Key takeaways
- Portfolio development is only the start. Betterment’s automated investing is designed that will help you handle danger, maximize returns, and reduce leg work.
- Tax-smart options provide help to maintain extra of what you earn. Totally-automated Tax Coordination and tax-loss harvesting hunt down efficiencies laborious to copy by hand.
- Navigation helps maintain your targets on monitor. Automated rebalancing, easy glide paths, and recurring deposits make it simpler to remain the course via market ups and downs.
- Peace of thoughts is a part of the return. Automation frees up time and headspace, letting you reside your life as an alternative of worrying about your portfolio.
With the arrival of self-directed investing at Betterment, you may select from hundreds of particular person shares and ETFs by yourself, together with the exact same funds we analysis and choose for our curated portfolios.
So if now you can purchase the identical low-cost investments, why pay somebody (i.e., us) to handle them for you?
It’s a good query, and to assist reply it, it helps to grasp why our portfolio development is only the start of the story.
It isn’t simply the Betterment portfolio you see at the moment, however the one you see tomorrow (and within the weeks, months, and years that observe) that captures the complete worth of our experience and expertise. The continued optimization and evolution of your portfolio, in different phrases, is the place our automated investing actually shines.
Generally the advantages are tangible. Generally they’re emotional. However no matter the way you body it, we’re always working within the background to ship worth in three massive methods.
- Tax financial savings: maintaining extra of what you earn
- Navigation: maintaining your investing on-track
- Calm: maintaining your sanity—and your spare time
1. Tax financial savings: maintaining extra of what you earn
Some of the dependable methods to extend your returns is decreasing the taxes owed in your investments. And this is the primary means Betterment’s managed portfolios can repay. Our buying and selling algorithms take tax optimization to a degree that’s virtually inconceivable to copy by yourself.
Take our Tax Coordination function, which makes use of the pliability of our portfolios to find belongings strategically throughout Betterment conventional IRAs/401(okay)s, Roth IRAs/401(okay)s, and taxable accounts. This mathematically-rigorous spin on asset location can assist extra of your earnings develop tax-free.
Then there’s our fully-automated tax-loss harvesting, a function designed to unencumber cash to take a position that will’ve in any other case gone to Uncle Sam. Our expertise repeatedly scans accounts to determine harvesting alternatives, then goes to work. It’s how we harvested practically $60 million in losses for purchasers through the tariff-induced market volatility of Spring 2025.
It’s additionally an enormous cause why practically 70% of consumers utilizing our tax-loss harvesting function had their taxable advisory charge coated by doubtless tax financial savings.1 And with the upcoming addition of direct indexing to Betterment’s automated investing, our harvesting capabilities will solely proceed to develop.
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2. Navigation: maintaining your investing on-track
It’s simple to veer off-course when managing your personal investing. Life occurs, calendars refill, and the following factor you already know, your portfolio begins to float.
Once you pay for automated investing, nevertheless, you not solely get our steering upfront, you profit from expertise designed to get you to your vacation spot with much less effort. As markets ebb and circulate, for instance, we routinely rebalance your portfolio to take care of your required danger degree. And the “glide path” that routinely lowers your danger as your aim nears? It simply occurs in eligible portfolios. No analysis or calendar reminders wanted.
Our administration additionally helps steer your investing towards a time-tested path to long-term wealth. Most of our portfolios are globally diversified so you are taking benefit when abroad markets outperform. And we encourage recurring deposits so you purchase extra shares when costs are low.
Latest analysis by Morningstar helps quantify the worth of this “dollar-cost averaging” strategy. They discovered buyers misplaced out on roughly 15% of the returns their funds generated due largely to leaping out and in of the market. Betterment prospects utilizing recurring deposits, in the meantime, earned practically 3% greater annual returns.2 It seems it’s simpler to remain the course with somewhat assist.
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3. Calm: Preserving your sanity—and your spare time
Our automation can prevent time—two hours for every rebalance alone3—however the worth of automating your investing is extra than simply time saved. It’s high quality time spent. How a lot of your finite power, in different phrases, are you spending worrying about your cash? We will’t erase all your nervousness, however our staff and our tech can empower you to construct wealth with confidence and ease, with an emphasis on the benefit.
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Between market volatility and a relentless barrage of scary headlines, the world is aggravating sufficient proper now. There’s no use so as to add portfolio optimization and maintenance to the record. That’s, after all, except you take pleasure in it. However many people don’t. The vast majority of Betterment prospects we surveyed stated they maintain most of their belongings in managed accounts, with self-directed investing serving as a facet outlet for exploration. That’s why we provide each methods to take a position at Betterment.
The payoff is private
Investing efficiency and value are sometimes measured all the way down to the hundredth of a proportion level. That’s “zero level zero one p.c” (0.01%), often known as a “foundation level” or “bip” for brief. Right here at Betterment, it’s our mission to make each one of many 25 bips we mostly cost value it. We measure our portfolio’s efficiency after these charges, so that you see what you’ve actually earned. And we don’t cease there. With direct indexing and totally paid securities lending coming quickly to automated investing, you’ll get much more methods to make your cash work tougher.
