Hedge fund investing is typically a service that is outside the reach of the average investor. Ultra-high net worth individuals are the primary target for traditional hedge funds. Titan Invest aims to change that.
The investment team at Titan is made up of experienced Wall Street professionals that bring active portfolio management to virtually anyone in the United States. So, is Titan Invest the right partner to execute your investment strategy?
Read our Titan Invest review to find out!
What is Titan Invest?
Titan Invest brings a hedge fund experience to all types of investors. Clayton Gardner, Max Bernardy, and Joe Percoco are the founders of the platform.
The CEO of Titan Invest is Gardner, who has experience as a financial analyst for a hedge fund. He brings a team of advisors, traders, and analysts to manage investment portfolios.
The goal of Titan Invest is to enable anyone to get an upper hand in the stock market, regardless of their status (i.e., non-accredited investors).
The company calls itself a private fund which means that they use a “rigorous investment process that blends old school and new to identify high-quality businesses that can compound your capital at a high rate of return for the long run,” according to them.
In actuality, they are an SEC-registered investment advisor that works similar to robo-advising. Actual trades are handled by real people.
What are Hedge Funds
Investing in hedge funds generally requires that you have at least a few hundred thousand dollars to invest. You also have to be an accredited investor in most cases.
Hedge funds tend to charge higher fees and a percentage of profits. That makes the traditional hedge fund out of consideration for most individuals.
What does Titan Invest Offer?
Titan Strategies
Titan Invest offers four different investment strategies for investors. They are its “Flagship,” “Opportunities,” “Offshore,” and “Crypto” investment strategies that are explained below.
Flagship
The Titan Flagship portfolio is its U.S. large-cap growth strategy. High-quality companies that are known to compound capital at a rate that’s greater than the S&P 500 are the focus. This investment strategy may include Netflix and Disney. Lesser-known companies that might be included in this strategy are Twilio and Transdigm.
- Stocks: 15-25
- Average Market Cap: $645B
- Annualized Return: 14.0%
Opportunities
The Opportunities portfolio focuses on finding smaller U.S companies that Titan believes have the potential to grow significantly to become the next big stars. NextGen Energy, Fastly, and Farfetch are among the companies found in this portfolio.
- Stocks: 15-25
- Average Market Cap: $22B
- Annualized Return: 25.0%
Offshore
Tian’s Offshore portfolio is its international all-cap strategy. It focuses on finding the best businesses in emerging and developed markets around the world.
- Stocks: 15-25
- Average Market Cap: $150B
- Annualized Return: -29.9%
Crypto
Titan Crypto has actively managed crypto assets that Titan Invest pros believe are positioned for exceptional long-term returns.
- Coins: 5-10
- Average Market Cap: $142B
- Annualized Return: 9.8%
Titan Invest Features
Below are the key features that Titan Invest offers:
Account Type: Taxable, IRA
Annual Fees:
- More than $10,000 in net deposits = 1% AUM per year (assets under management)
- Less $10,000 in net deposits = $5 per month
Performance Fees: None
Minimum Investment: $100
Socially Responsible Investing Options: None
Advisor Access: None
Lock-ups: None
Investor Qualifications: U.S. only
Custody & Clearing: Apex Clearing, Apex Crypto
Legal Counsel: Lowenstein Sandler LP
Compliance: Greyline LLC
SIPC Insurance: Up to $500K
Fees and Terms
The only fee associated with opening up an actively managed fund with Titan Invest is the annual fee. You’ll be charged $5 per month if you have less than $10,000 and a 1% wrap fee for assets over $10,000.
You don’t have to worry about performance fees as you find with a traditional hedge fund. Those fees can be as high as 20%.
Your money can be withdrawn at any time as well. You can open up an IRA or taxable accounts.
If you wish to track your holding, Titan Invest is integrated with Personal Capital.
Security
Whether it is putting your money into robo advisors, mutual funds, or simply a bank account, security is important. Your investment accounts with Titan are covered by Securities Investor Protection Corporation (SIPC) insurance for up to $500,000.
What this provides is protection from losses due to reasons other than general losses in the stock market. That should provide you with the peace of mind that you’re covered from hacks and other fraudulent activities.
Titan accounts are held and cleared with APEX Clearing. Among the biggest financial technology companies in the world, APEX has a track record of safely clearing stock market transactions.
All your information found on Titan Invest’s website has multiple layers of security. An SSL connection with 256-bit encryption and a firewall help ensure your data is safe.
How does a Titan Invest Account work?
Similar to robo advisors, Titan Invest uses software to analyze the activities of big hedge funds. Titan attempts to follow the same holdings that hedge funds are putting in long-term investments.
Each of the actively managed portfolios look at individual stocks that meet specific criteria. This includes a wide moat, strong cash generation, high returns on capital, attractive growth prospects, and great management.
Each investment portfolio has about 20 stocks. Each quarter, the actively managed investment portfolios are re-adjusted.
That means some stocks are removed, while others are added.
Based on your risk tolerance, Titan uses a hedge fund-like strategy of shorting the market between 0% and 20%. This hedging strategy is based on the goal of minimizing drawdowns if the market drops.
The result is that the short position should increase in value if the market goes down, which will offset the portfolio’s decline.
You can track your actively managed portfolio by using the Titan Invest mobile app.
Who is a Titan Invest Account best for?
The type of investor that may benefit from Titan Invest is one that’s interested in leveraging an active management strategy. You must have a high risk tolerance since Titan investments are high stakes, high rewards.
Investors must plan to keep their investments for a longer time horizon as well. Investments with Titan Invest should remain for at least 3 years.
You should not invest with Titan Invest if you want access to a financial advisor, planning services, or looking for shorter and safer investments.
Titan Invest Competitors
Titan Invest is competing with primarily robo advising services and the traditional financial institution that offers investments. But below are the key competitors that offer the most similar experience below.
Betterment
Betterment offers a slew of investment options, including automated investing (robo), IRAs, 401K, portfolio options, crypto, and socially responsible investing. They also offer financial experts for an additional cost if you want more guidance.
There’s no minimum balance required, and the annual fee for digital investing is 0.25%. If you wish to get advice from Betterment’s team of CFP professionals and other benefits, the annual fee increases to 0.40%. You must also have a minimum balance of $100k.
You can also sign up for Betterment’s no-fee checking account, which comes with a Visa debit card. ATM fees are reimbursed worldwide. Checking accounts also come with FDIC insurance for up to $250K.
M1 Finance
M1 Finance is a mix of robo advising and a broker. It allows you to invest on your own or automate the whole process. There’s a basic cash management account that comes with it too.
It offers pre-selected portfolios, or you can build your own.
To open a taxable account, you’ll need at least $100. That increases to $500 for retirement accounts. There are no trading or commission fees.
However, if you have no activity in your account for over 90 days, you’ll pay an inactivity fee for amounts less than $20. There is also a $100 outgoing account transfer charge and a $100 IRA termination fee. The fund expense ratio averages out to below 0.10 per portfolio.
Titan Invest Pros
Low Account Minimum
Getting access to hedge fund like strategies doesn’t mean you have to have a ton of money. With a minimum investment of $100, just about anyone can open up an account.
Low Cost Actively Managed Funds
Not only does Titan Invest offer a lower account minimum, but they’ve minimized the costs for its actively managed funds. You’ll pay $5 a month if you have less than $10,000 or 1% assets under management for over $10,000.
Can get Crypto Management
Building a portfolio with individual stocks from the stock market isn’t the only choice you have with Titan Invest. Titan Crypto offers a portfolio manager option for individuals interested in crypto.
So if you’re interested in getting into crypto, but find it confusing or don’t want to take an active role, the Titan Crypto portfolio might be up your alley.
Portfolio Management and Strategy
Titan invests your money like a robo advisor, but better. Titan looks at what’s happening in the stock market and tries to outperform the S&P 500. This is an active approach that sharply contrasts with most robo advisors.
It should be noted that titan does buy certain exchange-traded funds (ETFs) to provide diversification. However, actual stocks are the primary investment tools.
Its investment strategy is comprised of its fund offerings: Titan Opportunities, Titan Offshore, and Titan Flagship. You have a personalized hedge regardless of which fund you choose based on your risk tolerance.
Other benefits include that your account is separately managed, money is available to be deposited into your Titan account when you’re ready to invest, you have access to its portfolio managers, and your money can be withdrawn at any time.
Fractional Shares
A low minimum initial investment of $100 is great, but it is tough to find stocks you can afford. Luckily, Titan invest also leverages fractional shares so you can get a piece of a company.
Plus, Titan Invest will reinvest dividends into fractional shares that go towards your original position. Dividends are plowed back into the portfolio each quarter. This feature is one that not every robo advisor offers.
Hedged Investments
Titan invest focuses on using hedges to build portfolios. The investment team uses this practice to offset your losses in market downturns.
Basically, that means it helps you make some money to cushion your portfolio. Titan Invest uses an inverse ETF that rises when the market falls.
There’s an extra cost to this hedging, but the ETF is merely a fraction of the entire portfolio’s value. You can choose how much hedging you want in your portfolio. Here’s a breakdown of Titan’s view on hedging:
- Market is not in a downturn:
- 0% hedged for Aggressive portfolios
- 5% hedged for Moderate portfolios
- 10% hedged for Conservative portolfios
- Market is in a downturn:
- 5% hedged in Aggressive portfolios
- 10% hedged in Moderate portfolios
- 20% hedged in Conservative portfolios
Potentially Beat the Market
While you shouldn’t base your decision to make investment decisions based on robo advisor returns, Titan’s performance is worth noting. Keep in mind that the Titan portfolio offerings are all new.
The Titan Opportunities and Titan Offshore started in 2021. Titan flagship is the oldest offering, at a start date of around 2018.
Here is some data on returns according to its website:
- Titan Flagship (2/20/2018 – 6/30/2021)
- Cumulative Return: 97.1% vs 68.4% on S&P 500
- Annualized Return: 22.4% vs 16.8% on S&P 500
- Titan Opportunities
- Cumulative Return: 66.2% vs 47.1% on Russell 2000
- Annualized Return: 79.5% vs 56.0% on Russell 2000
- Titan Offshore
- Cumulative Return: 1.7% vs 4.3% on MSCI ACWI ex USA
- Annualized Return: 7.3% vs 19.8% on MSCI ACWI ex USA
User-Friendly Mobile App
An investment option that’s similar to that of a robo advisor requires a great digital experience. The Titan Invest app doesn’t disappoint.
You’ll have easy access to your investment accounts on the go. Titan Invest has built an intuitive and user-friendly app that is capable of offering the same functionality as you can on a desktop.
Account Types
You have several choices for account types with Titan. If you simply want to invest, you can hold a taxable brokerage account that allows you to do just that.
If your goal is to build a retirement account, you can open IRA accounts (traditional IRAs and Roth IRAs)
Don’t have to be an Accredited Investor
To have a portfolio strategy like Titan Invest that works similar to a hedge fund is typically for high net worth individuals. But Titan Invest doesn’t exclude the general population from their hedge fund-like service.
The minimum investment amount is only $100. That’s accessible to a much larger audience.
Good Personal Finance Content
Titan’s investing content is called Titan research. It gives you access to thorough research that’s typically very expensive. Their education portal provides valuable information that any personal finance guru would promote.
Titan Invest Cons
Strategies are Risky
Generally speaking, you need to have a high-risk tolerance to invest with Titan. They use strategies that are based on high-risk, high-reward.
There aren’t fixed-income investments or much diversification to offset potential losses. Titan Invest isn’t for investors who are conservative, have a short time horizon, or can’t afford to lose money during market volatility times.
Cost is High Compared to Robo Advisors
Titan Invest doesn’t charge performance fees like hedge funds typically do. But it is still more expensive than what it costs to go with a typical robo advisor.
Higher Account Minimum for certain Portfolios
The account minimum on most of Titan’s accounts, including the Flagship portfolio, is $100. But if you want to invest in the Titan Opportunities portfolio, you will need to maintain a minimum balance of $10,000.
Lacks Professional Financial Advice
If you want to get personalized financial advice, financial planning services, or access to financial advisors, you won’t get it with Titan Invest. These are services that are available through most of its competitors.
Short Track Record
Titan’s investment advisory services are relatively new, with only a few years of history. While they have been able to beat the market in these few years, their performance history is still very limited.
Not Tax Efficient
Unlike many actively managed funds and investment banks, Titan’s investment process lacks tax-loss harvesting.
Lacks Cash Management Account Features
Titan lacks a separate cash management account that you can use, similar to a bank account, to move money over to your Titan account. Robo advisors like Wealthfront and Betterment have better cash management accounts that include features like early direct deposit, fee-free ATMs, and more.
You can have a linked bank account to pull money for investments, so it’s probably not a dealbreaker.
Not ideal for Short-Term or Conservative Investors
The personalized hedge feature allows you to mitigate some risks. But generally speaking, if you plan to retire soon, have a short time horizon, or don’t wish to invest in riskier investments, Titan Invest is not for you.
Limited Customer Service
Getting help with your account is very limited. Titan Invest has a “Help Center” that answers general questions about an account. They have a chat feature, too, which acts more as an email. It takes about a day to get a response.
FAQ: Titan Invest Review
Is Titan Invest affordable?
Titan Invest’s advisory fees are either 1% AUM or $5 per month. This is higher than investment services like the robo advisor, Betterment.
They don’t have performance fees or other costs like the typical hedge fund has, however.
What account types and features does Titan Invest offer?
You can open up a taxable or retirement account with Titan Invest. But you’re limited to a traditional IRA or Roth IRA. It also lacks financial planning services, tax-harvesting, and the ability to speak with a financial advisor.
How is the mobile experience on Titan Invest?
The digital experience that Titan Invest provides is exceptional. It is available on iOS and Android devices. The user reviews, on average, are above 4 stars out of 5.
It’s easy to use for novice users and works seamlessly. Plus, you have the same functionality that you do with the platform when using a desktop.
Does Titan Invest have customer service?
Titan Invest has a help center to answer basic questions about your account. But if you need customer support, your options are limited. There is no phone number to get in touch with customer service.
You’ll need to send them a chat message which is actually an email that takes about a day to receive a response.
Bottom line: Titan Invest
Titan Invest is best for those that wish to get access to an actively managed account that has the potential for high returns. Its digital experience is easy to use and well-designed, so you should have no trouble accessing it on your smartphone. There are less expensive investment options out there, and it does lack some features like tax-loss harvesting. As long as your ok with these trade-offs, Titan Invest could be a good option.
