At iInvest®, we employ a globally diversified mix of exchange-traded funds, chosen to help you earn better returns at various levels of risk.


Automated and flexible portfolio management.

We help our clients meet their unique needs through a selection of ETF-based portfolio strategies from leading asset managers. Each of the strategies are designed to serve our client’s unique short-term and long-term investing needs while leveraging market-leading portfolio management technology and an award-winning user experience.

Betterment is a set of globally diversified stock and bond allocations with a U.S. value and small-cap tilt, comprised of low-cost, liquid, index-tracking ETFs from diverse providers. A 100% bond allocation is entirely U.S. ultra-short term treasuries, allowing for extremely low risk.

GSAM’s ETF asset allocation portfolios provide exposure to core stocks and bonds as well as diversifiers, such as emerging markets and REITS, using low-cost, liquid ETFs. These portfolios use an established, factor-based approach designed to balance risk across multiple sources of return.

Vanguards ETF strategic model portfolios are derived from global market cap weights. They include exposure to both U.S. and international equities and global investment-grade bonds, encompassing more than 19,000 global stocks and bonds, using low-cost index-tracking exchange-traded index funds.

The BlackRock Target Income portfolios are designed for investors seeking a low-risk alternative to the Betterment portfolio. This is a 100% bond portfolio with different income targets that seeks to provide steady income with low risk.

Introducing a Socially Responsible Investing Portfolio. Click here to learn more.

Responsible Investment Tools

  • iInvest® seeks to maximize investor take-home returns, which drives our investment selection criteria and process.
  • We select low-cost, highly liquid, index-tracking ETFs to ensure our clients are gaining the desired asset exposure at the lowest total cost of ownership.
  • We continue to monitor our investment selections on an ongoing basis, and encourage individual investors to do so as well.

Why Do We Invest in ETFs?

One of iInvest’s central objectives is to help investors achieve the best possible take-home returns. At the most fundamental level, we do this through the asset allocation advice we provide for every portfolio. However, another key component of performance is the investment vehicles we use in each portfolio. They are an essential—but often overlooked—element in maximizing the risk-adjusted, after-tax, net-of-costs return for our customers. Low-cost expense ratios well below the industry average.

Why Invest In ETFs?ETF data comes from FactSet as of: 10/6/2016.Mutual fund data comes from Investment Company Institute 2016 Investment Company Fact Book ICI Factbook http://www.icifactbook.org

Diversified
Most exchange-traded funds—and all ETFs used by iInvest®—are considered a form of mutual fund under the Investment Company Act of 1940, which means they have explicit diversification requirements. They do not have any over-concentration in one company or sector, unless called out specifically in the fund offering prospectus. Diversification, both within a fund and throughout a portfolio, has been said to be the “only free lunch” in finance. This is what drives iInvest® focus on asset allocation, ensuring that our clients aren’t overly exposed to individual stocks, bonds, sectors or countries.

Tax-efficient
Most ETFs already have the tax efficiency of index funds – which don’t tend to generate internal capital gains due to “churning” (frequent buying/selling of stocks and bonds due to investor or manager movement). Second, the two-tiered market by which shares of ETFs are transacted isolates investors from additional tax consequences and limits capital gains from accumulating within the fund. Because an ETF is a type of mutual fund, shares can only be issued or redeemed through a fund administrator, once a day at Net Asset Value, like every other mutual fund. Yet, ETF shares trade all day long in transactions between buyers and sellers: How do these sync? When large investors or market makers, known as authorized participants, notice an imbalance between the price of the ETF and the aggregate of the prices of the underlying securities the ETF tracks (or they need to fill a large order of ETFs for a customer), they essentially swap the underlying stocks or bonds for shares of the ETF, or vice versa. This transfer in (or out) of the fund is known as “in-kind” and limits the tax consequences for the fund by allowing it to constantly raise its cost basis of individual securities by swapping out the securities with the largest built-in gains first (swaps, as opposed to sales, don’t realize the gains.) In the event that the fund needs to sell securities itself, having a high basis would limit its tax liability. Non-ETF mutual funds don’t have this luxury.

Flexible
ETFs are the duct tape of the investing world, a “fix-all” asset, if you will. They can be accessed by anyone with a brokerage account and just enough money to buy at least one share (and sometimes less—at iInvest® we trade fractional shares, allowing our customers to diversify as little as $10 across a portfolio of 12 ETFs). While most ETFs are straightforward in their exposure, they are used in so many ways that they have become an essential tool for all kinds of investors—short-term traders and long-term investors alike. This versatility as an investment vehicle helps keep ETF pricing true to the price of the underlying assets held by the fund.

Sophisticated
ETFs take advantage of decades of technological advances in buying, selling and pricing securities. Alongside their modern structure sit myriad data points watched by investors and advisors who are constantly analyzing the funds and their investments to make sure that the fund prices stay true.

Investment Flexibility
The maturation and growth of the global ETF market over the last two decades have led to the development of an immense spectrum of products covering a number of different asset classes, markets, styles, and geographies. The result is a robust market of potential portfolio components which are versatile, extremely liquid, and easily substitutable.

ETFs Have Seen Significant Growth

ETF Growth from 2006-2015Source: Investment Company Institute 2016 Investment Company Fact Book, Chapter 3: Exchange-Traded Funds, Figure 3.2

We will continue to drive innovation when trying to improve investor take-home returns by finding ways to lower costs and frequently re-evaluating our portfolio choice.


Historically better results

When it comes to paying your investment fees, it’s a good idea to know exactly what you are buying. In the case of working with a Registered Investment Advisor, you’re usually banking on getting some alpha, or returns that are above and beyond how the market is performing. In a new analysis by our technology partner, a backtested study* was performed of our portfolio model’s historical performance against the average returns earned by an investor using an advised portfolio with data assembled by Asset Risk Consultants, an independent investment consulting company. Of the more than 30,500 periods included in the study, our portfolio models outperformed those advisor-managed portfolios 88% of the time.

Even if you don’t include or utilize the TacticalSHIFT® strategy, our models would have outperformed the average private client investor in almost all periods over the last decade. Click here to adjust and look at all the allocation model comparisons.

*excludes the iInvest .7% advisory fee

Betterment Stock Allocation

Investing in a 70% stock/30% bond portfolio since the end of Jan 2004 through the end of May 2017, would have produced a cumulative return of +130.0%. Assuming similar risk, your cumulative return would have differed from the average private client investor by +50.0%. Performance Disclosure Statement.

About the data

The benchmark advised portfolio performance data comes from the ARC Private Client Indices which aggregates actual performance delivered to private clients by more than 60 major global investment managers. You can read more about the ARC methodology here. The ARC data is broken up into four slices of equity risk, or Private Client Indices (PCIs.) It is available on a monthly basis, from January 2004 through the most recent completed quarter. This analysis focused on January 2004 through April 2014 (123 months) which offers 7626 possible periods (i.e. 123 possible one month periods, one possible 123 month period, and everything in between). For each of those 7626 periods, our technology partner compared the closest equivalent portfolios with each of the four PCIs, resulting in 30,504 comparisons. They ran our 30%, 50%, 70% and 90% stock portfolios against the Cautious, Balanced, Steady Growth, and Equity Risk PCIs, respectively. The iInvest® portfolios won 88.66% of the comparisons. Historical performance of our portfolios are based on the underlying ETFs, always net of fees. To the extent that an ETF was not in existence over the relevant period, performance is based on the index or asset class that the ETFs tracks. For full disclosure on how this historical performance is computed, see here.

ETFs are subject to market risk, including the possible of principal. The value of the portfolio will fluctuate with the value of the underlying securities. ETFs may trade for less than their net asset value (NAV). There is always a risk that an ETF will not meet its stated objective on any given trading day.

Low Costs

Low CostsExpense ratios well below the industry average.

Low Taxes

Funds that are typically the most tax-efficient.

Optimal Risk

Exposure across domestic and international markets.

TacticalShift®

Our portfolio offerings and tax-efficient investment management technologies and strategies are automated and flexible, enabling iInvest® to provide our clients with personalized investment strategies, including our TacticalSHIFT® strategy, which is designed to move more assets away from stocks (become more conservative) during periods of high market risk, then ultimately back to each client’s individual portfolio model when the risk is reduced. Learn more here.

Contact us today if you have any questions about our financial planning services or tools.