Custom Portfolios

A Custom portfolio lets you edit the holdings of a Betterment-built portfolio or build one from scratch, all with Betterment’s automated management and tax optimization built right in. To change your current Betterment portfolio strategy (Core, Socially Responsible Investing, etc.) to a Custom portfolio, follow these steps. Custom portfolios are available in individual taxable, IRA, joint taxable, and trust taxable accounts. They are not available in 401(k) accounts. If your account is part of ...

Start by opening a new automated investing account and select an individual, joint, or trust taxable, or IRA legal account type. When you're asked to choose a portfolio strategy, select "Custom portfolio." From there, you can either start from scratch, searching for and adding securities and setting a target percentage for each, or import a pre-built model portfolio as a starting point and customize it. The same builder is available if you'd like to edit your portfolio later.

Custom portfolios are available for individual taxable, joint taxable, and trust taxable as well as IRA accounts. Custom portfolios are not available for 401(k), Solo 401(k), or HSA accounts.

You can choose from the same broad universe of securities available through Betterment's self-directed investing. Mutual funds aren't supported.

No, auto-adjust is not an eligible feature for Custom portfolios. You’re in control of how you want your allocations to change over time, if at all.

If you would like us to add a ticker that we do not support today, please send an email to support@betterment.com, and we will review the request to see if we can accommodate the addition.

Yes. As you build or edit your portfolio, Betterment generates insights on your allocation, sector exposure, and geographical region exposure, highlighting any concentrations and potential impacts. These insights don't include recommendations and don't factor in your personal financial situation, nor your Betterment or other external financial accounts.

You'll see a breakdown of your portfolio by allocation, sector, and geographical region. We’re working on adding additional analysis in the meantime.

Custom portfolios are an evolution of the Flexible Portfolio experience. The biggest differences: the universe of investments to choose from has increased, and exposure analytics and AI insight are available as you build. Additionally, rebalancing works at the individual position level instead of across multiple tiers, and the portfolio is framed as "client-directed" since you choose each holding.

A Custom Portfolio is a managed portfolio you build yourself by choosing individual stocks and ETFs and setting a target weight for each one, rather than picking one of Betterment's pre-built strategies. Once it's set up, Betterment manages it just like any other portfolio: rebalancing, dividend reinvestment, tax features, and fractional shares all apply.

Betterment adjusts forward-looking projections so that a single stock position doesn't distort them. You can learn more about how we project single stocks in our Goal Projection and Advice Disclosure.

Betterment automatically adjusts your portfolio to reflect corporate actions like these, and you'll be notified of material changes.

Betterment votes on your behalf for every security in your account. For holdings that exist only in a Custom portfolio, Betterment follows the voting recommendations of Glass Lewis, one of the two leading proxy advisory firms, which researches each ballot item.

Betterment doesn't issue a specific "warning." Instead, the AI analysis built into the portfolio builder points out certain concentrations and explains potential impacts.

Custom portfolios carry the same 0.25% annual wrap fee as Betterment's other managed accounts. That fee is never charged on your cash position.

Yes. Fractional shares let your account hold every security you've selected at its target weight, even if your account balance is small.

Each position in your portfolio is rebalanced by individual holding once it drifts from its target weight, rather than needing broader asset-class or strategy-level drift to trigger a trade. Your whole portfolio has a 7% drift threshold. Target weights are fixed until you change them; they don't shift over time the way they would with auto-adjust.

Yes. Custom Portfolios target a small operational cash allocation of 0.5% held at Program Banks that does not earn interest (this is the same as other managed portfolios); when there are fees, withdrawals, or other portfolio management actions, this cash will be used first. The 0.5% cash allocation is required, so when you set your target weights to add up to 100% in the builder, Betterment scales each holding down slightly to make room.

Yes. Flexible Portfolio accounts transition to Custom portfolios. This applies to IRAs, individual taxable, joint, and trust taxable accounts. 401(k) and HSA accounts will migrate when these account types are supported.

If moving your account wouldn't create a meaningful tax impact, it transitions immediately. If it would, Betterment turns off rebalancing and gradually adjusts your portfolio toward its new target using a capital-gains budget, so the change happens without generating unwanted gains.

Yes, in some cases. A Custom portfolio can be the portfolio strategy in a Tax-Coordinated Portfolio (TCP) when the other accounts in the TCP are IRAs or taxable accounts. Custom portfolios are not available for 401(k) or HSA accounts, so a TCP that includes a 401(k) or HSA cannot use a Custom portfolio.

Tax-loss harvesting is available for certain ETFs, but not for individual stocks, since selling a stock you specifically chose to hold may not match your intent. Eligible ETFs may be assigned secondary ETFs, and when your position in one is sold, the secondary is purchased so your portfolio stays invested.

Yes. Betterment shows you a Tax Impact Preview any time you edit your strategy or change your allocation.