What funds are in my portfolio?

The Betterment Portfolio is comprised of a combination of globally-diversified stock and bond ETFs that aim to efficiently capture the broad U.S. stock market, as well as international developed and emerging markets. We selected these ETFs based on their liquidity, diversification, and low management fees.

Your money is invested in thousands of companies through fractional shares. Exactly how much of your portfolio is made up of which stocks and bonds depends on your portfolio’s exact target allocation, so some funds in our portfolio strategy only appear in certain stock-to-bond allocations. For example, if your portfolio is set to 100% bonds, you will not see any of the stock ETFs that are included in the Betterment Portfolio.

While logged in, choose a specific investing goal and then go to the Portfolio Analysis tab to see your specific asset classes and the underlying ETFs for that goal.

Stocks / Equities

Our expert analysis divides stocks into two classes—developed markets and emerging markets. As a developed market, U.S. stocks can often be traded at lower costs, so our portfolio construction specifies them separately.

U.S. Total Stock Market

This set of holdings offers broad exposure to stocks in the U.S. Market. American companies represent a significant portion of developed market stocks, and when a portfolio balances U.S. stocks with international developed market and emerging market stocks, it can attain greater diversification. U.S. stocks tend to correlate with other developed markets, but by purchasing these components separately, Betterment can more effectively control attributes of a given portfolio, such as risks, returns, and taxes.

VTI is the primary ETF used to gain exposure to the entire U.S. stock market. Our secondary ETFs, SCHB and ITOT, which also have low expense ratios, are highly correlated with VTI. Betterment’s use of secondary ETFs enables Tax Loss Harvesting+™.

U.S. Value Stocks - Large Cap

This set of holdings is one of three that offers exposure to value stocks of certain sizes. Size and value are two factor tilts of Betterment’s portfolio optimization that aim to drive higher expected returns. While stocks of good value and appropriate size exist in other geographic markets, Betterment expresses these portfolio tilts only in the U.S. because international funds with value and size tilts currently are too expensive to maintain Betterment’s low average costs. U.S. Large Cap stocks can be defined as those in the top 70% of the capitalization of the U.S. stock market. Value stocks are those that trade at a lower price relative to their dividends, earnings and/or sales than the average stock.

VTV is the primary ETF used to gain value stock exposure among companies with a large capitalization. Our secondary ETFs, SCHV and SPYV, are highly correlated with VTV. SCHV and SPYV both have similarly low expense ratios compared to VTV. Betterment's use of secondary ETFs enables Tax Loss Harvesting+.

U.S. Value Stocks - Mid Cap

This set of holdings is one of three that offers exposure to value stocks of certain sizes. Size and value are two factor tilts of Betterment’s portfolio optimization, which aims to drive higher expected returns. While stocks of good value and appropriate size exist in other geographic markets, Betterment expresses these portfolio tilts only in the U.S. to maintain low costs. U.S. Mid Cap stocks are typically defined as those companies typically between $1 billion and $8 billion in market capitalization in the United States. Value stocks are those that trade at a lower price relative to their dividends, earnings and/or sales than the average stock.

VOE is the primary ETF used to gain value stock exposure among companies with a medium capitalization. Our secondary ETFs, IWS and IJJ, are highly correlated with VOE. VOE is the primary recommendation since it has the lowest expense ratio and tightest bid-ask spread. Betterment’s use of secondary ETFs enables Tax Loss Harvesting+™.

U.S. Value Stocks - Small Cap

This set of holdings is one of three that offers exposure to value stocks of certain sizes. Size and value are two factor tilts of Betterment’s portfolio optimization that aims to drive higher expected returns. While stocks of good value and appropriate size exist in other geographic markets, Betterment expresses these portfolio tilts only in the U.S. to maintain low costs. U.S. Small Cap stocks typically grow at a faster pace than the typical company, and tend to represent an often-volatile segment of the market. Value stocks are those that trade at a lower price relative to their dividends, earnings and/or sales than the average stock.

VBR is the primary ETF used to gain value stock exposure among companies with a small capitalization. Our secondary ETFs, IWN and SLYV are highly correlated with VBR. VBR is the primary recommendation since it has the lowest expense ratio. Betterment’s use of secondary ETFs enables Tax Loss Harvesting+™.

International Developed Market Stocks

This set of holdings offers exposure to a broad collection of stocks from non-U.S. developed markets such as the United Kingdom, the European Union, Japan, and others. Generally, developed market stocks have a similar risk and return profile as the U.S. Total Stock Market. Greater portfolio diversification can be achieved with allocations to emerging market stocks and bonds in addition to international developed market stocks.

VEA is the primary ETF used to gain exposure to international developed market stocks. Our secondary ETFs, SCHF and IEFA, are highly correlated with VEA. VEA is the primary recommendation since it has the lowest expense ratio and tightest bid-ask spread. The secondary ETFs enable Tax Loss Harvesting+™.

International Emerging Market Stocks

This set of holdings offers exposure to a broad collection of stocks from emerging markets, such as China, Taiwan, India, Brazil, Russia, Thailand, and South Africa, among others. International Emerging Market Stocks generally involve higher expected risk compared to Developed Market Stocks, but may lead to higher growth as developing states modernize and gain wealth. Emerging market stocks are less correlated with U.S. Stocks and other developed market stocks, which makes them an important part of a diversified portfolio.

VWO is the primary ETF used to gain exposure to stocks in international emerging markets. Our secondary ETFs, IEMG and SPEM, are highly correlated with VWO. Betterment’s use of secondary ETFs enables Tax Loss Harvesting+™.

Bonds / Fixed Income

The bond portion of the portfolio includes governmental, agency, and corporate bonds from around the globe. We also include cash-like, low-risk bonds to help manage the expected risk for conservative allocations.

U.S. High Quality Bonds

U.S. High Quality Bonds provide exposure to the U.S. investment-grade bond market, bringing stability to portfolios, while offering higher cash income than U.S. Treasury bonds alone. The underlying bonds in this set of holdings have been rated no lower than BBB- by Standard and Poor’s, or Baa3 by Moody’s, minimizing credit risk. U.S. High Quality Bonds are still subject to interest rate risk. These bonds are offered by the U.S. government and high-quality U.S. corporations, and also could be comprised of mortgage-backed securities. The average bond maturity of the underlying bonds in this individual asset class is 8 years.

AGG is the primary ETF used to gain exposure to U.S. High Quality bonds, due to its low bid-ask spread. For goals with Tax Coordination™ enabled, MUB is used as the primary ETF in taxable accounts to increase tax efficiency.

U.S. Municipal Bonds

U.S. Municipal Bonds are only included in taxable portfolios, since the interest from them is generally federally tax-exempt. The underlying bonds are issued by state and regional governments to finance capital expenditures, such as infrastructure spending. While municipal bond credit risk is slightly higher than risk-free U.S. Treasuries, it still remains very low, which is attractive for risk-averse investors. This characteristic, coupled with favorable federal tax treatment, makes municipal bonds an excellent addition to taxable portfolios.

MUB is the primary ETF used to gain exposure to U.S. Municipal bonds, due to its relatively high liquidity. Our secondary ETF, TFI, is similar to MUB but has a slightly higher bid-ask spread. Betterment’s use of secondary ETFs enables Tax Loss Harvesting+™ and Tax Coordination™.

U.S. Inflation-Protected Bonds

U.S. Inflation Protected Bonds are issued by the U.S. Treasury with the value of the principal (but not interest payments) indexed to inflation. This set of holdings serves to insulate a part of the portfolio from the depreciating effects of inflation, while also offering historically low correlation with other types of bonds, helping to achieve greater diversification. Additional diversification in a bond portfolio adds a layer of protection during market downturns.

VTIP is the selected ETF used to gain exposure to U.S. Inflation-Protected Bonds due to its competitive bid-ask spread, low expense ratio, and robust asset base.

U.S. Short-Term Treasury Bonds

U.S. Short-Term Treasury Bonds are issued by the U.S. Treasury with short maturity terms between one month and one year, offering extremely low risk exposure. Generally, U.S. Short-Term Treasury Bonds are considered a cash alternative, generating nominal benefit through interest payments. At lower stock allocations, these bonds, with U.S. Short-Term Investment-Grade Bonds, help to decrease the risk of an overall portfolio.

The selected ETF for U.S. Short-Term Treasury Bonds is GBIL, due to its competitive expense ratio.

U.S. Short-Term Investment-Grade Bonds

U.S. Short-Term Investment-Grade Bonds are U.S. dollar-denominated, high credit quality bonds and other debt instruments issued by corporations and governments. These securities have maturities of less than three years. Generally, U.S. Short-Term Investment-Grade Bonds are low-risk investments with slightly higher yields than US Treasury bills. At lower stock allocations, these bonds, with U.S. Short-Term U.S. Treasury Bonds, help to decrease the risk of an overall portfolio.

The selected ETF for U.S. Short-Term Investment-Grade Bonds is JPST, due to low expense ratios and trading costs.

International Developed Market Bonds

International Bonds are issued by non-US developed market governments and organizations, largely in Europe and the Pacific regions. The bonds in this set of holdings have high credit quality and provide worldwide interest diversification for a bond portfolio, which helps to mitigate risk. These bonds are issued by a variety of countries and corporations to finance various spending needs, and the likelihood of default by these issuers is relatively low.

The selected ETF for International Developed Market Bonds is BNDX, due to its competitive expense ratio.

International Emerging Market Bonds

International Emerging Markets Bonds are dollar-denominated bonds issued by governments with economies that are rapidly growing and industrializing. This component offers higher expected returns than other types of bonds in the portfolio due to higher expected risk. Their unusually low correlation with other bonds results in higher risk-adjusted expected performance for the bond portion of a portfolio.

EMB is the primary ETF used to gain exposure to International Emerging Market Bonds, due to its low expense ratio, tight bid-ask spread, and high level of market liquidity. Our secondary ETFs, VWOB and PCY, are similar to EMB. Betterment’s use of secondary ETFs enables Tax Loss Harvesting+™.