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Order Execution Policy

Important Notice and Standard Disclaimer

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Frequently Asked Questions

Our Chief Investment Officer, Freddy Lim who leads our investment team, has over 15 years of experience in cross-asset investing and portfolio management. Freddy joined StashAway after years of investment expertise as MD and Global Head of Derivatives Strategy at Nomura. He gained his strong background in cross-asset portfolio at Millennium Capital Management and as APAC Head of G10 rates strategy at Citi. After his Bachelor’s Degree in Econometrics and Quantitative Economics at Monash University, he started his steep career as Head of Interest Rate Strategy at Morgan Stanley Japan.

How much experience does your investment team have?

It is entirely possible to have a positive TWR but negative total return.Your TWR is positive because your portfolio’s return has increased in value since your first deposit. You can see that in the graph of the “Performance” tab in your app.However, in this case, you could still have negative dollar returns if you deposited the majority of your funds in this portfolio when the market was higher than it is now.Here’s a quick example of when this might be the case:Let’s say you deposited $100 in January in your StashAway account, and then the market goes up 10% by September. You’d have $110 in your account. Then, you get a $1,000 bonus and decide to invest it all at once, but the market goes down 5% over the next three months. In this scenario, your portfolio value would be $1,054.50 by December for a total of $1,100 invested. So you’d have lost $45.50.<figure class="ImageWithDescription__Figure-tvsb3c-0 bJeOQK"><img src="https://images.ctfassets.net/rscarh2t43r9/1IQBTUP6ZVitFv8klz8VG4/ea4ee1b729ed7ab2237dacfae148e407/Screenshot_2020-11-09_at_4.44.07_PM.png" alt="negative dollar return FAQ" class="ImageWithDescription__StyledImage-tvsb3c-1 kGrIiF"></figure>But this was not because the portfolio has performed poorly thus far- it went up 10% between January and September and then it went down just 5% between September and December. However, most of your money was invested right before markets went down.Your time-weighted return is positive because the performance of the first deposit of your investment has performed well between January and December, but your simple dollar return is still negative because of when you decided to make your deposits.

Why do I have a positive time-weighted return, but negative dollar return?

We are constantly looking to add more ETFs into our list of investment options. Click <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/r/how-stashaway-selects-etfs">here</a> to see our ETF selection criteria.

Will you be adding more ETFs to the list?

Technically, the ETFs are owned by Saxo, our broker. StashAway Management (DIFC) Limited (our legal entity) is a beneficiary of Saxo. Similarly, you are a beneficiary on our ledger. So in short, you are the owner of the ETFs in your portfolio(s).

Who is the legal owner of the ETFs in my portfolio?

With a goal-based approach, we analyse your personal financial situation and risk selection. Firstly, using this information, our investment team and the algorithm will select the most suitable portfolio. Secondly, we also use historical and live data to track market conditions to determine when major economic cycle shifts will occur. Combining these factors, we then design portfolios with medium-to-long-term outlooks that withstand the short-term fluctuations of the markets to yield long-term wealth.We detail our strategy here: <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/r/stashaways-asset-allocation-framework">StashAway's Asset Allocation Framework</a>.

What is your investment strategy?

The basis of our investment strategy is to build portfolios with particular asset allocations that are optimal for 4 different economic cycles. When our investment team identifies and signals a change in economic cycle, our technology will automatically re-optimise all portfolios' asset allocations. To learn more about our investment methodology, visit: <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/r/stashaways-asset-allocation-framework">ERAA</a>. You have the option to opt out of auto re-optimisation. If you opt in, we will re-optimise your portfolio(s) automatically and inform you via email after. Otherwise, we will send you a recommendation to re-optimise and you can choose whether to follow our recommendation or not.Were you looking for rebalancing instead? Click here for <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/faq/what-is-rebalancing">Rebalancing</a>.

What is re-optimisation?

StashAway’s Economic Regime-based Asset Allocation (“ERAA”) is a systematic, algorithm-based investment framework focused on strategic asset allocation. Some observers may think that the fact that it is purely systematic and does not include any element of human judgment is a limitation to this investment approach; to this, we disagree and argue that avoiding human bias is a key element of successful long-term investing that can only be achieved through a systematic approach. StashAway’s Investment Committee meets once a month to review the system’s recommendations and has an oversight function on the investment framework.StashAway does not invest in single securities (e.g stocks), but rather focuses on indices (e.g. ETFs) that track the entire market. Some observers may think that an exclusive focus on asset allocation reduces opportunities to achieve higher returns; we disagree as it has been demonstrated that more than 80% of return differentials across portfolios of similar risk is driven by asset allocation, and in the last 15 years, the greater majority of active managers that select single securities have underperformed their relevant benchmark indexes.StashAway does not use leverage and does not take short positions, limiting the amount of investment opportunities available. This limitation is an active choice of StashAway, as we prefer a more straightforward investment style that targets medium-to-long term wealth accumulation while keeping risks under control.As with any model, StashAway’s ERAA is data-dependent. It assumes that the data of average returns and risks of asset classes observed in past economic regimes would repeat itself. In reality, no models can guarantee that history will repeat itself.

What are the limitations of ERAA, StashAway’s investment framework?

A single return figure (Time-Weighted Returns vs Money-Weighted Returns) does not tell the whole story of how well a portfolio performs.Returns are one thing but the level of risk exposure your portfolio has in achieving those returns is an entirely different matter. Remember to consider how much risk your portfolio manager exposes your money to in the name of getting your returns.

How should you compare your StashAway returns to the returns of your other investments?

StashAway’s Economic Regime-based Asset Allocation (“ERAA”) framework builds and manages portfolios by targeting different levels of risk and attempting to maximize net investment returns at each risk-point.The framework is dynamic and strategic in nature, and it is built on 3 pillars: (i) Economic Regimes, (ii) Risk Shield and (iii) Valuation Adjustments.The First Pillar (Economic Regime) is at the core of ERAA’s portfolio construction logic, and uses economic data to adjust the target strategic asset allocation at each risk level. The main assumption behind this pillar is that the economy ultimately drives medium term markets’ returns.The Second Pillar (Risk Shield) is the risk management layer of the framework, tasks with identifying cases in which economic data either are unclear or are not driving market behaviour. When the Risk Shield’s thresholds are breached, ERAA immediately recommends adjusting portfolio composition to an All-Weather strategy, with the target of protecting capital during unpredictable times.The Third Pillar (Valuation Adjustments) takes into account each asset class’ valuation to under-weigh overvalued assets and discover opportunities to over-weigh undervalued assets. Valuation Adjustments are based on economic regressions, and therefore are anchored around ERAA’s main assumption that the economy ultimately drives medium term markets’ returns.If you want to know more about ERAA read our <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/r/stashaways-asset-allocation-framework">white paper on StashAway’s investment framework</a>.

What are the assumptions of ERAA, StashAway’s investment framework?

Rebalancing a portfolio involves adjusting the composition of a portfolio by buying and/or selling specific assets in order to re-align a portfolio to its target composition in the case that market changes influence the asset allocation of your portfolio.Learn more: <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/r/what-is-rebalancing">What is Rebalancing?</a>Were you looking for reoptimization instead? Click here for <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/faq/115007036267-what-is-re-optimisation">Reoptimization</a>.

What is rebalancing?

Our Investment team periodically assesses the fair value of the ETFs we invest in. When one is overpriced, it is excluded from all portfolios. When this ETF is fairly valued again, it will be re-introduced into the appropriate portfolios.

Why doesn't a particular ETF get picked for my portfolio, regardless of risk level?

To see your total assets and returns:Step 1: Log in to your StashAway account.Step 2: Select your portfolio.Step 3: Click on the “Assets” tabTo see your transaction history:Step 1: Go to “Transactions” tabStep 2: Click on the drop-down arrow labeled “All-Account transactions”Step 3: Select your portfolio and you may view all transactions (buy order, sell order, and/or dividend received) made for the respective portfolios.Your Monthly Statement is found under the "Statements" tab.

Where can I see all my investment activities?

StashAway will recommend a level of risk for each of your goals, based on your timeline, personal risk preferences, financial situation, and financial knowledge and investing experience. For goals with longer timelines, StashAway will recommend higher-risk portfolios compared to goals with shorter timelines that would recommend more balanced portfolios.If you decide to create a portfolio through StashAway’s “general investing” option, the platform will inform you in case you take more risk than you initially declared you wish to take with us.For both goal-oriented investing and general investing portfolios, the platform will cap the maximum risk you can take if you indicate to us that you do not have sufficient financial knowledge or investing experience, or that your financial situation is not solid.

What are the assumptions of StashAway’s financial advisory algorithm?

Dollar-Cost Averaging is investing a fixed dollar amount on a regular schedule, regardless of market conditions, you will purchase more shares when prices are low and fewer shares when prices are high. This ensures that you will invest at a reasonable price and exchange rate, and avoid investing at market tops, helping you to manage the risk of your investments.

What is dollar-cost averaging?

Goal-based &amp; General Investing portfolios - our system automatically reinvests any dividends you may earn.All dividend payments are reflected in your "Transactions" tab.

Where do dividends go?

Yes; with a goal-based approach, we analyse your personal financial situation. From there, we recommend a specific goal target, a specialised portfolio, and savings plan to reach your goal.

Do you give investment advice?

The financial advisory algorithm relies on your inputs to help you select the right level of risk for your investment portfolios. The only way the system can provide an appropriate recommendation is if you submit complete and accurate responses.

What are the limitations of StashAway’s financial advisory algorithm?

We don’t qualify our portfolios based on expected returns. Instead, we qualify them based on how much risk to which you’ll be exposed. Every StashAway portfolio is defined by the StashAway Risk Index, which indicates the potential loss of a given portfolio. <ul><li>Core Portfolios have a StashAway Risk Index between 6.5% and 22% </li></ul><ul><li>Higher-risk Portfolios have a StashAway Risk Index between 26% and 36%</li></ul>

What’s the difference between Core Portfolios and Higher-risk Portfolios?

Trades are executed every business day.

How often does your investment team make trades?

We invest in the most liquid and most cost-effective ETFs in the world, and those are listed in the US markets and denominated in USD.

Why do you invest in USD-denominated ETFs?

Time-weighted Return is the most commonly-used return calculation in the financial industry, and is an easy metric to compare returns between different portfolios. By tracking the portfolio’s performance from your first deposit, a portfolio’s TWR removes the distortions that various cash inflows and outflows create. In essence, TWR measures the portfolio manager’s ability to generate returns, not the effects of an individual’s deposit and withdrawal behaviours.

What is Time-weighted Return?

StashAway always ensures that the best interests of our clients are considered in the generation and execution of orders.For example, in the execution of customers’ orders, StashAway will consider multiple factors with the aim of achieving the best possible execution of all customers’ orders, including but not limited to:<ul>
<li>Unit Price</li>
<li>Execution-related costs</li>
<li>Speed of execution</li>
<li>Probability of full order fulfillment</li>
<li>Order size</li>
<li>Nature of the access to the applicable brokers and execution venues</li>
<li>Any other relevant characteristics of the investment product</li>
<li>Potential conflicts of interest</li>
</ul>What constitutes an Acceptable Tolerance Threshold (ATT)?A Shortfall/Excess Discrepancy will, in respect of a portfolio, fall within the ATT where it meets both criteria below:(a) The absolute value of the Shortfall/Excess Discrepancy is not more than USD 0.01 (or its equivalent in AED); and(b) The absolute value of the Shortfall/Excess Discrepancy, when taken as a percentage of the value of the relevant portfolio's contribution in the Bulk Settlement under which the Shortfall/Excess Discrepancy arose, is not more than 0.0001%.More details can be found in our Order Execution Policy <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/order-execution-policy.pdf">here</a>.

How does StashAway execute my orders?

When investing as an individual, there are minimum trade sizes and high transaction costs imposed on the account, and this makes investing as an individual cost-prohibitive. With StashAway, you will benefit from the constant monitoring, rebalancing, and re-optimisation that we provide. Moreover, StashAway is able to offer fractional shares to make your portfolio more precisely allocated that is nearly impossible if you were to do it on your own.<div class="VideoPlayer__PlayerWrap-sc-1x47tsz-0 eiwVtK"><div style="width:100%;height:100%"></div></div>Learn more: <a target="_self" rel="" class="styles__ATag-sc-13s6wwe-0 iKPPDk" href="https://www.stashaway.ae/r/who-should-manage-your-investments">Who Should Manage Your Investments?</a>

Why shouldn't I just invest in the ETFs you have chosen on my own?

An ETF, or an exchange-traded fund, is an index-tracking investment vehicle listed on a major exchange. Indices are composed of asset classes, such as stocks or bonds, in a particular segment of the market, such as technology, energy, or real estate. ETFs are funds that are traded like stocks, but have the diversified portfolio structures of a mutual fund. ETFs provide passive exposure to any asset class by mirroring the returns of an index. For example, the SPDR SPY S&amp;P 500 is an ETF that tracks the performance of the S&amp;P 500.ETFs offer diversification, higher liquidity than individual securities, and lower fees.

What is an ETF?

Money-weighted Return (MWR) assigns a weight to each of your deposits and withdrawals. So, a deposit of $1,000 has a lesser effect on your portfolio’s return figure than a deposit of $100,000. This approach helps to gauge the effectiveness of the individual’s timing of deposits and withdrawals. As a result, MWR may also overweight or underweight the returns you see as a result of factors unrelated to the performance of the portfolio manager and their investment strategy. It will potentially inflate your returns when you deposit while markets are going up and understate your performance when you deposit while markets are going down. It will also give your lump sum deposit performance a larger weighting when calculating the money-weighted return.So, unless your portfolio manager determines when to deposit or withdraw funds from your portfolio, MWR doesn’t effectively measure your portfolio manager’s performance. You should only use MWR to compare two different portfolios if you have the exact same deposit and withdrawal behaviors for both portfolios.MWR’s merit lies in that it clarifies the impact of the individual investor’s investment decisions (e.g., when you deposit and withdraw).

What is Money-weighted Return?

This is the measurement we use to determine how much risk our system should expose you to, which then determines your portfolio’s asset allocation. We gave it our own name not to be fancy, but because it’s a specific application of a fairly common risk metric called Value-at-Risk (VaR).To calculate the potential loss of a portfolio in a year, we use Value-at-Risk (VaR). At StashAway, we use 99%-VaR, meaning a portfolio has a 99% probability of not losing more than a given percentage of assets in a year.Here’s an example: a StashAway portfolio with $100,000 and a StashAway Risk Index of 10% has a 99% probability of not losing more than 10%, or $10,000 in a year. In other words, there is a 99% probability that your portfolio’s value won’t decrease below $90,000 if you select a 10% StashAway Risk Index.<div class="VideoPlayer__PlayerWrap-sc-1x47tsz-0 eiwVtK"><div style="width:100%;height:100%"></div></div>

What is the StashAway Risk Index?

To find out about your returns, you can log into your StashAway account. Select "Investments", click on the "Performance" tab. The "Performance" tab will show you the breakdown of your returns in USD and AED.

How much have I earned from the funds I have invested so far?

Cryptocurrencies are extremely volatile and therefore, not appropriate for a passive investment platform such as StashAway.

Why don't you invest in cryptocurrencies?

Based on your risk preferences, selected goal, and current economic regime, our algorithm carefully picks the ETFs most suitable for your goal. This allows us to provide the most optimal diversification personalised to you. As such, it is not possible for a customer to handpick the ETFs or the allocation.

Can I choose which ETFs or securities I invest in?

The risk-adjusted return of an investment is the risk involved or required to generate that level of return.If two investments have the same level of return, then the lowest risk investment will have better risk-adjusted returns.

What is risk-adjusted return?

Not at the moment. However, we do have joint accounts in the pipeline.In the event of death of the account holder, your executor/administrator or legal heir will have to produce a Succession Certificate issued by the UAE courts before the account can be liquidated to a designated account as instructed by him/ her.

Can I add a beneficiary to each goal in case anything happens to me?

Yes for General Investing and Goal-based portfolio; all currencies are converted into USD to be invested as USD.AED to USD conversion is done at the spot rate and the only cost associated is the currency conversion fee, which is charged by our vendor, at 0.08% on top of the spot rate. This preferential rate, which StashAway has negotiated with the bank, compares favorably against the significantly higher currency conversion fees charged by commercial / retail banks (can easily be in excess of 1% depending on transaction size).

Are all currencies invested in USD?

Absolutely!For Web App users:Simply log in to your Account &gt; "Investments" &gt; "More option" tab &gt; click on "Edit portfolio".Make changes to the portfolio as you wish by moving the slider and finally, click on "Confirm" to update the portfolio.For Mobile App users: Simply log in to your Account, select "Your portfolios" &gt; click to the 3 dots on your top right screen and select "Adjust risk".Make changes to the portfolio as you wish by moving the slider and finally, click on "Confirm" to update the portfolio.

Can I change my investment plan later?

Your TWR is negative because your portfolio’s return has decreased in value since your first deposit.Here’s an example of when this might be the case:Let’s say you deposited $100 to start your StashAway account in January and the market goes down 10% by September. You’ve lost $10 (out of $100 invested) in your portfolio and you’re down to $90. You then have an unexpected windfall (lucky you!) and decide to make an $1,000 deposit in September. By December, the market goes up 5% after the second tranche of investment.<figure class="ImageWithDescription__Figure-tvsb3c-0 bJeOQK"><img src="https://images.ctfassets.net/rscarh2t43r9/1yJcOhIKOSZxJAOYZQJKMQ/a4b6cea98618634c91c75428177906f0/Screenshot_2020-11-06_at_3.49.14_PM.png" alt="Negative time-weighted return FAQ" class="ImageWithDescription__StyledImage-tvsb3c-1 kGrIiF"></figure>What are my returns like now? Well, you would have positive dollar gains because you just gained about $44.50 on a total of $1,100 invested.But this wasn’t because the portfolio has performed exceptionally thus far: it went down 10% then up just 5%. However, most of your money was invested right before markets went up.The time-weighted return is negative because the first deposit of the investment performed poorly between January and December, but your simple dollar return is still positive because of when you made your deposits.

Why do I have a negative time-weighted return, but positive dollar return?

Inside a portfolio, you can only adjust the composition of your portfolio for a goal by adjusting the recommended risk/return target level. You cannot change the individual ETFs inside a portfolio because our algorithms select them and design the portfolio allocation based on your risk preferences.

Can I change the portfolio composition or the asset allocation within my portfolio?

Questions about our portfolios and investment framework

Investments

What does it mean to be a Professional Client?

Professional Clients

General questions about how StashAway works

General Questions

Frequently asked questions about opening an account and the app

Getting Started

Questions about our General Investing and Goal-based portfolios

General & Goal-based Investing

Questions about our cash management portfolio

StashAway Simple™

Fees

Questions relating to capital gains and dividend taxes on your portfolios