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Portfolio Strategy

New Portfolio, Now Live

With this portfolio update, we have blended the best of investment finance with the best engineering to drive efficiency and performance.

Articles by Betterment Editors

By the Editorial Staff
Betterment Resource Center  |  Published: December 18, 2013

Betterment's portfolio optimization will enhance performance through better asset allocation.

Get the details of what's inside the new portfolio. Learn more here.

We are proud to announce that your portfolio has been optimized for better risk-adjusted expected returns. While many of the new enhancements are under the hood, you will be able to see the improved selection of bonds when you look at the “Portfolio” tab of your account.

Over the last year, Betterment has more than tripled assets under management. In that time, we have cemented our status at the most trusted online investment manager by attracting many times more customers than any other fully automated online investment platform. We thank you for that.

Read more about our new portfolio here

Optimal asset allocation to drive performance

We have been working for several months to ensure that this transition is seamless. With this portfolio update, we have blended the best of investment finance with the best engineering to create more efficiency and better expected returns.

On the investment side, we used powerful computational models to drive better performance through optimal asset allocation. We did three important things to the investments: We added more assets, improved diversification, and created a smarter way to allocate assets at any level of risk. (We did not change any of the stock funds at this time.)

On the engineering side, we built a new trading system and ran massive optimization simulations to support the new portfolio. The engineering done for the new portfolio also laid the groundwork for future enhancements, as Betterment continues to expand and customize its offerings in the future.

The result is a portfolio that is optimally diversified across 12 asset classes—and should provide on average 0.57% outperformance compared to our old portfolio.


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