Titan Invest at a glance
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.
With its active investing approach and (historically) attractive returns, Titan will likely appeal to a certain kind of investor who’s looking for hedge-fund experience without the typical drawbacks:
- Titan’s track record and sophisticated portfolio management are difficult to find at other robo-advisors at this price point.
- Low investment minimums mean almost anyone can get started here, and instant deposits and fractional shares mean that your money gets to work immediately.
- However, Titan doesn’t offer a broad range of financial services, though – no cash management account, for example – so some potential clients may miss those features.
Those looking for a robo-advisor that can offer a broad range of services should check out Betterment or Wealthfront, or Fidelity Go, if they’re looking for a large financial institution that does it all. On the latter point, Merrill Guided Investing could be an attractive option for Bank of America customers. Those who are looking to run their own portfolio with some added financial features should investigate M1 Finance.
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