Titan Review: Active Portfolio Management for Everyday Investors
If you've ever thought that you can't afford access to investment experts, this article is for you.
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If you are under the impression that you can’t afford expert assistance managing your investment portfolio—a platform by the name of Titan is aiming to change that perception.
Titan is an award-winning capital management firm that aims to outperform the market and double investors’ money every 5-7 years. While some investments, including many ETFs and index funds, track the market rather than attempting to beat it, Titan takes a different approach.
With an experienced team of professionals, Titan actively manages a portfolio of stocks and cryptocurrencies. This type of active investment management historically hasn’t been available to everyday investors, but Titan is changing that.
Titan was founded in 2018, and in just a few short years has achieved some impressive results:
- Titan has grown to $750 million AUM and more than 35,000 clients.
- In 2020, US News ranked Titan as the #1 robo advisor
- Titan was included on the Forbes’ Next Billion-Dollar Startups list in 2021.
- Titan has raised $75 to date from premier venture capital firms Andreessen Horowitz, General Catalyst, Sound Ventures, and BoxGroup, as well as celebrities like Will Smith, Odell Beckham Jr., Kevin Durant, and Jared Leto.
The company’s co-founders Clay Gardner, Joe Percoco, and Max Bernady have extensive experience with hedge funds and bring some of the same strategies and principles to Titan.
However, unlike hedge funds, Titan charges no performance fees and is accessible to everyone—not just accredited investors and the ultra wealthy. They’ve set out to level the playing field and give the average investor access to premier portfolio management.
In addition to growing wealth for investors, Titan also aims to provide education. They accomplish this through extensive commentary on the decisions they make regarding the funds’ holdings, and also through discussion or relevant news that impacts the industry.
Titan is not a one-size-fits-all solution. They offer four different managed investment products or strategies. When you create your account and begin the investment process, the Titan mobile app will ask you some questions about your own situation, goals, and risk tolerance. You’ll be presented with a suggested mix of these four different strategies, but you have the freedom to adjust and customize the balance however you see it.
The strategies offered by Titan include:
- Flagship. Invests in large-cap US growth stocks, including big-name companies that Titan believes can outperform the S&P 500.
- Opportunities. Small/mid-cap US growth strategy that invests in up-and-coming companies that Titan believes will grow at an exceptional rate. The Opportunities strategy is higher-risk than Flagship, but also offers higher upside.
- Offshore. Invests in emerging and developed markets around the world.
- Crypto. A portfolio of crypto assets that Titan believes are positioned for excellent long-term returns.
The cryptocurrency strategy (launched in August 2021) is especially unique because it’s the first actively managed cryptocurrency portfolio available to everyday investors.
One of the ways that Titan stands out from its competitors is through downside protection for investors. Depending on an investor’s risk tolerance and the chosen strategy, the Titan portfolio may include a hedge, or a bet against the performance of the stock market. The size of the hedge will vary from 0% - 20% depending on risk tolerance and Titan’s view of the risk of an extended downturn.
This downside protection is one of the reasons why Titan earned a spot as the top robo advisor in 2020.
Since Titan aims to outperform the market, the best way to evaluate its success is to compare historical returns to the S&P 500. Only the Flagship strategy has been around long enough to produce an effective head-to-head comparison, so that’s what we’ll focus on.
Over the course of four years, Titan’s Flagship fund has a cumulative return of 94.3% compared to the S&P 500’s 88.1%. (source)
Titan Opportunities was launched in August of 2020 and in about one year and four months (through the end of 2021) it produced a cumulative return of 59.9%, which outperformed the benchmark Russell 2000’s cumulative return of 43.7% (source).
Although these programs are fairly new, I’m encouraged by the results and progress in a relatively short period of time.
Titan’s advisory/management fees are straightforward. For balances less than or equal to $10,000, a fee of $5 per month is assessed. For balances over $10,000, a 1% annual fee is charged. Titan charges no performance fee.
Pros and Cons
Let’s summarize the strengths and weaknesses of Titan’s current offerings.
- Fully managed by professionals. Titan offers professionally-managed portfolios to everyday investors, not just millionaires.
- Four different strategies to include in your portfolio. You can invest in any one of the strategies, or let Titan advise you of the appropriate mix based on your situation and goals. You can also change the allocation at any time.
- Zero performance fees. Unlike hedge funds, Titan doesn’t charge more in fees based on the performance of your portfolio.
- The managed crypto fund is unique. If you’re interested in crypto but not sure what to invest in, you can let Titan’s crypto experts identify the best opportunities.
- Get started with as little as $100. You don’t need a huge portfolio to get started.
- Potential for excellent returns. Titan’s goal is to outperform the market and produce outstanding returns for clients. If you’re looking to maximize your returns, you may want to consider Titan.
- Complete liquidity. You can withdraw your money at any time with no lockups. Titan offers the same level of liquidity as owning individual stocks or ETFs.
- Retirement accounts. In addition to taxable accounts, Titan also offers IRAs.
- No tax strategy. Unlike some robo advisors and funds, Titan does not attempt to reduce the taxes you’ll owe.
- Limited track record due to its short history. Titan has only been around for about four years, and three of the four funds have less than two years of history.
Is Titan Right for You?
You may want to consider investing with Titan if you’re looking for an aggressive investment that has a chance to outperform the market. Titan will appeal to investors who value the opportunity to have an actively managed portfolio with fees that are significantly lower than hedge funds. There’s a lot to like about Titan and they have a solid track record so far.