Using advanced advanced algorithm tools, which are usually accessible only to wealthy and experienced wholesale investors, Australian robo-investing app Unhedged has officially launched to retail customers.
Traditional robo-advisors use humans to make investment decisions; Unhedged is unique as it adds data points instantly, as the trading day progresses; these algorithms mean there's no human bias.
At the heart of Unhedged is the mission to allow every day investors to get a piece of the investment action, as a minimum of just $100 is needed to get started.
Peter Bakker, co-founder and CEO of Unhedged is a highly regarded algorithm builder and serial entrepreneur. He believes the current system is unfairly skewed towards wealthy people.
“Our mission is to create equal wealth opportunities for everyone. Both the wealthy and non-wealthy should have access to the same sophisticated investment products” Peter says.
Peter, along with co-founders Glenn Vanbavinckhove and Saskia Albers – who’ve worked for hedge funds, investment banks and top tier consultants – were inspired to create Unhedged, knowing everyday investors are usually so disadvantaged.
“The younger generations are having great difficulty buying a home. It’s hard for them to get the same opportunities their parents might have had. Now there’s a real fear of not being able to get ahead. And I believe that’s a space where we can help people of all walks of life to invest because our app is very simple to use,” Peter says.
“There is no strategy required as our algorithms take care of the decision making for you. The fear of not getting ahead and lagging compared to other generations is hopefully one we can help with.”
Peter has spent more than 10 years working in statistics and building algorithms to trade in overseas financial markets.
“With my own investments, I realized two-three percent of my money was going to management fees. And I knew if I switched to another account, I’d just create more costs again,” Peter says.
“So, we are being very transparent by letting people play with the app before they invest. And we believe our service desk will be the best in the industry. Our staff are trained to a very high level; the more trained our people are, the more transparent we are.”
Unhedged lets people use “play money” in demo-mode so they can see exactly what happens when they invest.
Unhedged co-founder and COO, Saskia Albers says the biggest downside of traditional trading platforms is that it’s very difficult to get good returns. What a trading platform doesn’t do well, is help you with a strategy.
“Those platforms don’t help you think about what you should actually invest in. Our algorithms actually do that for you. They make the trading decisions instantly and based on millions of data points,” Saskia says.
“So, Unhedged has two main things you need in order to invest; an easy, accessible platform with low fees. And a good strategy that helps you invest wisely. Both of these factors are essential for people to start investing, and Unhedged does both.”
While the minimum amount you can invest is $100, you can add funds and withdraw funds, whenever you choose.
“And there are no transaction fees on top of that. The only two fees include an Asset Management fee and the Pay for Success fee. So, only as your portfolio grows, and we beat the benchmark, Unhedged gets rewarded. Makes sense to align incentives. And this is very easy for people to understand,” Saskia says.
Unhedged is designed to make investing easy and our quantitative analysts are continuously working to improve the AI to create new strategies and add more diversified markets. The algorithms are based on rigorous academic research and have proven to be highly reliable in backtesting.
“Our proprietary algorithms are literally scanning the market every second for opportunities,” Saskia says.
Unhedged attracted big-name investors, including Zip investors Alvin Singh and Bosco Tan, as well as previous Commbank MD, and Hearts and Minds Investments CEO, Paul Rayson.
Nearly 8,000 people were on a waiting list for Unhedged; 30 percent of the waitlist consisted of women. According to Saskia, this is both promising and unusual because women are typically more cautious about investment than men.
“I’m keen to see women getting actively involved in the app. For so many women, apart from their income and their superannuation, they don’t use many other pathways to wealth creation. Unhedged is positioned to give them another option.”
“Algorithmic investing is a smarter way to invest and it’s where the market is going forward. We are very excited to launch because there are so many people eager to start using it right away.”