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Titan Review: Invest Like a World-Class Hedge Fund for Free

Updated on December 14, 2024 Updated on December 14, 2024
Simply Put: Titan Invest is a mobile platform giving investors access to hedge fund-like strategies. While not a fund, it operates as an SEC-Registered Investment Advisor. Using advanced algorithms and expert analysis, it curates portfolios of 15–25 top stocks, rebalanced quarterly. Backed by Y Combinator, Titan now serves over 35,000 clients, managing more than $800M in assets, democratizing access to elite investment strategies.

Pros:

  • Curated selection of high-quality stocks aiming to outperform the market.
  • Low minimum investment requirement of $500
  • Personalized hedging strategies to mitigate market downturns.
  • Comprehensive research center offering real-time updates.
  • Direct ownership of individual stocks within your portfolio.
  • Transparent advisory fees ranging from 0.7% to 0.9%.
  • Referral program offering monetary bonuses for each successful referral.

Cons:

  • Limited account types, primarily focusing on individual taxable accounts and IRAs.
  • Concentration in domestic equities, with limited exposure to international markets.
  • Primarily accessible through a mobile app, with limited desktop functionality.

Typically, hedge funds attract high net-worth, sophisticated investors and can carry minimum investment requirements exceeding one million dollars. That’s a high barrier to entry for most people. Titan has made it easier for ordinary investors to get started for free.

I’m going to show you the investment strategies practiced at Titan, how a hedge fund works, the best way to invest your cash with them, and a whole lot more.

Titan Overview

Titan is a mobile investing platform offering hedge-fund-like investment opportunities. By June 2022, it managed over $800 million in assets for 35,000+ clients. A Y Combinator alum, Titan provides actively managed funds, automated stock and bond portfolios, and alternative investments like private credit, real estate, venture capital, and crypto.

Users can explore the app for free, with a $100 minimum investment to start investing.

Titan’s Fee Structure

Titan’s fee structure has evolved over time. As of September 2024, Titan introduced a new pricing model:

  • Membership Fee: $25 per month or $250 annually (equivalent to two months free if paid upfront).
  • Advisory Fee: A flat 0.20% annual advisory fee on all managed investment products.

This new structure replaces the previous tiered advisory fees, which ranged from 0.70% to 0.90% based on account balances.

Regarding Other Fees:

  • Performance Fees: Titan does not charge performance fees.
  • Trading Fees: There are no trading fees for standard transactions.
  • Deposits and Withdrawals: Standard deposits and withdrawals are free. However, certain specific transactions, such as outgoing wire transfers or account transfers, may incur fees.

Titan does not impose performance or standard trading fees, and offers complimentary electronic statements and standard transactions, the current fee structure includes a membership fee and a 0.20% annual advisory fee on managed assets.

Mobile app:

Titan’s app provides tools for managing investments, tracking net worth, accessing educational content, and trading stocks or ETFs. It offers exclusive member experiences and access to financial advisors for personalized guidance.

Supported Platforms:

Titan’s mobile app is available on:

Account Types:

  • Individual taxable accounts
  • Traditional IRAs
  • Roth IRAs
  • Rollovers (existing IRAs, 401(k)s, and 403(b)s)
  • Inherited IRAs: Allowing beneficiaries to manage assets received from a deceased individual’s IRA.
  • Personal Trading Accounts: Enabling members to invest in individual stocks and ETFs

Availability:

Titan’s investment platform is currently available exclusively to U.S. investors. International investors do not have access to Titan’s services at this time.

What’s A Hedge Fund?

Hedge funds are private investment groups for wealthy investors, aiming for high returns with advanced strategies. They usually require big investments and are managed by experts to grow money in any market.

Hedge fund team sizes vary based on the firm’s size and strategy. While smaller funds may operate with fewer than 10 employees, larger firms can have hundreds. A typical small to mid-sized hedge fund team might include:

  • Portfolio Manager/Hedge Fund Manager: Oversees investment strategies and decisions.
  • Chief Operating Officer (COO): Manages daily operations and administrative functions.
  • Head Trader: Executes trades and manages trading activities.
  • Senior Investment Analysts: Conduct in-depth research and analysis to support investment decisions.
  • Junior Investment Analysts: Assist senior analysts with research and data analysis.
  • Operations and Compliance Specialists: Ensure operational efficiency and regulatory compliance.

The specific structure may vary, with some roles combined or expanded depending on the fund’s needs.

A hedge fund team is generally divided into two parts:

  • Front Office: Professionals who analyze potential investment ideas and manage the portfolio, including portfolio managers, analysts, and traders.
  • Back Office: The operational crew responsible for ensuring smooth operations, handling accounting, compliance, IT, and administrative tasks.
  • Some hedge funds also include a Middle Office, which focuses on risk management, trade support, and performance analysis.

usual hedge fund process formula

Hedge funds use long and short positions to generate returns in any market. Long positions involve buying assets expected to rise, while short positions involve selling borrowed assets expected to fall. The difference between the two is called “net exposure”, reflecting the fund’s market risk or bias. This strategy helps hedge funds navigate various market conditions effectively.

In Titan’s words, “Most funds are what we call ‘net long.’ That means the dollars they’ve invested in their long holdings is greater than the amount they’re shorting. When a fund is ‘net long’ stocks, it usually suggests a bullish view on the markets over the long term. Most funds are net long.”

Hedge funds typically invest in a mix of businesses, often through stocks they believe will perform well. After conducting thorough research, they evaluate each company’s financial health, growth potential, and market conditions to determine its worth. This valuation process helps decide whether the business is a good investment and how much of the fund’s capital to allocate to it.

The goal is to determine whether a stock is underpriced vs. its true intrinsic value. Quality company + attractive valuation = quality investment. – Titan Invest

Investing in hedge funds often comes with higher risks but the chance for bigger returns. Titan uses strategies similar to hedge funds, like picking top stocks and protecting against market drops by betting against the S&P 500. However, Titan isn’t a hedge fund—it’s an investment service offering actively managed portfolios.

***These advanced trading practices are best left to accredited investors like Titan, who can handle the stock market’s volatility.

Titan’s Performance

Titan’s performance varied over recent years. In 2021, Titan’s Flagship and Opportunities strategies outperformed benchmarks by double digits. However, 2022 saw a decline with a -22.5% return, and 2023 followed with a -12.4% return.

This contrasted with the S&P 500, which gained 24% in 2023. Despite challenges, Titan’s managed stock strategies showed resilience, outperforming benchmarks in aggressive portfolios.

The declines in 2022 and 2023 likely reduced Titan’s Sharpe Ratio, reflecting lower risk-adjusted returns compared to earlier years.

For the most up-to-date performance information, it’s best to check Titan’s website directly.

***See full performance disclosures at end of this post and on Titan’s website

According to Titan’s website, their hypothetical client experienced better returns than the S&P 500 for each unit of risk taken. For the most current performance data, please refer to Titan’s official reports.

Please note that past performance does not guarantee future results.

For those wanting to take a deep dive on Sharpe Ratios, Smart Beta, and Risk Parity read chapter 11 from A Random Walk Down Wall Street by Burton Malkiel

How Titan Invest Works: The Investment Process

Institutional investment managers with over $100 million in assets under management are required to file Form 13F with the U.S. Securities and Exchange Commission (SEC) each quarter. These public reports disclose their U.S. equity holdings, providing insights into their investment activities.

Additionally, beginning in 2025, Form 13F filers meeting specific criteria will need to report their short positions monthly on the new Form SHO.

Titan leverages advanced algorithms to analyze these filings, identifying stocks that align with their investment criteria. As Titan notes, “It’s difficult for most humans to synthesize all the data into a sensible portfolio strategy.” By detecting patterns among top-performing funds, Titan selects approximately 5% of the 3,500 available stocks to construct client portfolios.

When curating a portfolio, Titan considers specific criteria:

  • Exceptional management with a proven track record of integrity
  • Long-term investors with low portfolio turnover
  • Funds making concentrated, high-conviction investments

Why Only 15 to 25 Stocks?

mobile app titan

Titan uses 15 to 25 stocks to balance diversification and potential returns, ensuring enough variety to manage risk without diluting gains.

Titan offered a quote from legendary investor Burton Malkiel (the guy I referenced earlier who wrote the classic investment book A Random Walk Down Wall Street) to this question:

“By the time the portfolio contains close to 20 equal-sized and well-diversified issues, the total risk (standard deviation of returns) of the portfolio is reduced by 70 percent. Further increase in the number of holdings does not produce any significant further risk reduction.”

Fractional Shares

Titan is an SEC-registered investment advisor that manages investments on your behalf. Your portfolio typically includes 15 to 25 U.S. stocks, equally weighted through the use of fractional shares. This means that your funds are evenly distributed across all selected stocks even with a modest investment.

If you invest $1,000 with Titan, they use fractional shares to evenly distribute your funds across the selected stocks in your portfolio. This allows for equal allocation, even with smaller investment amounts.

Everything lives inside your brokerage account that you’re able to access anytime.

Rebalancing

Titan reviews and rebalances portfolios every three months. After analyzing the latest 13F filings, they adjust holdings—keeping some stocks and replacing others. Only the stocks with the strongest positions at the end of the previous quarter stay.

Titan believes the benefits of rebalancing outweigh the downside of paying taxes on short-term stock sales. They say the impact of these taxes is minimal compared to the advantages of regularly fine-tuning the portfolio.

Hedge Your Bets: What’s Your Risk Tolerance?

Hedging protects you against market declines. Remember, you’ve got two bets running simultaneously:

  • One with a bullish outlook on the market (or “long” – you want stocks to go up)
  • One where you “short” or bet against the stock market (bearish outlook that stocks will go down)

In a Titan portfolio, you’re allowed to short between 0-20% of the market based on your risk tolerance. You can choose to have an aggressive, moderate, or conservative risk profile.

How It Works

When the Portfolio is Not in a Downturn:

  • Aggressive: 0% hedged
  • Moderate: 5% hedged
  • Conservative: 10% hedged

When the Portfolio Is in a Downturn:

  • Aggressive: 5% hedged
  • Moderate: 10% hedged
  • Conservative: 20% hedged

In a downturn, Titan sells equal portions of all 20 stocks in your portfolio to fund the increased hedge position. This approach aims to mitigate losses during market declines.

Please note that while hedging can reduce risk, it does not guarantee against losses. The effectiveness of this strategy depends on market conditions and individual circumstances.

titan mobile app

Titan’s current investment process focuses on managing risk through careful stock selection and diversification. The degree of risk management depends on your chosen investment strategy and risk tolerance.

Titan utilizes high-quality stocks and ETFs to help weather market volatility. Their automated and actively managed strategies aim to provide resilience during market downturns through strategic asset allocation.

Risk profiles can be adjusted periodically, and Titan continuously monitors portfolio performance. They assess performance relative to market benchmarks, making adjustments to strategies as needed to align with investors’ goals and changing market conditions. The focus is on proactive management to navigate market fluctuations effectively.

Is Titan A Hedge Fund?

No, Titan is not a hedge fund. While it uses some similar strategies to try to outperform the market, Titan operates differently. Your money is kept in an individual account tailored to your risk tolerance and financial goals. This means more personalized management.

Titan has a lower minimum investment requirement, allows you to withdraw your money at any time, and offers more transparency through its app. With a mix of actively managed strategies, passive ETFs, and alternative investments, Titan serves as an accessible investment platform for everyday investors.

In their words:

“Titan invests you like an active manager, with the personalization of an advisor in your pocket.”

They’re an SEC-registered investment advisor – not a hedge fund.

Titan’s Mission

Titan appeals to investors looking for something more than a passively-managed, broad-based index fund or set-it-and-forget-it robo advisors like Wealthfront. The reason behind their low costs is similar to the way online savings banks offer higher APYs – they trim the fat.

We believe that everyone should have access to transparent, high-performance investing vehicles. We are on a mission to modernize active investment management for a new generation.

Costs are kept low by removing excess bonuses, pricey offices, manual compliance and account management; handing off the savings to investors.

They are:

“Democratizing the hedge fund experience for everyday investors.”

Titan’s Origin Story

Titan was founded in February 2018 by co-founders Clayton Gardner, Joe Percoco, and Max Bernardy. Clay and Joe worked for hedge funds at Goldman Sachs and Cerberus Capital while Max was a software engineer with a patent in hedge fund software.

This experience equipped them with high-level hedge fund investing strategies that achieved exceptional returns for their clients.

Their focus then was the same as it is now:

Long-term investments and time horizon with an emphasis on high-quality businesses.

They didn’t like how ordinary investors were excluded from these strategies, so they set out to fix an imperfect system by:

  • Integrating technology
  • Providing customers with a user-friendly experience
  • Automating the entire process with algorithmic software and cutting costs

Strategies once reserved for the ultra-wealthy are now available to anyone (U.S. investors) for free. Ordinary investors can now invest for potentially higher returns.

Creating an Account

Getting started is easy. You’ll have to answer a few questions regarding your investment goals, time horizon, and risk tolerance.

After providing your name, date of birth, and social security, you’re set to fund your account.

Deposits, Withdrawals, and Transfers: No Lockups

Your money is available whenever you need it. Unlike hedge funds that freeze your funds for up to a year or more, Titan doesn’t have any lockups.

There is no required minimum investment and you can access your funds whenever you like (takes 2-4 business days). Adding funds is easy when linking an external bank account. There is a required minimum deposit amount of $100 (every deposit you make must be at least $100).

ACH transfers take 1-2 business days and once settled in your account, take an additional 1-2 business days before Titan invests your money. Wire transfers are also supported, but you’ll have to contact their support team to set one up.

Withdrawals take 2-4 business days. A minimum withdrawal amount of $100 is required. If you want to liquidate your full amount, Titan will take 1-2 business days to initiate the process and then 2-4 business days to withdraw your funds.

There’s a withdrawal holding period that says your funds must remain in your account for at least five trading days to deter money laundering and improve Titan’s risk management.

Software Integration with Other Apps

Currently, you can integrate your account with Credit Karma and Empower (formally Personal Capital). Titan also supports Intuit’s TurboTax through their partner Apex Clearing. You can use TurboTax Premiere to import your trade history.

Consolidated 1099 forms will be uploaded directly into your Turbo Tax account come tax time. Titan Invest also integrates with H&R Block’s tax software.

If needed, CSV files of your trading activity can be downloaded directly through Apex. At this time, users aren’t able to integrate or download data to their Quicken account.

Is Titan Invest Safe?

Yes, your investment funds are safe. Titan uses 256-bit encryption with Secure Sockets Layer (SSL) technology to protect all data. Your money is SIPC insured up to $500,000, including a maximum of $250,000 for cash claims.

Additionally, your assets are securely held by Apex Clearing Corporation, a leading third-party custodian in the fintech industry.

Promos and Perks

When you open an account and refer a friend who funds an account, Titan’s referral program rewards you with incentives that vary over time. Previous offers included discounts on advisory fees, while recent programs provide bonuses like portfolio credits or higher cash yields. Check Titan’s website for the latest details.

They're not spending money on marketing to grow; they're spending it on their customers' investing experience

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They’re not spending money on marketing to grow; they’re spending it on their customers’ investing experience. It’s their way of paying it forward.

Instant Deposits

Titan offers an **Instant Deposits** feature that allows users to invest within hours—or even minutes—of initiating a transfer. This service is available to all Titan users at no additional cost, providing prompt access to investment opportunities.

This feature distinguishes Titan from many larger robo-advisors, which may not offer instant deposits or might charge for expedited services. By enabling rapid fund deployment, Titan aims to give clients greater control over their investments.

Please note that while Titan facilitates quick access to funds, the actual time for investments to be fully operational can vary based on factors such as bank processing times and market conditions.

Customer Support

Titan offers multiple channels for customer support:

  • Email: Reach out to their support team at [email protected].
  • In-App Support: Access assistance directly through the Titan app.
  • Their customer service is available via live chat from 9 a.m. to 6 p.m. Eastern Time, Monday through Friday.

They also have a strong social media presence. Their news outlet, The Feed, is an Instagram-inspired feature connecting millennials with the markets.

Users also gain access to a personalized stream of videos, articles, and in-depth reports tailored to the stocks in their portfolio.

Is Titan Invest Right For You?

If you’re looking for something more than a passively-managed index fund and want something a little more hands-on, Titan might make sense.

Pros

  • Curated selection of high-quality stocks aiming to outperform the market.
  • Low minimum investment requirement of $500.
  • Personalized hedging strategies to mitigate market downturns.
  • Comprehensive research center offering real-time updates, in-depth reports, and educational content.
  • Direct ownership of individual stocks within your portfolio.
  • Transparent advisory fees ranging from 0.7% to 0.9%, depending on account balance, with no performance fees.
  • High liquidity with no lock-up periods, allowing access to funds at any time.
  • Referral program offering monetary bonuses for each successful referral.

Cons

  • Limited account types, primarily focusing on individual taxable accounts and IRAs.
  • Concentration in domestic equities, with limited exposure to international markets.
  • Services available only to U.S. residents.
  • Primarily accessible through a mobile app, with limited desktop functionality.
  • Relatively short track record, with the platform established in 2018.

Final Thoughts

Titan was established to provide individual investors with access to actively managed investment strategies, bridging the gap between passive mutual funds and exclusive hedge funds. Unlike traditional hedge funds, Titan offers:

  • Low Minimum Investment: Start investing with as little as $100.
  • No Performance Fees: Titan charges a straightforward advisory fee without additional performance-based costs.
  • No Lockup Periods: Enjoy the flexibility to access your funds at any time, without restrictions.

By leveraging technology and eliminating intermediaries, Titan passes savings directly to investors, offering a more hands-on, actively managed investment experience. This approach democratizes access to sophisticated investment strategies traditionally reserved for the ultra-wealthy.

***Disclosure*** This article is a paid partnership with Titan Invest (“Titan”). All opinions are our own. This is for informational purposes only and does not constitute a comprehensive description of Titan’s investment advisory services. Titan uses a proprietary algorithmic strategy in selecting recommendations to advisory clients. Please see Titan’s website (https://www.titanvest.com) and the Program Brochure (available on the website) for more information. Certain investments are not suitable for all investors. Before investing, consider your investment objectives and Titan’s fees. The rate of return on investments can vary widely over time, especially for long-term investments. Investment losses are possible, including the potential loss of all amounts invested. Nothing here should be considered as an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. The above content is for illustrative purposes only to demonstrate products, services, and information from Titan. Performance results are net of fees and include dividends and other adjustments. 2019 YTD results are from 1/1/19 through 5/31/19. 2018 results are from Titan’s launch date of 2/20/18 through 12/31/18. All-Time IRR, alpha, beta, and Sharpe ratios are from Titan’s launch date of 2/20/18 through 5/31/19. All-Time IRR is the actual internal rate of return. Alpha is calculated using the Capital Asset Pricing Model (CAPM) and uses a risk-free rate of 2.09%, which was the average 3-month Treasury Bill rate during the period. All performance figures represent performance of a hypothetical account created on Titan’s inception date of 2/20/18 using Titan’s investment process for an aggressive portfolio, not an actual account. All Titan performance results include the use of a personalized hedge for a hypothetical client with an “Aggressive” risk profile; clients with “Moderate” or “Conservative” risk profiles would have experienced lower returns. Please visit https://support.titanvest.com/investment-process/hedging for full disclosures on our hedging process. Please see Titan’s website for full disclosures.

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Mark Fiebert - Contributor Mark spent over 30 years as a senior finance executive in Private Banking, Asset Management and Alternative Investments. Mark holds a BS in Accounting from Brooklyn College, an MBA in Finance from Pace University as well as being sponsored to attend The Wharton School Executive Development Program.
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