Unhedged is the Australian fintech designed to outperform the market by using algorithms to trade. We’re making investing easy, transparent and low cost. For the first time ever, you’ll have access to investment strategies that were previously only available for the rich and famous. All done with a super simple mobile app.
Once we have launched you simply:
- Download the Unhedged app.
- Signup & create a demo portfolio. You can select a preset combination of our algo funds or a custom portfolio.
- Fund your account when you are ready to start investing real money.
- That’s it. Your investments are on Autopilot – we’ll take care of the rest.
Unhedged is working towards a beta-launch for Sophisticated Investors in the middle of 2021. Unhedged will launch for Australian Retail Investors (most people) towards the latter part of 2021. If you are not Australian or do not have a PR or Visa we need an Australian address to register you.
Each algorithm has its own set of investments which it moves money into and out of, based on continual monitoring of a set of signals. Check out some of our algos here to find out what the universe of investments are for that particular fund.
To get started, select your portfolio by choosing one of our presets (Low risk, Optimal AI, Equal Weight).
If you want to know more, read about our algorithms. We are super transparent about how the algorithms work, how they invest and their risk/return profiles. If you are participating in our beta-launch for sophisticated investors, you can set up your preset or custom portfolio using the online application form, and make changes by contacting your account manager.
Once our app launches, you will be able to set up or change your portfolio within the mobile app. As you change the composition, the app will display the expected risk and return measures for your selections.
The best way is to get on our waiting list. Every few weeks Peter will write about the markets and the decision the algorithms made. Completely open and transparant.
The account is itself is 100% FREE. We don’t charge commission, transaction or trading fees.
We charge an annual management fee of 0.49% on money invested in algorithms. This will be deducted from your fund holdings (that’s just $49 a year on a $10k balance). Since we trade US stocks there is also a once off FX rate of 11 bps which is highly competitive industry wide.
The best thing is that Unhedged is aligned with your financial goals: We will charge only an overperformance fee when we do better than the benchmark. Whatever is over the benchmark you get charged 20% over that amount and only if our funds continue to perform across a long time period.
With an Unhedged Account, you get an efficient, well-diversified scientifically-backed portfolio actively invested in stocks and bonds. You can switch to automatic rebalancing to keep your portfolio on track (rebalancing is free of course).
The fees are automatically deducted from your investment. There is no need to make any payments.
Our algorithms invest in ETFs and other stocks listed in US equity markets. These include ETFs that invest in stocks, bonds, commodities, and volatility.
Each algorithm has its own universe of stocks it makes investments in on a daily basis. All stocks that make it into your portfolio will be monitored every minute of the trading days. For more information check out the algorithm pages
We use machine learning and AI to combine algorithms in a portfolio. This algorithm can combine algorithms to minimise risk, maximise return or achieve the maximum return for each unit of risk. You can so change your own combination that first your style. Our unique approach creates a very dynamic portfolio so that the portfolio composition responds to changing market conditions (not only the underlying algorithms).
Each algorithm automatically rebalances when the market has moved away from its current target allocation. If your portfolio contains multiple algorithms and you have instructed us to do so, we also rebalance your portfolio between algorithms on a monthly basis.
Our algorithms search and analyse thousands of signals to determine what to do based on changing market conditions.
We do not charge for rebalancing. Free. Nada
Investment risk is the downside volatility that your investments could experience. In the research and development of our algorithms, we are looking for high degrees of stability. We also use a number of measures to evaluate and minimise risk. These include volatility, maximum draw down (peak to trough decline), Sharpe ratio (returns per unit of volatility), Sortino ratio (returns per unit of downside volatility), time stability (continuity of algo performance), correlation and diversification, alignment with the fund’s economic hypothesis, and many more.
Dividend payments are reinvested. Your allocation of dividends will be included in your year-end tax report.
Keeping your investments safe is critical.
That’s why we’ve employed safeguards—including 256-bit encryption and Transport Layer Security (TLS) — to keep your money and personal information safe.
We’ve also appointed external custodians in Australia and the United States to hold the fund’s assets. The custodians are the manager of the assets, but not the beneficial owner. In the unlikely event that Unhedged were to go into liquidation, your money and investments remain safe and secure with our custodians.
Unhedged operates under an Australian Financial Services Licence held by Cache Invest Pty Ltd who provides our fund administration services. Cache Invest is authorised by ASIC to provide general investment advice and unit trust management services.
We understand that trusting your money with a company is not always easy. We want to make this an easy decision for you, and here are some of the things we know are important to you:
- We are authorised by the regulator, ASIC, as a representative under the Australian Financial Services Licence (AFSL – tbc).
- Unhedged does not have any direct access to your money or investments. The Unhedged algorithms will trade your money in a fund structure. All funds are held with a highly rated custodian (Melbourne Securities Corporation Trustees). Even in the unlikely case that Unhedged as a company stops operating the money and investment will be safe with our custodian.
- We are Australian owned and operated. You are welcome to connect with the founder, Peter Bakker on LinkedIn or connect with other team members. We probably have some mutual connections.
- We are incredibly transparent (unlike most fund managers). You can see exactly what stocks and ETFs your money is invested in using our mobile app
If you can beat the market, why launch Unhedged while you could invest your own money and not bother with all this?
We have two answers to this question.
Firstly, we’re on a mission to liberate investment secrets that were once only accessible to super-rich hedge fund customers. We bring the next-generation robo-advisor to everyday investors so you can send your child to a better school, have an earlier retirement or afford that bigger house.
The other reason is simple economics: by helping thousands of investors beat the market, we earn a small slice of a much bigger pie
You can switch your investments into cash at any time. If you are participating in our beta-launch for sophisticated investors, simply contact your account manager and allow 1 business day for processing. With our app, you can adjust your cash percentage instantly using the mobile app. It will take one business day to take effect.
It is important to highlight though, that when markets are volatile and your investments are not performing well, the human instinct to seek safety. This might mean reducing your investment exposure. Investors often make the wrong decision at these times – they sell when prices are low rather than benefiting from the cheap stocks. Our algorithms don’t experience fear or herd mentality. They analyse the market conditions, evaluate history and determine scientifically whether it makes sense to take on more or less risk.
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Following the tax year-end (June in Australia), we will provide you with a detailed tax report reporting the dividend income, capital gains, franking credits, and capital associated with the units held over the full year. If you need intermediate documents for other tax jurisdictions we will try our best to help you, just send us a message.
Currently Unhedged supports accounts held by Sophisticated Investors, identified by an accountants’ certificate. This includes individual, trust and SMSF accounts held by Sophisticated Investors. We may be able to accept funds from overseas investors – please contact us at [email protected].
We are working hard on our Retail Investor launch when Unhedged will be available to every Australian. We plan to launch by Q3 of 2021 and we urge you to sign up for the waiting list.
Yes we can but the signup procedure will be a bit different, as we will have to check a bit more paperwork for the Australian Regulator. Contact [email protected] and we will guide you through the procedure
Withdrawing money is simple with our mobile app (once live). If you are participating in our beta-program for sophisticated investors, you can withdraw money by contacting your account manager. There no costs for withdrawing and depending on the speed of the banking system it will take between 3 and 7 days to transfer your money to your account. This account must be the same account with which you funded your Unhedged account
That is not allowed *Grin*.
Of course, you can cancel at any time for any reason. Just withdraw your money and delete the app. If you want your account deleted completely, contact the support desk. We are obliged to keep some records for tax and compliance reasons. There are no penalties for closing your account. We will be sad though.
Difficult question as one would think that the Nobel prize doesn’t get extended to idiots! True, the Modern Portfolio Theory was an important discovery and it is frequently used by simple robo-advisors and Financial advisors. As a shortcut, the theory says that you cannot outperform the market without taking more risk and that given a unit of risk there is a maximum return you can accomplish. We compare it with throwing oil on a wild sea: the waves will mellow but they are still there. The theory has a few assumptions that are not true in the real markets and those assumptions were needed to make the theory work mathematically. That often happens with theories. Just because this theory has won a Nobel prize and is actively used, doesn’t mean its as strong as a Natural Law: it is not.
The fact that Quant hedge funds exist and some are very successful creating return with lower risk, means that there is more going on. There are exceptions to this theory and algorithmic investing can be a good way to find the exceptions (also called Alpha)
At Unhedged we create algorithms that are good at finding exceptions. They all are switching risk-on and risk-off with a different economic hypothesis and therefor they all behave differently. They are not all wrong or all right at the same time, but by combining the algorithms we create a stable strategy.
We work with direct debits. So you will give the account your want to deduct your investment from and we will send the order to your bank. After a few days the monies are invested and start to work for you
As we are working with Direct Debit we can also process monthly payments. This is the best way to invest: you are “dollar-cost-averaging” and you can’t forget!