Traditional investment advisory is increasingly giving way to algorithmic and automated investment solutions. While robo-advisor platforms like Betterment and Wealthfront manage billions of dollars in the US and Europe, similar approaches are beginning to develop in Turkey. In this article, we compare the ways to invest automatically in Turkey, available platforms, and strategies.
What Is a Robo-Advisor? How Does Automated Investing Work?
A robo-advisor is a general term for digital investment platforms that create, rebalance, and manage portfolios using algorithms and mathematical models. Unlike traditional investment advisors, robo-advisors eliminate the emotional factor, operate at low cost, and are accessible 24/7.
A typical robo-advisor follows these steps:
- Determines your risk profile (age, income, risk tolerance, investment horizon)
- Creates an asset allocation suitable for your risk profile
- Automatically rebalances the portfolio
- Applies tax optimization strategies
- Provides regular reporting and performance tracking
Borsafolio Factor Portfolios — Systematic Stock Selection
While Borsafolio is not a traditional robo-advisor, it offers the most advanced tool for systematic and data-driven investing on BIST. The platform creates portfolios based on 6 different factor strategies and rebalances them monthly.
Available Factor Strategies
- Momentum: Stocks with the strongest price performance over the past 12 months
- Value: Undervalued stocks with low P/E and high earnings yield
- Low Volatility: Stocks with the lowest price fluctuation
- Quality: Companies with high return on equity and low debt ratios
- Growth: Companies with the highest revenue and earnings growth rates
- ML Ensemble: A hybrid strategy combining all factors using machine learning
Each portfolio comes with 10+ year backtest results, comparative performance against the BIST-100 index, and monthly updated portfolio composition. Investors can follow these portfolios directly or use them as inspiration to build their own strategies.
TEFAS Index Funds — Passive Investing
The easiest way to invest passively in Turkey is through index-tracking funds on TEFAS. Funds that track BIST-30, BIST-100, or sector indices provide broad market diversification at low management fees.
- BIST-30 / BIST-100 index funds: Broad market diversification
- Low management fees (typically 0.5-1.5% range)
- Automatic recurring investment orders available — ideal for DCA strategy
- No individual stock selection required
- Accessible through all banks
The downside of index funds is that they don't actively manage and don't aim for above-market returns. However, research shows that most active managers underperform the index over the long term.
Bank Structured Products
Major banks in Turkey offer structured investment products. These are typically principal-protected instruments with returns linked to a specific index or asset. While they can be considered under automated investing, caution is advised regarding transparency and costs.
- Principal-protected funds: Aim to protect the principal at maturity
- Index-linked deposits: Returns are tied to an index's performance
- Custom portfolio management: Personalized portfolio management for high amounts
- Caution: Risk of high management fees and low transparency
DIY Systematic Investing: Borsafolio Screener + DCA
The most effective way to create your own systematic investment strategy is to combine Borsafolio's stock screener with a Dollar Cost Averaging (DCA) approach. This gives you full control while maintaining a data-driven, disciplined investment process.
Step-by-Step DIY Systematic Strategy
- Set criteria in Borsafolio's screener: report card score, P/E, dividend yield, etc.
- Run the filter on the same date each month and select the top-scoring stocks
- Distribute your budget equally across these stocks
- Reassess your portfolio every 3-6 months
- Monitor portfolio risk with Borsafolio's diversification score
While this isn't a full robo-advisor, it's a practical way to invest systematically and without emotion.
Comparison: Robo-Advisor vs Factor Investing vs Passive Funds
Each approach has its advantages and disadvantages:
- Traditional Robo-Advisor: Fully automated, low effort, but limited options in Turkey so far
- Borsafolio Factor Portfolios: Data-driven, backtest-supported, monthly updates — but the investor makes the buy/sell decision
- TEFAS Index Funds: Lowest effort, broad diversification — but returns limited to market average
- DIY Systematic (Screener + DCA): Full control, low cost — but requires discipline and time
- Bank Structured Products: Principal protection advantage — but high fees and low transparency
Conclusion
Although a full-fledged robo-advisor platform has not yet become widespread in Turkey, there are multiple ways to invest systematically and automatically. Borsafolio's factor portfolios offer a systematic approach based on academic research, while TEFAS index funds are an ideal option for passive investing.
To build your own systematic strategy, explore Borsafolio factor portfolios: Factor Portfolios. Test your strategies with portfolio simulation: Simulation. Learn more about factor investing: What Is Factor Investing?.
