Title: Determinants of asset allocation decisions of robo-advisors in the Asia-Pacific region

Authors: Thong Yan Lai; Yee Peng Chow

Addresses: Faculty of Accountancy, Finance and Business, Tunku Abdul Rahman University of Management and Technology, Kuala Lumpur, Malaysia ' Faculty of Accountancy, Finance and Business, Tunku Abdul Rahman University of Management and Technology, Kuala Lumpur, Malaysia

Abstract: This paper investigates the determinants of asset allocation decisions of robo-advisors in the Asia-Pacific region based on a sample of 30 robo-advisors in seven Asia-Pacific economies for the period 2022 to 2024. The results reveal that investors' risk profiles have a significant positive influence on the percentage of equity in the recommended portfolio. It is further observed that aggressive investors are allocated with more equities than investors with conservative and moderate risk profiles. In terms of fund characteristics, the number of portfolios offered has a significant positive impact on the percentage of equity in the recommended portfolio, especially for aggressive investors. Contrarily, expertise in fixed income class exerts a significant negative effect on the percentage of equity in the recommended portfolio, particularly for conservative investors. Lastly, macroeconomic factors, in particular inflation rate, negatively influence the percentage of equity in the recommended portfolio of conservative investors.

Keywords: Asia-Pacific; asset allocation; financial technology; modern portfolio theory; MPT; portfolio investments; robo-advisors.

DOI: 10.1504/IJBSR.2025.143549

International Journal of Business and Systems Research, 2025 Vol.19 No.1, pp.23 - 53

Received: 26 Jan 2024
Accepted: 15 Sep 2024
Published online: 30 Dec 2024 *