Betterment continues its transformation into a traditional financial services provider. The robo advisor, which used to take a much more aggressive stance against incumbent Wall Street firms, announced Wednesday that it will now offer a smart beta portfolio from Goldman Sachs Asset Management and an income-based strategy from BlackRock. In a statement, Betterment founder and CEO Jon Stein said the additional strategies are designed to serve Betterment’s increasingly diverse customer base. The GSAM strategy will allocate heavily towards emerging markets and small-cap stocks, incorporate REITs, and invest in high-yield bonds with longer durations than Betterment’s core portfolio strategy. The BlackRock strategy is designed for clients averse to the stock market but still want higher returns than cash, and will invest 100 percent of assets into U.S. bonds and international bonds issued in U.S. dollars.
It seems that younger investors have taken quite a liking to exchange traded funds, more so than older counterparts. Charles Schwab recently released the results of an annual study that found 56 percent of millennial investors see ETFs as their investment of choice. This number drops as the age of polled investors rises. Forty-four percent of Generation X investors favored ETFs, while only 30 percent of baby boomers and 23 percent of senior investors felt similarly. Schwab surveyed 1,200 individual investors with at least $25,000 in assets aged 25 to 75. Across all respondents, 42 percent said ETFs will be their primary investment vehicle in the future, up from 28 percent last year. Some experts have actually warned investors of ETFs’ flexibility and intraday-trading capabilities. ETFs are only expected to grow in popularity, too; 45 percent of polled investors expect to increase their investments in ETFs within the next year. Sixty-three percent of millennials expect ETFs to be their primary investment vehicle in the future.
Connecticut Union Targets the Wealthy
A labor union in Connecticut has created a television ad calling on the wealthy to pay their fair share and suggesting higher taxes for the rich. According to WSFB.com, the commercial from SEIU 1199 and produced by Metro Square Media features CareCentrix CEO John Driscoll calling on legislators to "ask millionaires and corporations to pay their fair share." Driscoll is a member of Patriotic Millionaires, a group of politically active high net worth Americans.
