while another might be 60% stocks and 40% bonds. It would not be fair or accurate to compare their absolute performance against each other.

To solve this problem, we’ve used “benchmarks” which take these differences into account. These benchmarks adjust for the percentages of stocks vs. bonds in each robo-advisor’s portfolio. How are these benchmarks established?

First, you separately aggregate all equity holdings and fixed income holdings in the investment space. Then, you can use this data to establish a robo-advisor’s “expected” performance based on the makeup of its portfolio. This way, we can compare the efficacy of the robo-advisor’s algorithms, and not merely the composition of their portfolios.

Of the 44 robo-advisors we evaluated, more than half (28) underperformed against their benchmarks.

The top three robo-advisors which most substantively outperformed their benchmarks are:

  • TIAA Active (+1.06%).
  • Prudential (+0.90%).
  • Acorns (+0.79%).

Accounting for lifespan

Keep in mind that many of these robo-advisors are new, so they do not have a long-term track record.

Of the 44 robo-advisors that we reviewed, only 27 accounts had performance data for a full year. Two-thirds of them (18) underperformed their benchmark on a full-year basis.

The three best performing robo-advisors over the last 12 months were:

  • Fidelity Go (+4.71% return, +1.21% better than benchmark).
  • Acorns (+4.40%, +0.90%).
  • WiseBanyan (+4.35%, +0.87%).

What is a robo-advisor and other frequently asked questions?

Robo-advisors are automated financial advisors whose advice is driven by algorithms, not subjective human judgment. If you work with a robo-advisor, you’ll receive financial advice and investment management services on a digital platform, as you would with a full-service financial advisor.

By automating financial advice and investment management, robo-advisors democratize financial services. Plus, these platforms are often more accessible than human financial advisors. For example, they generally have lower minimum investment requirements and charge lower fees.

How much money do I need to open an account?

It varies! Some companies offer accounts with no minimum investment, while others require $100,000 or more. The most common minimum balance requirement is $5,000.

Are there robo-advisor accounts with no minimum balance?

Yes, there are! If you’re just starting out, a robo-advisor account with no minimum balance requirement is a good place to begin. But remember, some may charge higher management fees to compensate for the low balance in your account.

Looking for a robo-advisor with no minimum balance requirement? Consider the following:

What is SRI?

When you review the top-performing robo-advisors of 2019, you’ll notice that many have an SRI designation. SRI stands for “socially responsible investing.”

Some investors promote social change by exclusively investing in companies that share their values. As such, many investment management companies offer SRI-conscious investment platforms which select for socially responsible companies. Using an SRI-conscious robo-advisor is a low-effort way to keep your investments in line with your morals.

How much do robo-advisors charge?

Like traditional financial advisors, robo-advisors charge an annual fee for their services. Typically, they’ll charge you a percentage of your assets. However, some robo-advisors charge a flat monthly fee instead.

Most robo-advisor accounts charge fees ranging from 0.25% to 0.50% of your investment balances each year. But some robo-advisors waive the fee for clients with smaller balances. Are you looking for a robo-advisor with no fees? Consider the following:

How do robo-advisor fees compare to mutual funds?

A 2018 Morningstar study of mutual fund fees found that the average U.S. investor paid 0.52% expense ratio on their mutual funds. With the majority of robo-advisors on this list charging 0.50% or less, investors have the opportunity to save money every year.

Is investing with a robo-advisor right for you?

Robo-advisor investing is a quick and easy way to start investing. You can start an account in a matter of minutes from your computer, tablet, or smartphone. And for those looking to save money, robo-advisors’ annual fees often cost less than those of a traditional mutual fund.

Want to dig into the investment world, but not sure where to start? Compare these financial advisors side-by-side to find the perfect one for you.