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Why I choose Betterment over Wealthfront?

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

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Fee

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)

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