Unhedged review: Invest in the share market with robo advice

The next generation of robo-advisors has arrived. New advisor Unhedged is promising to democratise investing by using the sophisticated quant tools used by leading traders and making it accessible to all.

No reviews yet. Write a review

Robo funds

Investment product

$100

Minimum Investment

3

Number of Portfolios

0.49% + 20% success fee

Fees

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

About Unhedged

Unhedged is a new robo advisor which launched in March 2022 and aims to bring the powers of quants to retail investors.

With a simple objective of democratising wealth, Unhedged sets out to make investing easy, with the majority of decisions being taken out of the hands of investors.

Instead of spending time studying reports, Unhedged offers low-cost online investment management, with most of the returns based on out-performance, meaning you win and the broker does too.

What is a quant?

Quantitative trading, AKA quant, involves using computers and mathematical models to capitalise on opportunities in the market.

Essentially it is a power trading tool that involves research work on historical data with the aim of identifying undervalued shares. While it is widely used in the industry, the complex IP means fewer individual traders have access to computer advice.

What can you trade?

Unhedged is a robo advisor, which means investors get access to algorithmic trading. In this case you'll have 3 main options:

  1. Equal weight. Your portfolio is divided equally between the algorithms, with each holding 33%.
  2. Equal risk. Pre-sets suggest a different allocation every month. An AI algo calculates and combines so each algorithm adds a similar risk to your portfolio
  3. Expert mode. Take investing into your own hands without an algo code. Choose your allocation between algorithms and choose your own risk-return profile.

Performance

Unhedged has written and maintained different algorithms that have had differing performances over time.

The robo advisor notes it has momentum, sector rotation and industrial activity algorithms which have different performances at different times in different market cycles.

However, the company notes it aims to beat the benchmarks by a few percentage points over the long run (years). It highlights that the majority of the fees it charges (we will get to that soon) are based on performance and as such its incentives are to get greater returns for you.

Key features

Diversification

Unhedged offers 3 main options that comprise a mix of diversified assets. As such, you immediately own a basket of stocks.

Low Cost

The robo advisor relies on higher volumes and outperformance fees, meaning it can keep costs relatively low.
If you invest $10,000 you'll pay a $49 fee per year. Fees are then based on outperformance.

Decisions taken out of your control

While you can choose your portfolio allocations and the algorithms you want, one of the main perks is the guesswork is taken out. After all, you can simply set a balanced approach, continually reinvest and let the algorithms do their work.

Support available for customers

You can get help in a couple of ways:

  • Live chat is available between 9am and 5pm weekdays, excluding public holidays
  • Email support

Fees

You'll pay a base fee of 0.49% in order to use the Unhedged platform. On a balance of $10,000, the fee would be $49 per year or 13 cents a day.

Unhedged also charges based on the portfolio's success. However, if the quant beats the market and the market falls, investors won't be slugged with an additional cost.

Instead, the "success fee" of 20% will be charged to the additional value the algorithm generates compared with its benchmark. While this obviously varies for each algorithm and what it is being compared with, Unhedged says on average it'll be a 0% to 1.61% fee per year.

Pros and Cons

Pros

  • Decisions are made for investors
  • Emotions are taken out as it's a computer-generated service
  • Cheap fees
  • Get started for as little as $100
  • Incredibly easy to set up an account

Cons

  • The more successful your portfolio is the higher the fee
  • Lack of control over what is traded

How to open an account with Unhedged

Setting up an account with Unhedged will be a drawcard for new users because it is so simple. Here's what to do:

  1. Download the app.
  2. Add your name and email address.
  3. Verify your account through a 6-digit code.
  4. This will take you to a demo account; select live account.
  5. Fill in a few more details.
  6. Start trading.

Ask an expert

To ask a question simply log in via your email or create an account.

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site