Betterment and Wealthfront are automated investing service for individual, IRA, Roth IRA & rollover 401(k) accounts. Both makes investing easy by focusing on low-cost ETFs.
I have been using Betterment since December of 2014. Before choosing Betterment, I compared it with Wealthfront and settled with Betterment. The primary reason why I choose Betterment is that there is no minimum balance requirement whereas Wealthfront had a minimum initial investment requirement of $5000 in 2014.
NOTE: Currently Wealthfront has lowered the minimum investment to open an account to $500 from $5,000 (the reason why I choose Betterment over Wealthfront is because of the minimum requirement). Also, Wealthfront offers its investment service for free to accounts with less than $10,000.
Features of Betterment
- No trade fees
- No transaction fees
- No rebalancing fees
- Automatic reinvestment of the dividends
Betterment charges a management fee of 0.15% to 0.35%, depending on your account balance. Fees are charged at the end of each quarter and it is taken from your Betterment account.
You can set the stock-to-bond allocation depending your needs. You can always adjust allocation later. Here is the Stock ETFs and bond ETFs
Betterment Stock ETFs:
Betterment portfolio includes stock ETFs that efficiently capture the broad U.S. stock market, and international developed and emerging markets
- US Total Stock Market – Vanguard U.S. Total Stock Market Index ETF (VTI)
- US Large-Cap Value Stocks – Vanguard US Large-Cap Value Index ETF (VTV)
- US Mid-Cap Value Stocks – Vanguard US Mid-Cap Value Index ETF (VOE)
- US Small-Cap Value Stocks – Vanguard US Small-Cap Value Index ETF (VBR)
- International Developed Stocks – Vanguard FTSE Developed Market Index ETF (VEA)
- Emerging Market Stocks – Vanguard FTSE Emerging Index ETF (VWO)
Betterment bond ETFs:
Betterment portfolio includes bond ETFs to improve the risk-adjusted performance of the portfolio at higher risk levels.
- Short-Term Treasuries – iShares Short-Term Treasury Bond Index ETF (SHV)
- Inflation Protected Bonds – Vanguard Short-term Inflation-Protected Treasury Bond Index ETF (VTIP)
- US High Quality Bonds (IRA accounts) – Vanguard US Total Bond Market Index ETF (BND)
- National Municipal Bonds (Taxable accounts) – iShares National AMT-Free Muni Bond Index ETF (MUB)
- US Corporate Bonds – iShares Corporate Bond Index ETF (LQD)
- International Developed Bonds – Vanguard Total International Bond Index ETF (BNDX)
- Emerging Market Bonds – Vanguard Emerging Markets Government Bond Index ETF (VWOB)