Complex Product Disclosure

Some securities available in Custom Portfolios are complex financial products; investments with features, strategies, or payout structures that are more difficult to understand than traditional stocks, bonds, or broadly diversified funds. Their structure can affect performance in unintuitive ways, and their returns can depend on formulas, alternative assets (such as crypto), derivatives, leverage, or inverse exposure that increase the risk of loss. Complex products may carry one or more of the following additional risks, which increase the risk of loss:

• their performance can differ significantly from the index, asset class, or market sector they track, or their past performance
• they can be more volatile, with large gains or losses over short periods of time
• they can be designed to meet short-term objectives and become riskier if held for longer periods
• they can be less liquid, harder to value, or more difficult to sell
• they can involve exposure to derivatives, alternative assets (including cryptocurrency) or other instruments that increase complexity and risk
• their fees, expenses, or tax treatment can be complex and reduce returns

Exchange-traded funds (ETFs) that offer leverage or that are designed to perform inversely to the index or benchmark they track—or both—are highly complex financial instruments that are typically designed to achieve their stated objectives on a daily basis. These complex financial products include ETFs that are leveraged, inverse, volatility-linked, leveraged inverse, leveraged volatility, inverse volatility, and/or leveraged inverse volatility. Due to the effects of compounding, their performance over longer periods of time can differ significantly from their stated daily objective. Complex ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets. Holding them for longer than one day can increase your risk even further. These products are also volatile, can cause considerable losses, and may not be suitable for all investors. Learn more about a specific product in its prospectus and more about these products on FINRA’s website.

You should understand the risks of complex products before you invest, please carefully review the product’s prospectus, offering documents, and any other available disclosures before investing.

Custom Portfolios is a client-directed product. You are responsible for choosing the investments in your portfolio, including whether to incorporate any complex product. Betterment provides ongoing portfolio management of your Custom Portfolio and information, but you remain responsible for determining how assets in your Custom Portfolio fit within the context of your overall portfolio and any external accounts held outside of Betterment. See Betterment’s Custom Portfolio disclosure for more information.