Mario Tama/Getty Images

  • The investing app Titan promises to provide a low-cost service that lets ordinary traders invest like a hedge-fund client.
  • Titan requires users to deposit at least $500 to gain access to its research and other functions, and charges a 1% annual advisory fee.
  • After users open an account and deposit money, Titan automatically invests their capital in a basket of 20 stocks.
  • In an effort to reduce risk, Titan uses a portion of its users’ capitals to bet against the benchmark S&P 500 index when markets are in a downturn.

The investing app Titan promises to let ordinary traders invest like a hedge-fund client.

After users open an account on Titan’s mobile app and deposit money, the company automatically invests their capital in a basket of 20 stocks. These stocks are based on the most-popular positions at a group of around 175 hedge funds, based on their 13F filings. The basket is then updated once a quarter.

And just like some hedge funds, the app doesn’t only go long stocks. It has a hedging function that uses a portion of its clients’ capital to bet against the benchmark S&P 500 during downturns, like during the stock-market weakness at the end of last year.

According to Titan’s website, its strategy was down 7.5% from launch in February 2018 through the end of the year, versus a 6.1% drop in the S&P 500. Through the first two months of 2019, Titan’s portfolio is up 15.7%, versus an 11.5% increase in the S&P 500.

The app personalizes the percentage of the portfolio that is hedged, based on the investing style derived from questions it asks users about their risk tolerance. For example, a conservative portfolio has 20% of its value hedged, and an aggressive one has 5%.

Titan requires users to deposit at least $500 to gain access to its research and other services. It charges a 1% annual advisory fee, but no performance fee. By comparison, many passive exchange-traded funds in the US charge 0.04% or even no annual management fee, while hedge funds have historically charged a 2% management fee plus around 20% of the annual profit.

Business Insider took Titan’s fund-management offering for a spin to see how it works:


The initial application is limited to mobile users. When you click the “join in” button on their website, they direct you to download the app.

Ethel Jiang/Markets Insider


You’ll then be asked a handful of standard questions that any brokerage is required by law to ask of a potential customer in order to verify your identity.

Ethel Jiang/Markets Insider


Titan asks about your income, net assets, investing experience, and very importantly your investing style, which can be conservative, moderate, or aggressive.

Ethel Jiang/Markets Insider


After answering all personal and financial information, Titan asks you to deposit at least $500 before approving your account.

Ethel Jiang/Markets Insider

Titan has no lock-up period, and investors can withdraw their money at any time.

The $500 minimum fee is a prerequisite to gain access to Titan’s research, fund management, networking events, and other services, co-founder Clayton Gardner told Business Insider.


Once Titan approves your account, you become their client and automatically invest your capital into a portfolio that Titan designs.

Ethel Jiang/Markets Insider


Here’s what a user’s portfolio looks like.

Ethel Jiang/Markets Insider

The portfolio – a basket of 20 stocks – is the same for every Titan user and is updated once a quarter.

As you can see, the hedge function is off right now since markets are not in a downturn. When markets face extended selloffs, Titan will start to use a portion of the portfolio’s money to bet against the benchmark S&P 500 index to reduce market exposure.


You can change your investing style to customize your portfolio’s hedge level.

Ethel Jiang/Markets Insider

Titan personalizes users’ hedge percentage based on the investing style derived from the questions they answer when signing up.

  • Conservative = 20% of portfolio value is hedged
  • Moderate = 10% of portfolio value is hedged
  • Aggressive = 5% of portfolio value is hedged

Users can change their investing style once a month.


Here’s the performance of Titan’s portfolio.

Ethel Jiang/Markets Insider

On the left, you can see the performance of my portfolio.

On the right is the performance of all investment portfolios on Titan. Its fund has outperformed the S&P 500 so far this year. Last year, it underperformed the benchmark.


Starting a portfolio gives you access to Titan’s equity-research library.

Ethel Jiang/Markets Insider

Titan is like a “smart money manager in the pocket,” co-founder Clayton Gardner said, adding that its users can browse equity-research reports in a very mobile-friendly way.

All the research reports are produced by Titan’s own team.

Titan has thousands of clients, mostly mid-career professionals ranging from 30-35 years old. It had $20 million under management as of October 2018, according to Gardner.


Read More

LEAVE A REPLY

Please enter your comment!
Please enter your name here