Betterment Robo Advisor 100 Portfolio: ETF allocation and returns (2024)

FAQs

What is the Betterment robo-advisor 100 portfolio? ›

The Betterment Robo Advisor 100 Portfolio is a Very High Risk portfolio and can be implemented with 6 ETFs. It's exposed for 100% on the Stock Market. In the last 30 Years, the Betterment Robo Advisor 100 Portfolio obtained a 8.29% compound annual return, with a 15.78% standard deviation.

One of the biggest downsides to using Betterment is that you can't pick your own investments, as the only option is to use the automated investing services. And while Betterment's fees are quite reasonable, there are other platforms with lower fees.

If your goal is short-term, we'll recommend a more conservative portfolio with lower expected returns with less volatility, and if your goal is longer term, we'll likely recommend a more aggressive portfolio with higher expected long-term returns with higher volatility.

Many Betterment portfolios are globally-diversified, making the MSCI All Country World Index (ACWI) a better benchmark than the S&P 500. The ACWI covers 47 global markets in both developed and emerging economies, representing 99% of the investable global equity market.

High-net-worth investors exited robo-advisor arrangements at the highest rates. Here's how the data broke down along asset levels: $50,000 or less: A drop from 23.6% to 20.6% in 2022, which translates to a decrease of 3 percentage points.

While a robo-advisor can be efficient in managing your investing decisions, a human advisor may be best for more complex decisions like helping you choose the right student loan repayment plan or comparing compensation packages for a new job. Cost: If cost is a factor, robo-advisors typically win out here.

Betterment's alleged failures were related to “tax-loss harvesting,” a technique common among financial planners whereby taxes on investment profits are reduced or eliminated by offsetting them with losses from other investments.

SIPC membership: Betterment provides Securities Investor Protection Corporation (SIPC) insurance, like any investment broker. This insurance covers your portfolio and uninvested cash in case Betterment goes bankrupt. Your portfolio is insured up to $500,000, with up to $250,000 maximum for uninvested cash.

Betterment offers tax-loss harvesting for users with taxable accounts. Fidelity Go doesn't offer tax-loss harvesting but does provide tax-advantaged funds (i.e. municipal bonds) to reduce your tax burden over time. Betterment is not a licensed tax advisor.

Betterment is better for people who have less money to invest, because it doesn't have a minimum amount to open an account, while Vanguard requires a minimum of $3,000 of assets to use its Vanguard Digital Advisor® robo-advisor service. Do Vanguard and Betterment offer access to financial advisors?

Is Betterment the best robo-advisor? ›

The bottom line: Betterment is a clear leader among robo-advisors, offering two service options: Betterment Digital provides automated portfolio management at $10 to start an account; Betterment Premium provides unlimited phone access to certified financial planners for a $100,000 account minimum.

Robo-advisors, like human advisors, cannot guarantee profits or protect entirely against losses, especially during market downturns—even with well-diversified portfolios. Because most robo-advisors only take long positions, when those assets fall in value, so will the portfolio it has constructed.

Robo-advisors often build portfolios using a mix of various index funds. But depending on the asset class mix and the particular index funds selected, a robo-advisor may underperform or outperform a broad equity index like the S&P 500.

Do robo-advisors outperform the S&P 500? Robo-advisors can outperform the S&P 500 or they can underperform it. It depends on the timing and what they have you invested in. Many robo-advisors will put a percentage of your portfolio in an index fund or a variety of funds intended to track the S&P 500.

The robo‑advisor automatically builds you a diversified portfolio of funds—usually selected by a team of investment professionals. 3. Experts regularly monitor market activity and every underlying investment to ensure your portfolio is rebalanced appropriately by a sophisticated algorithm—all so you don't have to.

The default state for the Betterment Broad Impact Portfolio is an allocation of 90% stocks / 10% bonds in a tax-deferred portfolio, representing a moderate state for a long-term investment in an IRA or 401(k) plan.

Betterment offers its Core portfolio strategy (“Core”) to clients who wish to invest in a model portfolio composed of stock and bond allocations of broadly diversified, low-cost exchange traded funds (“ETFs”) that seek broad-market equity and bond exposures.

Robo-advisor performance is one way to understand the value of digital advice. Learn how fees, enhanced features, and investment options can also be key considerations. Five-year returns from most robo-advisors range from 2%–5% per year.