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Robo-advisors were able to deliver stable returns over a year when Korean markets fell more than 10 percent, showing off their skills in a bearish market, an investment performance report showed.

According to Koscom Corp., Seoul-based IT system developer and operator for financial investment industry, on Tuesday, 35 financial products designed and run by robo-advisors managed to outdo overall stock performance in August and over a year.

Products that invested in stocks in “safe” category delivered an average return rate of 0.10 percent and in less risky (or neutral) category -0.51 percent, and the high risk stocks -1.18 percent in August. Kospi last month fell 2.80 percent, Kospi 200 2.76 percent, and Kosdaq 3.11 percent.

Robo-advisor is a digital platform that provides automated, algorithm-based financial planning services. It has been rapidly adopted by wealth managers, with some already offered in the market while more are getting ready for market release. The investment made by robo-advisors ranges from stocks to equity-linked securities (ELS) and derivatives-linked securities (DLS), but not large-scale debts and alternative investment types.

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Local stock markets have stayed lackluster throughout this year amid growing market uncertainties at home and abroad.

The main Kospi plunged 15.29 percent on year as of August, while the Kospi200 tracking the 200 largest-cap stocks lost 13.69 percent. The tech-savvy Kosdaq tumbled 25.27 percent over the same period.

Over a year, investment in “safe” stocks selected by robo-advisors delivered a return of 3.08 percent on average, the neutral investment 0.82 percent, and high risk type -1.64 percent.

Koscom added robo-advisors can make more sane investment than humans in volatile market conditions.

Investment products designed by robo-advisors but managed by humans did better with neutral stocks with a return rate averaging 1.52 percent in August, while scoring negative 2.48 percent in high risk stocks.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]