NEW YORK, Sept. 13, 2017 /PRNewswire/ -- Betterment, the largest independent online investment advisor, today announced it will offer two new portfolio strategies to help meet the preferences of customers with varying investment appetites and financial circumstances. The strategies will include an income portfolio strategy from BlackRock and a smart beta portfolio strategy from Goldman Sachs Asset Management (GSAM).
"Betterment has an increasingly diverse customer base; they all want to put their money to work, but not necessarily in the same way," said Jon Stein, Founder and CEO of Betterment. "Adding these options to our existing portfolio strategies will help us deliver on our promise to provide customers with a personalized investment plan tailored for their individual needs and preferences."
BlackRock Target Income Portfolio Strategies
Betterment selected BlackRock's income portfolio because it was created for clients averse to stock market risk, but who want to target higher levels of income than cash savings accounts deliver. The portfolio invests 100 percent of assets in U.S. bonds and international bonds issued in U.S. dollars. The portfolio strategy prioritizes capital preservation and generating cash income.
"Our customers continue to seek out strategies that can turn their investments into a steady income," said Alex Benke, CFP®, VP of Financial Advice and Investing at Betterment. "We're excited to be partnering with BlackRock to provide this new portfolio, and believe that a significant portion of our growing customer base may gain peace of mind by targeting a steady stream of income, while minimizing the risk of losing principal.
Goldman Sachs Smart Beta Portfolio Strategies
Betterment selected GSAM's smart beta strategy because it offers clients a strategy that goes beyond market capitalization. In addition to traditional passive funds, the portfolios use GSAM's proprietary performance-seeking ActiveBetaTM equity ETFs. They seek to deliver stronger risk-adjusted returns relative to traditional market-weighted index products. The ActiveBetaTM strategy is based on four well-established drivers of performance—known as factors— including good value, strong momentum, high quality and low volatility.
This GSAM portfolio strategy tends to be more heavily allocated to emerging markets, as well as small-cap stocks in both the U.S. and developed countries. The strategy also incorporates REITs and proportionally invests more in high-yield bonds with longer durations, compared to Betterment's core portfolio strategy.
"Individuals managing their investments through Betterment can now easily tap into GSAM's investing and risk-management expertise at a low cost," Benke said. "We're thrilled to partner with Goldman Sachs Asset Management by offering this new smart beta portfolio to those in our large customer base looking for a thoughtful and deliberate approach to helping achieve better risk-adjusted returns."
Betterment manages more than $10 billion in assets for more than 270,000 customers. The addition of these two portfolio strategies will complement Betterment's SRI and core portfolio strategies to offer more investment options tailored to help meet individual financial goals. For more information, please visit Betterment.com.
Joe Ziemer, [email protected], 212-228-1328
Arielle Sobel, [email protected], 212-228-1328
Danielle Shechtman, [email protected], 212-228-1328
Betterment is the largest independent robo-advisor, helping people to intelligently manage and grow their wealth through smarter technology. With more than 270,000 customers and over $10 billion in assets under management, the service offers a globally diversified portfolio of ETFs, designed to help provide you with higher expected returns for retirement planning, building wealth, and other savings goals. Betterment also helps customers get on track for a comfortable retirement with RetireGuide™, a retirement planning tool that lets people know how much they should save and if they are investing correctly. Betterment was a CNBC Disruptor 50, FT 300 and Webby award winner, and it has been featured in the New York Times, Forbes, and the Wall Street Journal. Betterment helps people work to achieve a smarter financial future with minimal effort and for a fraction of the cost of traditional financial services.
Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Determination of largest independent robo-advisor reflects Betterment LLC's distinction of having highest number of assets under management, based on Betterment's review of assets self-reported in the SEC's Form ADV, across Betterment's survey of independent robo-advisor investing services as of July 11, 2016. As used here, "independent" means that a robo-advisor has no affiliation with the financial products it recommends to its clients. If you also have a 401(k) account through Betterment For Business, that account is subject to a separate fee schedule and is not included in your balance for determining eligibility for the fee tiers or subject to the fee cap mentioned above.