Robo advice is typically focused on which types of investments?

• A. Index funds and ETFs
• B. Individual stock picking
• C. Real estate investments
• D. Commodities futures

Answer: (A)

Robo advice relies on automated, algorithm-driven portfolio management that aims for broad market exposure through low-cost, diversified holdings. The typical approach is to use index funds and ETFs to build a diversified portfolio that can be automatically rebalanced and scaled, rather than trying to pick individual stocks. This aligns with a simple, transparent strategy focused on cost efficiency and systematic asset allocation.

Choosing individual stocks would require active stock picking, higher costs, and more risk from concentrated bets—precisely what automated, low-touch advice avoids. Real estate investments, unless accessed through broad, low-cost vehicles like REIT ETFs, are less compatible with the automated, liquidity-focused framework robo-advisors provide. Commodities futures introduce complexity and volatility that Robo platforms generally steer away from in favor of stable, diversified exposures.