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Introducing the Betterment 401(k) mutual fund lineup

Learn more about Betterment's curated lineup of low-cost mutual funds.

By Josh Shrair

Investment Strategist, Betterment |

Published Oct. 23, 2025

Introducing the Betterment 401(k) mutual fund lineup Oct 23, 2025 1:33:35 PM Learn more about Betterment's curated lineup of low-cost mutual funds. Key takeaways: Betterment 401(k) plans now offer a curated mutual fund lineup. Funds span major asset classes—U.S. and international stocks, bonds, and REITs. Target date funds offer built-in diversification that adjusts as employees near retirement. Betterment acts as a 3(38) fiduciary, selecting and monitoring cost-effective options. The lineup features top fund families like Vanguard, Fidelity, iShares, Schwab, and State Street. We’re excited to introduce mutual funds to Betterment 401(k) plans, giving you more ways to invest for your retirement goals. Our new mutual fund lineup offers a range of professionally managed options that make it easy to stay diversified. Each fund provides exposure to different parts of global stock and bond markets, giving you flexibility to build a customized portfolio—or simply choose a target date fund that automatically adjusts as you get closer to retirement. Here’s what you need to know about how these funds work and what’s available in your plan. Please note: Your plan may use our managed ETF portfolios or a customized fund menu from a third-party advisor. Log in to see what investment options are available in your plan. What are mutual funds? Mutual funds are professionally managed funds that pool investor dollars into a diversified portfolio of stocks, bonds, or both. They give individuals and institutions an easy way to access different parts of the global market without having to purchase each security individually. With a single mutual fund, investors can gain exposure to dozens or even hundreds of securities, helping to spread risk and simplify portfolio management. Additionally, mutual funds come in different flavors, from broad market funds (i.e. the entire international developed market) to more niche (i.e. U.S. small cap value stocks). Mutual funds represent 65% of assets held in 401(k) plans, or over $5T, as of 2024. One type of mutual fund commonly used in 401(k) plans is the target date fund, which offers an easy, built-in way to stay diversified and prepare the investor for retirement. This fund, with its glidepath approach, automatically de-risks over time, as participants near the “target” retirement year. Asset allocation becomes more conservative as participants near retirement, with more exposure to bonds rather than stocks to preserve capital. How Betterment builds and monitors your investment fund lineup As your investment fiduciary, the Betterment Investing team designs, selects, and monitors the mutual funds in your 401(k) plan—making changes as needed. To build the lineup, we review a wide range of mutual funds across the industry and group them by market type (for example, U.S. large-cap stocks or international bonds). We then evaluate funds based on cost, quality, and effectiveness, focusing on those that provide strong market exposure at a low cost. Funds with extra fees or unnecessary charges are filtered out through our internal cost of ownership review. For target date funds, we use the same cost-focused approach while also considering additional factors, such as the glidepath. Betterment selects a cost-effective option, managed by an experienced firm that uses similar strategies to Betterment’s own glidepath. As part of our fiduciary responsibility and oversight, Betterment monitors the funds on an ongoing basis. This consists of quarterly reviews of performance and market exposure. If the Investing team identifies a more suitable mutual fund, either from a cost, performance, or asset class exposure perspective, Betterment’s Executive Investment Committee will implement changes as necessary. What is available in my mutual fund lineup? Now that you have a sense of the process Betterment takes to design, select, and monitor your mutual fund lineup, you probably want to know what is available to invest in. Today, the Betterment 401(k) mutual fund lineup consists of more than 20 index (or passive market tracking) mutual funds managed by Vanguard, Fidelity, iShares, Schwab, and State Street as well as a target retirement fund series managed by Vanguard. More specifically, the exposures available in the mutual fund lineup are composed of: U.S. stock funds with exposures to large-, mid-, and small-cap stocks and more specific options for growth, value, or blend stocks International stock funds with exposure to both international developed and emerging markets U.S. bond funds with exposure to corporate, treasury, and inflation protected bonds International bond funds with exposure to both international developed and emerging markets regions REIT (real estate investment trust) funds providing exposure to U.S. and international markets Money market fund A professionally managed target date fund series While the above represents the methodology and exposures of the Betterment mutual fund lineup, keep in mind that your plan may have different investment options. Log in to your account to see what is available for your 401(k) plan.

Key takeaways:

Betterment 401(k) plans now offer a curated mutual fund lineup.
Funds span major asset classes—U.S. and international stocks, bonds, and REITs.
Target date funds offer built-in diversification that adjusts as employees near retirement.
Betterment acts as a 3(38) fiduciary, selecting and monitoring cost-effective options.
The lineup features top fund families like Vanguard, Fidelity, iShares, Schwab, and State Street.

We’re excited to introduce mutual funds to Betterment 401(k) plans, giving you more ways to invest for your retirement goals. Our new mutual fund lineup offers a range of professionally managed options that make it easy to stay diversified. Each fund provides exposure to different parts of global stock and bond markets, giving you flexibility to build a customized portfolio—or simply choose a target date fund that automatically adjusts as you get closer to retirement. Here’s what you need to know about how these funds work and what’s available in your plan.

Please note: Your plan may use our managed ETF portfolios or a customized fund menu from a third-party advisor. Log in to see what investment options are available in your plan.

What are mutual funds?

Mutual funds are professionally managed funds that pool investor dollars into a diversified portfolio of stocks, bonds, or both. They give individuals and institutions an easy way to access different parts of the global market without having to purchase each security individually. With a single mutual fund, investors can gain exposure to dozens or even hundreds of securities, helping to spread risk and simplify portfolio management. Additionally, mutual funds come in different flavors, from broad market funds (i.e. the entire international developed market) to more niche (i.e. U.S. small cap value stocks).

Mutual funds represent 65% of assets held in 401(k) plans, or over $5T, as of 2024. One type of mutual fund commonly used in 401(k) plans is the target date fund, which offers an easy, built-in way to stay diversified and prepare the investor for retirement. This fund, with its glidepath approach, automatically de-risks over time, as participants near the “target” retirement year. Asset allocation becomes more conservative as participants near retirement, with more exposure to bonds rather than stocks to preserve capital.

How Betterment builds and monitors your investment fund lineup

As your investment fiduciary, the Betterment Investing team designs, selects, and monitors the mutual funds in your 401(k) plan—making changes as needed.

To build the lineup, we review a wide range of mutual funds across the industry and group them by market type (for example, U.S. large-cap stocks or international bonds). We then evaluate funds based on cost, quality, and effectiveness, focusing on those that provide strong market exposure at a low cost. Funds with extra fees or unnecessary charges are filtered out through our internal cost of ownership review.

For target date funds, we use the same cost-focused approach while also considering additional factors, such as the glidepath. Betterment selects a cost-effective option, managed by an experienced firm that uses similar strategies to Betterment’s own glidepath.

As part of our fiduciary responsibility and oversight, Betterment monitors the funds on an ongoing basis. This consists of quarterly reviews of performance and market exposure. If the Investing team identifies a more suitable mutual fund, either from a cost, performance, or asset class exposure perspective, Betterment’s Executive Investment Committee will implement changes as necessary.

What is available in my mutual fund lineup?

Now that you have a sense of the process Betterment takes to design, select, and monitor your mutual fund lineup, you probably want to know what is available to invest in. Today, the Betterment 401(k) mutual fund lineup consists of more than 20 index (or passive market tracking) mutual funds managed by Vanguard, Fidelity, iShares, Schwab, and State Street as well as a target retirement fund series managed by Vanguard.

More specifically, the exposures available in the mutual fund lineup are composed of:

U.S. stock funds with exposures to large-, mid-, and small-cap stocks and more specific options for growth, value, or blend stocks
International stock funds with exposure to both international developed and emerging markets
U.S. bond funds with exposure to corporate, treasury, and inflation protected bonds
International bond funds with exposure to both international developed and emerging markets regions
REIT (real estate investment trust) funds providing exposure to U.S. and international markets
Money market fund
A professionally managed target date fund series

While the above represents the methodology and exposures of the Betterment mutual fund lineup, keep in mind that your plan may have different investment options. Log in to your account to see what is available for your 401(k) plan.