Effectiveness of the robo-advisor in managing and enhancing investment portfolio returns: analytical and evaluative study of the "Tamra Capital" platform (SCIENTIFIC RESEARCH)

Summary

• Tamra Capital is a Saudi robo-advisory platform licensed by the Capital Market Authority on November 23, 2021 (License No. 30-20212) to manage and advise on Shariah-compliant investments.p.8
• Traditional financial advisors often charge 1% or more annually of assets under management and require high minimum account balances between $100,000 and $1 million.p.7
• Robo-advisors offer low-cost management (around 0.25% of assets under management) with minimal or no minimum investment thresholds.p.7
• By mid-2026, the Adventurous Tamra portfolio outperformed its nearest rival platform by 23.82% before fees and Zakat.p.13

Key insights

1. Robo-advisors utilize Markowitz Mean-Variance Optimization algorithms to build tailored portfolios consisting primarily of low-fee Exchange-Traded Funds (ETFs).p.3
2. Threshold-based portfolio rebalancing (2%-3% off target) outperforms time-based adjustments by taking immediate action without generating excess transaction fees.p.6
3. Tamra Capital offers eight distinct Shariah-compliant funds categorized across various risk profiles ranging from Very Low to Very High risk.p.9
4. High-risk portfolios require an investment horizon longer than two years to smooth out short-term shocks and capture the full return differential.p.12
5. Tamra Capital's dynamic rebalancing strategies enabled its highest-risk portfolio to absorb market shocks, such as the March 2025 correction, and deliver net outperformance.p.13
6. After accounting for monthly management fees and Zakat, the Adventurous Tamra portfolio returned 33.94% and 48.93% more on a net basis than competing Platforms 1 and 3.p.14
7. Key systemic and cybersecurity risks facing robo-advisors include data poisoning, API key exposure, cloud provider concentration, and information manipulation via AI.p.10
8. Regulatory frameworks should incorporate periodic algorithm audits to verify rebalancing mechanisms and shock resilience in automated platforms.p.15