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Round investments review: Invest with world-class fund managers
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Updated: August 02, 2023
3.5
3.5
Commissions and fees3.5
Customer service3.5
Ease of use4
Tools and resources3
Investment options4
Asset allocation4
Round Investments is best for people who want an active portfolio but don’t have the time or expertise to manage one themselves. Round looks a lot like a robo advisor, but instead of using a pre-built portfolio of index funds, it takes an active approach. Portfolios look more like what you would find at a hedge fund than a traditional managed portfolio.
Round Investments is a managed portfolio provider with a focus on active investing. However, it's not really a robo advisor. Unlike the typical robo-investing service, Round creates actively managed portfolios intending to outperform the market. And although it charges a 0.5% annual management fee, payable monthly, you don't pay in months that your portfolio value goes down.
In this Round Investments review, we'll check out this unique service to help you decide if it's a good fit for your portfolio.
Round aims to give you an investment experience previously available only to the ultra-wealthy. But instead of needing tens of millions of dollars to get into a hedge fund or private equity fund, at Round you can start with as little as $500.
Portfolios are actively managed by eight different fund companies, which give Round members exposure to a broad range of asset classes in equities, fixed income and alternatives. Investors get exposure to funds from Guggenheim, DoubleLine, Highland, Gabelli, PIMCO, Brookfield and Aberdeen.
Round Investments features
| Feature | Details |
|---|---|
| Minimum investment | $500 |
| Fees | 0.5% Annually, Payable Only in Months With Positive Returns |
| Accounts | Taxable, Joint, Traditional IRA, Roth IRA, Rollover IRA |
| 401(k) assistance | ❌ |
| Tax loss harvesting | ❌ |
| Portfolio rebalancing | ✅ |
| Automatic deposits | N/A |
| Advice | Human assisted |
| Smart beta | ❌ |
| Socially responsible | ❌ |
| Fractional shares | ✅ |
| Customer service | Phone; Email |
How does Round Investments work?
When you sign up for Round Investments, you get a typical managed portfolio experience. It takes less than 10 minutes to sign up. During the onboarding process, you'll answer questions about your age, assets, investment goals, and risk tolerance. Based on that, Round will create a portfolio for you.
Because it is actively managed, you won't get a fixed portfolio that just sits there. You can also ask the Round team to update your portfolio if you want to tweak how it's put together.
Assets in portfolios include exchange-traded funds (ETFs) and closed-end open-end funds. Unlike robo advisors, Round doesn't use only passive ETFs with rock-bottom pricing. So keep in mind you may pay more in fund fees (in addition to Round's fee) than with passive robo-investing portfolios.
If you ever decide to make a withdrawal, it takes about ten days for Round to settle your sales and deposit funds into your linked bank account.
You can manage your account on the web or with a mobile app for iPhones. There is currently no Android version.
How much does Round Investments cost?
Round charges fees that seem fairly reasonable for an actively managed portfolio. The company charges a 0.5% annual management fee, broken up into monthly charges. The fee applies only in months that your portfolio grows in value. If your portfolio goes down in value, you pay nothing that month.
The underlying ETFs, mutual funds and money market funds in Round accounts are actively managed and charge their own fees. These are higher than the low cost you see with index funds. But again, some investors find them worthwhile because they seek to beat the market and maximize their returns.
How is Round different?
Round Investments is similar to robo-advisors such as Betterment, Acorns, Wealthfront and other digital-first investment platforms when it comes to the initial experience and the amount of involvement required of you. You'll need to answer a questionnaire about your investment goals, history, and risk tolerance, as with the robo-advisors. And you'll also have the ability to “set it and forget it.”
| Highlights | Betterment | Wealthfront | Acorns | Round |
|---|---|---|---|---|
| Rating | 4.5/5 | 4.5/5 | 4/5 | 3.5/5 |
| Minimum to open account | $10 | $500 | $0 | $500 |
| 401(k) assistance | ✅ | ❌ | ❌ | ❌ |
| Two-factor auth. | ✅ | ✅ | ✅ | ❌ |
| Advice options | Automated, Human Assisted | Automated | Automated | Human Assisted |
| Socially responsible investing | ✅ | ✅ | ✅ | ❌ |
| - | SIGN UP | SIGN UP | SIGN UP | - |
However, at Round, your portfolio will include actively managed funds.
Active management costs more, and so does access to a human who can help manage your portfolio. Round charges a bit more than the field of robo-advisors. Round's pricing and service are most similar to Betterment's top-tier plan, which gives you a human investment advisor and costs 0.4% per year. But again, the underlying assets are different.
There are many advocates for active funds that may be able to outperform indexing. Round offers unique diversification most investors can't find anywhere else. After all, the firm is very confident in its ability to turn a profit.
Plus, unlike the robos, you pay an investment fee only in months that your portfolio earns a profit.
Summary
Round is an investment service that brings regular people an experience that is often held for only very wealthy investors. Through actively managed portfolios, Round Investments aims to beat the market and the typical robo-advisor experience. The fee is a little higher than you'll find with most robo-advisors, but Round waives the cost in months that your portfolio doesn't grow in value.
If you are looking for an actively managed investment experience where you can explain what you want, fund your account, and otherwise keep your hands off, Round Investments is designed specifically for you.
Eric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time.
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