When it comes to getting started with investing, it can be difficult to know where to start, especially if you are a young adult or recent graduate just entering the job market.
However, investing as early as possible is incredibly beneficial. You have time and compound interest on your side, and you can focus on developing good financial habits and generating wealth.
I’ve always been a fan of DIY investing, and I stick most of my spare income in a variety of Vanguard ETFs¹.
Now, while this is my preferred strategy, improving technology has also lead to the introduction of many different investment apps, robo advisors, and ways people can begin to invest their money.
One of the newest players in the industry is Emperor Investments, and after learning more about the services they offer, it really seems like they are looking to shake up the robo advisor industry and to open the doors for beginner investors to dabble in the world of stocks!
Time to take a deeper look at Emperor Investments and what they are all about!
This post is sponsored by Emperor Investments but all opinions and thoughts are my own. I am not a certified financial planner and my opinions should not be interpreted as direct financial advice.
What Is Emperor Investments?
Emperor Investments is a Toronto-based robo advisor platform that allows U.S. investors to create a personalized, equity-based portfolio that is backed by research, technology, and professional experience.
Note: Emperor Investments only currently serves U.S. investors!
Emperor Investments was founded in 2011 by Brenna Casserly and Francis Tapon, although the company officially launched in July of 2018.
Here’s what CEO Brenna Casserly said in a statement regarding the mission behind Emperor Investments:
“Unless you have over $250,000 in assets, the only options available to you if you want to invest in the stock market are funds or robo advisors that buy funds. I believe that the rich aren’t the only people who should have access to truly customized, pure stock portfolios. I founded Emperor Investments with my co-founder Francis because I wanted to democratize access to the stock market for the people who need it the most; that’s why we exist.” – Brenna Casserly, CEO of Emperor Investments.
As you can tell, Emperor Investments is definitely on a mission to make pure equity investing more accessible to the average investor.
Equity-Based Portfolios – The Emperor Investments Difference:
When you invest money with pretty much any robo advisor on the market, you are generally investing in index-based ETFs that are designed to remain low-cost while also matching your goals and levels of risk aversion.
When you invest your money with Emperor Investments, you are building a portfolio exclusively made up of pure stock.
No mutual funds², bonds, or ETFs.
Additionally, Emperor Investments also takes a mixed approach to their portfolio creation and management and are a combination of active and passive.
Many popular robo advisors are almost fully passive and use a buy-and-hold strategy on various funds to get the job done. In contrast, more hands-on traders may buy individual securities or attempt to time the market³ to catch a lucrative buying/selling period.
Emperor Investments integrates both active and passive investing into their philosophy, and it all begins with how they create portfolios.
Technology & Investing Philosophy:
So, how does Emperor Investments approach an equity-based portfolio strategy in an industry saturated by fund-based robo advisors?
Well, Emperor Investments utilizes a proprietary technology to help narrow down the universe of U.S. stocks to build a personalized portfolio for any investor. You can read more about the technology in their whitepaper if you are interested in the data side of things.
The algorithm focuses on finding companies that:
- Have paid uninterrupted dividends for a long time.
- Are likely to keep paying dividends.
- Are fairly priced.
Most of the companies are part of the S&P 500¹¹, which isn’t surprising when you consider the dividend time requirements of the algorithm.
Emperor Investments also considers some smaller cap stock options according to a phone call I had with their team, but these stocks would likely have to be fairly undervalued to be considered. For all intents and purposes, the companies are almost all S&P 500.
Once the list of stocks has been trimmed by their tech, members of the Emperor Investments team conduct their own analysis and further narrow down the pool of stocks they consider quality. Their pool of stocks is re-evaluated using this process every quarter.
When you sign up for an Emperor account, they will tailor-make a portfolio with stocks from this pool. Their technology considers your investing preferences and the current value of the stock when optimizing your portfolio.
One interesting element to note is that Emperor Investments doesn’t include banks in their portfolio construction.
Once this active stage of the portfolio construction is finished, management becomes far more passive and new companies are rarely bought or sold.
Emperor Investments Performance vs. Other Robo Advisors:
When comparing robo advisors against one another, there are really two factors that matter: performance and management fees.
Let’s start with their performance. On Emperor’s site, they claim an annualized return of 16.25% from March 2007 – May 2018 (with dividends reinvested).
Now, Emperor Investments wasn’t operational back in 2007, but this figure was reached through what is called ‘paper-trading.’ Essentially, the Emperor Investments team went back in time, applied their algorithm to market data from the given time period, and followed the trail back to present day.
In contrast to the S&P 500, Emperor Investments is looking pretty good. I suppose starting to dabble in equity investing right before/during the 2008 financial crisis had some merit.
In any case, time will tell if Emperor Investment can push such promising returns, but they are certainly doing one thing right and that is buying value through the top companies in the S&P 500.
Alright, what about fees?
Emperor Investments charges a 0.6% annual fee and requires a minimum account balance of $500.
According to their website, this makes Emperor Investments the most affordable robo advisor because they don’t have any hidden fees (since they only buy stocks and don’t have ETFs or mutual funds to worry about):
Now, here’s what I’ll say about the management fees.
According to Morningstar, the average ETF expense ratio was roughly 0.23% in 2016, which is much lower than actively managed mutual funds or index mutual funds.
So, even if you invest with other robo advisors that purchase ETFs, your fees won’t increase that much.
Emperor Investments still seems slightly cheaper than options like Wealthsimple, which charges a 0.50% annual fee (plus about 0.20% from their ETFs), and the fee structure is fairly similar to something like Betterment when you factor in everything.
Point is: pricing isn’t the differentiating factor here, in my opinion.
The differentiating factor is that you are investing in a pure stock portfolio and are looking to out-perform the S&P 500 with Emperor Investments.
If you are interested in opening an account with Emperor Investments, however, you can use my link to receive the first 6 months of management for free!
Other Features & Benefits:
If you invest with Emperor, you gain access to a few nifty tools and features.
Automatic Rebalancing¹²: After Emperor Investments actively builds your portfolio, they switch to a mostly passive system that doesn’t do a lot of rebalancing. If a company stops paying dividends or does something to fall below algorithm filters, the stock can be dropped from the portfolio. Rebalancing otherwise occurs once per year.
Portfolios can also be rebalanced if a particular holding rises to 30% or more of the target weight for that holding. For example, if one holding was supposed to be weighted at 5%, rebalancing would occur if the holding increased to above 6.5% of the portfolio.
Goal-Based, Personalized Investing: You’re free to invest to suit your goals and levels of risk aversion with Emperor. Set a goal target, time horizon, risk level, and if you want dividends to be reinvested into your portfolio.
Multiple Account Types: Individual, IRA, Roth IRA, Rollover IRA, and joint accounts are all possible.
Low Account Minimum: You can get started with as little as $500, which isn’t the case with many robo advisors (many robo advisors also have worse fees for small accounts).
Dividend Payments: Invest in high quality companies that have historically paid dividends and aren’t showing any signs of stopping.
Who Should Use Emperor + Final Thoughts:
At the end of the day, Emperor Investments is trying to shake up the robo advisor industry and are doing some pretty cool things.
I’m a big fan of their low account minimums and emphasis on dividend investing, and this platform could certainly speak to a lot of investors who have a craving for equity.
So, if you’re looking for a passive investment option that pays dividends and stays away from the normal funds most robos promote, this could be the right option for you!
However, I just want to reiterate that not every solution is perfect for every investor; there are no cookie-cutter solutions.
If you aren’t that interested in equity-based portfolios, you could look to other platforms for an alternative. Similarly, you could take the route of DIY investing.
Finally, there’s also the option of seeking professional advice from a certified financial planner. I know the internet sometimes ignores this option out of fear of higher management fees, but learning the right financial habits and practices from an expert can be worth it if you are absolutely clueless on where to even begin in terms of your own financial management.
I’m no expert, and you should never invest anything you cannot afford to lose. However, I think that if you aren’t currently investing but are able to, you are leaving a lot of extra income on the table and missing out!
I’m excited to see what the future holds for Emperor Investments and their strategy of equity investing, and I definitely recommend checking out their website at the very least to learn more about what they do!
Again, if you want to invest in pure stock through Emperor, you can signup here to receive 6 months of management for free while supporting This Online World.
Just remember: they only serve U.S. investors!
That’s all there is for this post! I’ll catch you guys in the next one!
 Mutual Funds and Exchange Traded Funds (ETF’s) are sold by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from the Fund Company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
 Active portfolio management, including market timing, can subject longer term investors to potentially higher fees and can have a negative effect on the long-term performance due to the transaction costs of the short-term trading. In addition, there may be potential tax consequences from these strategies. Active portfolio management and market timing may be unsuitable for some investors depending on their specific investment objectives and financial position. Active portfolio management does not guarantee a profit or protect against a loss in a declining market.
 The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market value weighted index with each stock’s weight in the index proportionate to its market value.
 The results of the back-tests shown do not represent the results of actual trading using client assets but were achieved by means of the retroactive application of a model that was designed with the benefit of hindsight and should not be considered indicative of the skill of the adviser. The results may not reflect the impact that any material market or economic factors might have had on the adviser’s use of the back tested model if the model had been used during the period to actually manage client assets. The performance calculations for the back-tested results deducted a management fee of (0.60%) per year. Unless otherwise indicated, data is as of (05/19/2018).
 Rebalancing/Reallocating can entail transaction costs and tax consequences that should be considered when determining a rebalancing/reallocation strategy.
Investment advisory services offered through Emperor Investments, a registered investment adviser.
Tom is a 22 year old recent college graduate from Canada with a passion for side hustling, passive income, and marketing. This Online World is all about providing people with honest ways to make and save more money by using technology. To learn more about Tom, read his About Page!