SMART Portfolio Explained: Why It’s a Game-Changer for Young Investors April 15, 2025

Investing has undergone a transformational shift in recent years. Through the use of technology, we have the option to use robo advisors instead of traditional financial advisors Among these advancements, SMART portfolios have gained significant attention—especially among young investors, who now make up an impressive 40% of market participants.

Technology has considerably simplified and made investing easier for new-age, tech-savvy investors. For example, SMART portfolios, unlike traditional portfolios, adjust to changing market circumstances by modifying the distribution of assets automatically. Let’s explore why young investors are increasingly drawn to this intelligent and hassle-free way of investing.

The Struggles of Adulting and Investing

The thrill of receiving your first paycheck is often accompanied by a sudden realisation; there are bills to pay, expenses to manage, and financial responsibilities to juggle.

Over time, you may discover that simply saving isn’t enough for the long term especially when your expenses increase. You need your money to work for you. But with so many choices, risks, and financial obligations, it can feel overwhelming when it comes to deciding where to invest your money.

Approximately 62% of adults in the USA invested in the stock market in 2024. In comparison, the participation rate stood at 33% in the UK, 7% in China, 15% in Japan, and 6% in India. Despite these differences, investors across all regions face similar challenges when managing finances, and making investment decisions.

Key Financial Struggles of Young Investors

Managing Finances: Between rent, groceries, and everyday expenses, budgeting can feel like a constant battle, and there never seems to be enough money left for investing.

Tackling Debt: Debts, be they student loans, car loans, or mortgages, take up a significant portion of an adult’s finances, making it difficult to sustain themselves.

Career Pressure: In a highly competitive world, young professionals are constantly pressured to perform and flourish, leaving them little time to focus on investing.

Overwhelming Choices: With stocks, mutual funds, gold, real estate, ETFs, and more, choosing where to invest can feel like daunting.

Whether you fear losing your money or have insufficient time to research, inflation diminishes the value of savings the longer you take to invest. This is why robo-advisors are on the rise. They provide algorithmic investing strategies to simplify the investing process while requiring minimal human intervention. The robo-advisory market is predicted to grow to US$70.31 billion by 2032.

What is a Robo-advisor?

A robo advisor is an online investment financial advisor that offers financial advice, or portfolio management with minimal human intervention. These advisors use technology and advanced algorithms to tailor and manage investments on your behalf, aligning to your financial goals, risk tolerance, and preferences.

While charges might vary, robo advisors are often a more reasonable choice than traditional financial advisors. Some platforms even combine digital automation with expert financial guidance, offering the best of both worlds.

Why Are Young Investors Choosing Robo-Advisors?

Tech-savvy investors make up a large portion of active stock market investors today. The key factor behind the evolution and growth of these robo advisors is the demand for digital and automated financial management.

Benefits of Robo Advisors

Robo-advisors offer several advantages over traditional financial advisory services:

Low Costs: Robo-advisory platforms have revolutionised investing by significantly reducing costs. By removing human labour, they provide the same traditional advisory services at a fraction of the cost.
Efficient: Before the advent of robo-advisors and online brokerage accounts, to make a transaction, you’d have to phone or meet with a trading representative , place your trade, and wait for it to be executed. Robo-advisors are efficient in this regard.
Simple to Use and Access: Managing and monitoring your investments is now easier than ever. With 24/7 access to your robo-advisory account, you can check your portfolio from anywhere as long as you have internet connection.
Regular Rebalancing: Over time, an investment portfolio can drift from its intended asset allocation. Robo-advisors automatically rebalance portfolios to ensure they remain aligned with your financial goals.

Robo-advisors combine AI-driven investing strategies with user-friendly platforms, making investing more accessible, cost-effective, and efficient for individuals at any experience level.

What is SMART Portfolio and How Does it Work?

A SMART Portfolio is an investment approach that utilises AI and big data analytics to enhance portfolio creation and management. Unlike traditional portfolios, SMART Portfolios adapt to changing market conditions, optimising asset allocation automatically.

How SMART Portfolio Work

Selecting a Theme: You pick a Smart Portfolio based on your interests and investing objectives. The themes can be industry-specific, region-based, or focused on emerging technologies.

Automating Management: Once you have selected the theme, the platform’s algorithms automatically manage the investments, ensuring optimal diversification and allocation.

Continuous Monitoring: The algorithms regularly analyses the portfolio’s performance and make modifications as required to ensure it remains aligned with your financial and investment objectives.

Long-term Vision: SMART Portfolios are designed with a long-term vision, capitalising on high-growth sectors and trend over time.

Why Choose a SMART Portfolio?

SMART Portfolios combine expert management, diversification, automation, and simplicity. All these make it an appealing alternative for both seasoned and young investors. When you choose a SMART Portfolio, you get access to all these benefits:

Diversification: SMART Portfolios are diversified across several asset types, such as equities, bonds, and commodities. This helps to manage the risk and ensure consistent results over the long run.

Professional Management: SMART Portfolios are curated and managed by investing specialists who employ sophisticated algorithms and data analysis to optimise asset allocation and investment strategies.

Automation and Convenience: SMART Portfolios employ algorithms to rebalance and optimise portfolio, reducing the need for human intervention.

Lower Costs: Compared to traditional financial advisors, SMART Portfolios offer lower costs, making them more affordable to a wider range of investors.

Rebalancing: The combination of technology and data analysis enables SMART Portfolios to continually improve their investment strategies and react to changing market circumstances, assuring optimum performance.

Importance of Starting Early

The earlier you start investing, the greater your long-term financial advantage. Many individuals delay investing due to a lack of knowledge or fear, but starting sooner rather than later delivers considerable benefits:

Power of Compounding: The earlier you start investing, the more time your money has to grow exponentially through compound returns.

Lower Investment Pressure: Early investors can start small, making regular contributions over time instead of relying on large lump sums later.

Higher Risk-Taking Ability: Younger investors can afford to take bigger risks because they have more time to recover from market downturns.

Beating Inflation: Inflation erodes the value of your money over time. Investing early guarantees that your money will rise at a rate that outpaces inflation, keeping your buying power.

Financial Independence at an Early Age: Early investing helps you develop a sizeable fund that you can later use to buy a house, travel, or fund an early retirement.

Conclusion

Investing has never been more accessible, efficient, and data-driven than it is today. SMART Portfolios simplify the investment process, making it easier for young investors to build wealth without needing extensive financial expertise.

By leveraging automation, expert strategies, and AI-powered insights, SMART Portfolios offer a stress-free investment solution—allowing you to focus on your goals while your money works for you.

Start your investing journey today!

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About the author

Debbie Liew
Digital Marketing Executive

Debbie is currently with Phillip Digital Channel, specialising in promoting financial solutions such as Excess Fund Facility (SMART Park), Robo (SMART Portfolio), Finance Fit and Phillip Protect. Passionate about both digital marketing and finance, Debbie is dedicated to creating engaging content that benefits investors.

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