Robo-investing pits Vanguard against Fidelity in latest rivalry

New York

BARRAGED by investment firms eager to manage their life savings, many Americans are making their choice - for nobody. They're shrugging off investment advisers altogether in the hunt for lower costs, Bloomberg Markets magazine reports in its July/August special Rivalry issue.

So fund giants Vanguard Group and Fidelity Investments are trying to win them over - with robots. The rivals, which have a combined US$5.4 trillion in assets under management, are escalating the competition for customers in a new frontier known as robo-investing. Robo-firms use algorithms to design portfolios based on questions clients answer online. These portfolios will more than triple to as much as US$60 billion in 2015 from about US$16 billion at the start of 2014, Boston researcher Aite Group predicts.