Titan review 2023
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Titan Invest: Best for
- Sophisticated portfolio management
- Actively managed portfolio
- Low minimum
Titan offers a hedge-fund-like experience without investing in a hedge fund. Titan is a registered investment advisor that runs separately managed accounts, actively investing your money in a sophisticated portfolio that it designs itself – not the usual run of ETFs used by other robo-advisors. You’ll get a portfolio that has beaten those of other robo-advisors, and you’ll pay less than a typical hedge fund, too – all without some of the usual drawbacks of those kinds of funds. And unlike a hedge fund, it won’t require a huge upfront investment to get started, either. Titan makes a compelling proposition for those who are looking for attractive returns in an account that gives them a lot of flexibility.
Investors looking for a fuller range of features and lower management fees should have a look at Betterment and Wealthfront, both of which are leading independent robo-advisors. For those where low cost is the only objective, Schwab Intelligent Portfolios and SoFi Automated Investing may be more their speed, though Schwab requires a steeper minimum investment.
Titan Invest: In the details
Pros: Where Titan stands out
What’s most likely to attract you to Titan is its portfolio management, how it invests your money – and that’s a sharp distinction from robo-advisors. Titan actively analyzes the stock market and tries to outperform the Standard & Poor’s 500 Index, the bellwether for the market. Its active approach is in clear contrast to that of robo-advisors. While they buy a selection of ETFs that provides broad diversification, Titan invests in the actual stocks rather than funds. It selects the stocks using its investment team and analysis, and then builds a portfolio to beat the market.
Titan has three main strategies, each with its own fund:
- The Flagship fund: This fund invests in large U.S. growth companies, those valued at more than $10 billion. After analyzing this subset of stocks, it picks the 15-25 of them that it thinks offer the best risk-adjusted returns, and that can outperform the S&P 500 over time. Positions are approximately equal-weighted, meaning that you’ll own about the same percentage of each stock.
- The Opportunities fund: This fund invests in small and mid-size U.S. companies, those valued at less than $20 billion. After analyzing this group, the team picks the 15-25 positions that it thinks offer the best risk-adjusted returns and can outperform the Russell 2000 Index over the long term.
- The Offshore fund: This fund invests in companies across developed and emerging markets. After sifting through and analyzing non-U.S.-based companies, the team selects the top 15-25 positions that it thinks offer the best risk-adjusted returns and can outperform the MSCI World ex USA Index.
Regardless of which stock strategy you go with, Titan will hedge your position (more below). Titan has also been running a highly concentrated crypto strategy since August 2021.
Titan offers a few other perks that may minimize some of the downsides of a traditional hedge fund:
- You’ll have your own separately managed account, meaning it’s entirely yours.
- Your money will be instantly deposited into your Titan account, meaning it’s ready to be invested when you are.
- You won’t have a lock-up on your money, meaning you can withdraw it when you need it.
- You have access to Titan’s portfolio managers.
This sophisticated portfolio management makes Titan stand out from the rest of the crowd.
Titan uses hedges when it builds portfolios, a strategy that helps you offset losses when the market falls. That is, the hedge makes you some money, helping to cushion your portfolio. To hedge its portfolios, Titan uses an inverse ETF, which rises as the market falls. This hedge costs investors an additional fee, but the ETF makes up a fraction of the portfolio’s value as a whole.
As a Titan investor, you can select whether you want to be more aggressive (less hedging), moderate (medium hedging) or more conservative (more hedging).
When Titan believes the market is not in a downturn:
- Aggressive portfolios are 0 percent hedged.
- Moderate portfolios are 5 percent hedged.
- Conservative portfolios are 10 percent hedged.
When Titan believes the market is in a downturn:
- Aggressive portfolios are 5 percent hedged.
- Moderate portfolios are 10 percent hedged.
- Conservative portfolios are 20 percent hedged.
It’s important to understand that the hedge creates a cost drag when the market is rising, but may pay off when the market turns down, helping to offset losses elsewhere.
Titan allows fractional shares, meaning that you’ll be able to put all your money to work immediately, regardless of how much you add to your account. Titan also reinvests any dividends in fractional shares, so cash payouts go back into your positions. Dividends are not reinvested immediately but are plowed back into the portfolio approximately on a quarterly basis. Titan hopes to offer immediate automatic dividend reinvestment in the future.
The ability to buy fractional shares is a popular feature among newer investors – and not all robo-advisors offer it.
Low account minimums
You can get started for a modest $100 in the firm’s Flagship fund with either an individual or IRA account. You’ll need at least $10,000 in net deposits across your Titan accounts to access the Opportunities and Offshore strategies.
So you can get started with a low minimum in the Flagship fund and then build your account if you want to participate in the other funds. For a hedge-fund-like product, this is a cheap buy-in and gives you access to investment managers with proven expertise and a goal to beat the S&P 500.
Cons: Where Titan could improve
Titan’s management fee is straightforward. It charges a flat $5 per month for accounts less than $10,000 and 1 percent of assets for accounts above $10,000, charged monthly. In practical terms, that means every $10,000 under management costs $100 annually.
Should Titan be marked down for a management fee that’s quite a bit higher than the average robo-advisor? Or should it be marked up because clients are getting a hedge-fund experience at much less than the typical “2-and-20” fee structure (2 percent of assets and 20 percent of returns) of a hedge fund?
The answer to that depends on what Titan can deliver. On that basis, Titan may well be worth it. Its aggressive portfolio (which is less hedged and so less subject to the cost drag of hedging) has returned 18.8 percent annually (net of fees, through Dec. 31, 2021) since its inception in Feb. 2018. Titan says that compares to 17.8 percent on the S&P 500 and 11.2 percent and 10.9 percent at Wealthfront and Betterment (using their highest-risk stock portfolios), respectively. So factoring in fees, Titan is outdistancing its benchmark passive index and key rivals, too.
Can Titan maintain this level of outperformance? It’s had just a few years under its belt as an independent firm, though its advisors have backgrounds in the industry. And as the old investing saying goes: fees are certain, but returns are not.
Titan has just a handful of account types: individual taxable accounts as well as traditional IRAs, Roth IRAs and rollover IRAs. That’s slim pickings. Yes, you get a typical range of retirement accounts, but you won’t get other popular types such as joint accounts or SEP IRAs.
This limited selection might be a dealbreaker for you if you need a specific account.
Cash management account
You won’t have access at Titan to a separate cash management account, where you can stash your cash before you move it on to your Titan investment account. In this respect, Titan is unlike major robo-advisors such as Betterment, Wealthfront and Ellevest, each of which offers a solid cash management account with a variety of checking-like features, such as early direct deposit, no monthly fees and fee-free ATMs.
Again, that shouldn’t be a dealbreaker for many customers, especially if they see Titan as yet another financial partner, but those looking to consolidate their financial life with fewer firms may find it suboptimal.