Emperor Investments – Robo Advisor Review [In Depth]

Emperor Is A New & Innovative Robo Advisor Offering A Pure Equity Portfolio, Dividend Harvesting & Potentially Market-Beating Performance.

REVIEW BREAKDOWN
Fund Performance
Dividend Harvesting
Hybrid Robo Advisor Service
Tailored Portfolios Available

Emperor Invests – Best for a Fully Automated Pure Stock Value Portfolio with Industry Leading Track Record of 16.85% vs S&P 500 7.6%

 

Emeperor Investing Robo Advisor Pros Cons Performance Rating:★★★★★
Fees AUM: 0.6% ★ Offers pure equity investing. Thus no funds or ETFs offered ✘ No ETFs or mutual funds available. 16.85% vs S&P 500 7.62%
Hidden Fees: None ★ Harvests all dividends ✘ No Tax Loss Harvesting Yet.
★ Offers direct stock investing – you own the stock ✘ Higher than Average annual fee
Visit Emperor ★ Option for dividend re-balancing available.
★ Low $2000 minimum balance
★ Tailored portfolios available.
★ Hybrid – machine plus human research

 

Launched in 2018 in Toronto Canada, Emperor Investments brings something new and innovative to the table.  Unlike most Robo Advisors all stocks that Emperor purchases on your behalf are directly owned by you and available in your portfolio, so there is no abstraction of ownership of the underlying assets, this is something I really like and consider important with any service you choose.

The Investing Methodology

Emperor is also different from most of the Robo Advisors on this list because they are dealing purely with stock equities only.  Many Robo Advisors are simply based on the purchase of ETF’s in the USA or across the globe for diversification.  Emperor takes a much more detailed and scientific approach to individual stock selection.  Firstly they have chosen to combine statistical analysis of money flows using the Markowitz [1952] Mean-Variance Optimization Model, this uses statistical technical analysis of the relationships between different stocks and indices. This is then used with fundamental analysis using the Fundamental Indexing [FI] approach which rates, ranks and balances a portfolio allocation to companies based on the core fundamentals including but not limited to the Sharpe Ratio.

This according to their extensive testing should lead to market-beating performance.

Robo Advisor Fund Performance

This all sounds complicated, but essentially combining technical and fundamental analysis allows Emperor to beat the underlying market, in this case, the S&P 500, by almost 9% per year.  The one caveat is, that the model has been forward tested over the last 11 years, so these results are theoretical, but the belief is that Emperor will continue to beat the market moving forward.  Only time will tell, but now the fund is live and the real world returns will be released soon for the 6 months from July 2018.

Of the 10 Main Robo Advisory Services, Emperor Claims the Best Market-Beating Performance

Chart 1: Impressive Emperor Returns
Chart 1: Impressive Emperor Returns (Source https://www.emperorinvests.com)

Emperor charges 0.6% per year on assets under management, this is low compared to mutual funds, but higher than the average costs of competing Robo Advisory services.  An important point here is although the average annual fees for Robo Advisors are between 0.25% and 0.6% per year, if Emperor delivers the expected real-world return of significantly beating the underlying index by 5% to 9%, the 0.6% fee they charge will be a small change, in fact, a bargain compared to the longer-term compounded gains you will receive.  In addition to this, there are no hidden fees with Emperor, many competitors will charge additional fees for the ETF’s or Mutual Funds they invest in on your behalf, not so with Emperor, it is simply a 0.6% flat fee.

Emperor Pure Equity Portfolio

Of the thousands of hours we have spent investigating Robo Advisors, Emperor is the only advisor that manages a portfolio based on equities/stocks only.  This is the only way to be able to attempt to beat the market performance, by essentially picking the right stocks at the right time.

Other Robo Advisors simply use the industry standard portfolio management theory to select a handful of US and international ETF’s covering different industries and market segments to ensure adequate diversification of your investments.

It is a much more difficult task to be able to balance a portfolio with stocks to attain the specific goals of outperforming the underlying index.

What I also like about the equity portfolio is that Emperor is acting as the advisor providing instructions on what is to be bought and sold in your portfolio.  However, they do not own your portfolio, you have sole control and access to your account to deposit and withdraw as you wish.  Your account is operated by an institutional grade service provider called Folio Investments Inc.

Folio Investments, Inc. is a licensed broker-dealer and custodian was launched in 2000 by Steven Wallman, a former commissioner of the Securities and Exchange Commission who is widely recognized for his advocacy on behalf of investors. They provide investment technology and other services to thousands of financial services firms and fortune 500 companies.

Dividend Focused Investing For Regular Income

All dividends are automatically harvested from the companies that your portfolio owns stock in.  Emperor does have a focus on value investing, so you can expect regular dividend income.  This income is then automatically reinvested into further stock purchases.

Emperor has provided me insight into three of their key dividend-focused portfolios you can choose to invest in, it makes very compelling reading.

Dividend Focused Series 1

Why invest in Emperor’s Dividend Focused Series 1 Portfolio?

This portfolio is diversified and designed to lower volatility and protect assets under severe conditions. We use Emperor’s version of Markowitz optimization to balance optimally the variability of returns of the 38 stocks in this portfolio against the returns the portfolio generates. Our version of Markowitz overweighs cheap stocks and under weighs expensive ones so as not to throw out expensive stocks whose returns provide diversification benefits and smooth out returns in good and bad times. The companies in this portfolio are all long-term dividend payers and sell well-recognized brands protected by deep moats. We believe these companies have above-average growth prospects and, have the potential to provide a reliable source of dividend income for clients.

Dividend Focused Series 2

Why invest in Emperor’s Dividend Focused Series 2 Portfolio?

This portfolio is concentrated with approximately 22 holdings and designed to provide slightly more volatility than
our Dividend Series 1 portfolio. The companies in this portfolio are all long-term dividend payers and have the potential to
continue to pay dividends in the future. In addition, we believe these companies have above-average growth prospects and are
protected by deep moats. Our portfolio optimization algorithm, our version of the famous Markowitz algorithm, enables us
to buy these stocks for a reasonable price. We over weigh cheap stocks and under weigh expensive ones and do not remove
expensive stocks, thus benefiting from their risk reduction qualities.

Dividend Focused Series 3

Why invest in Emperor’s Dividend Focused Series 3 Portfolio?

This portfolio is the most concentrated (8% maximum holdings) portfolio of the dividend series, with 15 holdings. The goal is
to seek returns by investing in companies that are long-term dividend payers and have the potential to provide a reliable
source of income in the future. Our portfolio optimization algorithm, our version of the famous Markowitz algorithm,
enables us to buy these stocks for a reasonable price. We over weigh cheap stocks and under weigh expensive ones and do not
remove expensive stocks, thus benefiting from their risk reduction qualities.

Other Notable Service Detailsemperor-investments

Free Withdrawal – Some Robo Advisor Services or even mainstream broker charge you a fee to withdraw your own money.  This is not the case with Emperor, all withdrawals are free and unlimited.

Access To The Investment Team – Interestingly you also get access to the investment portfolio team.  These are the Ph.D. mathematicians and finance professors that construct the investment methodology and screen the company fundamentals of the stocks that you will be invested in.

Roth IRA, Traditional IRA and Rollover IRAs are all available with the service to enable you to invest as tax efficiently as possible.

Legal & Regulatory Oversight

We have background checked Emperor Investments and they are fully registered with the securities & exchange commission (SEC) as investment advisors.  Folio Institutional provides the operation of your account and they are fully registered with the SEC, FINRA and have full SIPC insurance.

Emperor Invests Review Summary

Being a new player in the Robo Advisor / Robo Investing space, Emperor has a lot to prove. According to their 11 years of forward testing & paper trading, their service will be in a position to beat the S&P 500 by a significant margin. It might be worth trying their service.

Visit Emperor To Find Out More

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1 Emperor returns are at the moment based on paper trading/ forward testing over the last 11 years, the real world returns will be released soon. ast performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. The results of forward-testing does not represent the results of actual trading using client assets and should not be considered indicative of the skill of the adviser. Forward-testing (aka paper trading) fails to address the broad market’s impact on individual securities and generally does not account for cost like slippage, commissions or fees. Forward-testing often includes “formfitting” which is the ability to select ideal entry and exit points. 

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