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Betterment's Socially Responsible Investing portfolios methodology

The Goldman Sachs Smart Beta portfolio methodology

Three blockbuster IPOs are launching. Here's when they'll land in your portfolio.

Three blockbuster IPOs are launching. Here's when they'll land in your portfolio. Jun 15, 2026 5:20:03 PM SpaceX, OpenAI, and Anthropic are going public and selling billions in stock. Before you chase the buzz, read up on the backstory. Key takeaways Several high-profile, private companies are going public in 2026, headlined by SpaceX, OpenAI, and Anthropic. Many major indexes will fast-track these companies for inclusion within weeks of their debuts. The S&P 500, however, requires a year of seasoning and strict profitability criteria. Betterment customers have multiple on-ramps to invest in them via both automated and self-directed investing. IPO excitement can inflate opening prices, which makes it hard to come out ahead. There's a case for letting the market do its stress-testing first. As these mega-cap companies join an already tech-heavy market, diversification across sectors and geographies matters more than ever. The aerospace juggernaut SpaceX smashed records with its recent initial public offering (IPO), turning a slice of the once-private company's trillions in theoretical valuation into real, tradeable stock. It raised plenty of capital—and questions—in the process, so let’s dive in and sort through what it all means for everyday investors like yourself. Wait, what’s an IPO again? An IPO is when a privately-held company goes public, selling ownership in the open market as a way to both raise money and give earlier investors a chance to “exit” and realize a return. A trio of splashy technology IPOs headline this year: not just SpaceX, but two of the biggest brand names in AI: OpenAI and Anthropic. Both are targeting IPOs for later in 2026. Taken altogether, the three could be worth more than $3 trillion, though only a portion of that value will initially come to market. That public stock would still be substantial, so the companies and their underwriters are being deliberate about how many shares they offer upfront. Before we get to how many, however, let's look at the more pressing question: how soon might these newly-public companies show up in your portfolio? Indexes are fast-tracking the trio for inclusion, with one BIG exception Stock indexes are simply lists, or put another way, they’re the ingredient lists that index funds base their allocations on. These index funds can provide a cheaper and easier way to diversify, letting you passively invest with the aim of matching market returns. But the lists themselves aren’t open-sourced. They’re strictly owned and operated, with specific rules for how quickly new businesses on the block can gain entry. Mega-cap companies (those with valuations of $200 billion or more) are testing the limits of those rules. These tech companies could make their way into many notable indexes within weeks, if not days, of going public—including the Russell 1000, with $2 trillion of funds tied to it, and the CRSP US Large Cap Index, with $1.8 trillion indexed. But the mother of all indexes, the S&P 500, isn’t budging. It represents nearly half the value of all the investable stocks in the world, and nearly $12 trillion worth of funds follow its script. And those big institutional investors aren’t keen on passively buying brand new stocks whose valuations haven’t been stress-tested. The S&P 500 has strict profitability rules companies must pass before being eligible for inclusion, rules created after the dot-com bubble, and a 12-month waiting or “seasoning” requirement to boot. So how does all of this translate into your investing? Betterment customers can set their own launch window These IPO darlings will take a while to show up in the S&P 500, but Betterment customers still have several avenues for investing in them sooner rather than later. Most of our expert-built, curated portfolios—Value Tilt, Innovative Tech, Socially Responsible Investing, and Goldman Sachs Smart Beta—utilize index funds that have a higher likelihood of listing these companies within weeks of them going public. Our Core portfolio, on the other hand, primarily gets its U.S. stock exposure through funds that track S&P indexes, so inclusion will come farther down the road. If you self-direct your investing at Betterment, you can buy applicable funds themselves, or in many cases you can buy the companies directly as single stocks shortly after they begin trading. And in the coming weeks, we’ll also be introducing Custom portfolios, which pair the flexibility of self-directed investing with the power of our automation and tax-saving technology. This new investment option will replace our Flexible portfolio and let investors slot those funds or single stocks into their portfolios themselves. All this being said, trading in these freshly-minted equities often comes with heightened volatility and additional risk. The buzz and buildup to their IPOs can drive up their opening prices, making it tough to exceed expectations and net out in the positive. Morningstar, for one, believes SpaceX’s initial offering was overvalued. There's no shame in waiting for these companies to organically work their way into a globally-diversified portfolio. In fact, there's a strong argument for it. By then, you’d be buying at a price the market has had time to test, and you’d own them as part of a portfolio that doesn’t hinge on any single rocket launch. The tech-centric stock market is about to get more techy Diversifying across continents and industries is all the more important given the increasing concentration of the stock market. Technology already accounts for more than 44% of the S&P 500, and the arrival of several mega-cap tech and tech-adjacent IPOs in 2026 could push that share even higher. Fortunately, the full value of these companies won’t be going public. They’ll make a portion of shares available to the public in what’s known as “float,” with the remaining still owned by company insiders, employees, and the angel investors and venture capitalists who helped fund early stages of growth. SpaceX, for example, offered “only” $85.7 billion of shares in its IPO. It’s this public stock that informs how big a slice of indexes they’ll make up, and that number is still sizable. Increased concentration in any single sector, especially one driven by a relatively small number of mega-cap names, can amplify both gains during favorable market conditions and drawdowns during corrections. But that’s why Betterment exists. We’re here to do the heavy lifting of asset allocation, and help you sleep a little more soundly, no matter what starry-eyed headlines these IPOs generate.

Big traders have a built-in edge. So we engineered one for everyone.

Big traders have a built-in edge. So we engineered one for everyone. Jun 9, 2026 12:33:56 PM Individual investors have long faced structural disadvantages. Here's how Betterment's trading team and custom-built platform help close that gap. Key takeaways The trading system has long been tilted in favor of large institutional investors. Betterment's custom-built trading platform was designed to change that, harnessing the collective power of our customers. We pool your orders with other customers' to unlock the kind of bulk-order pricing big trading desks take for granted. The result: Betterment customers, whether you self-direct or automate your investing, get a fairer shake in the market. For everyday investors, the mechanics of trading haven’t always resulted in a fair fight. That’s because markets tend to reward size and speed. Large institutional investors—think hedge funds, pension funds, endowments—trade in enormous volume. And when you routinely show up with big trading orders, you tend to get preferential treatment. Those privileges get even bigger during bouts of volatility, or when trading activity is thin and buyers and sellers are harder to find. If you're a solo investor wading into those waters, you're swimming upstream. Betterment’s trading platform, however, was designed to harness the collective power of our customers. Here's how. We set price guardrails on your trade, so market chaos doesn’t cost you One of the key aspects of our trading execution methodology is the type of order we use to execute your trades. In many cases, Betterment uses marketable limit orders, which set a price ceiling (or floor) for every trade. They're designed to execute or “fill” quickly, but won't do it at a price worse than the limit. It's a guardrail that keeps the market's momentary chaos from working against you. Limit orders are one of the tools we use in pursuing "best execution," a regulatory standard that requires us to seek the most favorable terms reasonably available for your trade. Your trade packs a bigger punch—because it's not alone It’s a familiar concept for anyone who’s stepped foot in a Costco. When a seller knows you're ordering at volume, they're more motivated to give you their best price. The same logic applies in trading. Betterment aggregates customers' orders, combining similar buys (or sells) of the same security before sending them to market as a single, larger order. The crucial cutoff is generally 100 shares or more of any given stock or fund. These orders are known as “round” lots, the standard unit of trading that exchanges and market makers prioritize. Any order smaller than 100 shares, on the flip side, is generally considered an “odd” lot. The problem is solo investors struggle to come up with nice “round” lots on their own, and they end up paying more as a result. How much more? A 2021 analysis of more than 3 billion U.S. equity trades found that odd lot orders, even those falling just one share short of 100, experienced roughly 10% less price improvement than round lots. For a popular, heavily-traded fund like VTI, that can amount to thousands of dollars in lost gains over decades.1 1Example for illustrative purposes only, based on internally-derived simulations that reflect market behavior consistent with the cited peer-reviewed research. It does not represent actual performance. By banding your order together with the similar orders of other Betterment customers, we cross the round-lot threshold more often, which generally leads to better pricing. It’s important to note, however, that we don't delay your trade to chase a round lot. We aggregate when client orders naturally line up, and execute when they don't. Less predictable trading windows help you stay one step ahead High-frequency traders have made an industry of being first. By watching for signals in the market, like a sudden uptick in buy orders for a particular stock, they can race in ahead of you, buy what you were about to buy, and attempt to flip it for a profit before your trade even clears. It's exactly the sort of systemic disadvantage our custom-built trading technology works to help minimize. When orders are sent to market the instant they're placed, they can signal intent to anyone watching. Betterment, by contrast, batches orders into scheduled trade windows throughout the day, and we vary those windows across most of our trading activity. No predictable pattern means no easy target. This also works hand-in-hand with our bundling strategy above: the windows give us time to aggregate orders before sending them to market, making round-lot thresholds more attainable. There are always exceptions, of course. When timing is critical, like with day-end orders, we execute whatever lots are ready, odd or round, rather than wait for the next day. Prices can and do move while the market is closed, which is why we strive to process certain orders before the bell.2 Trade with confidence at Betterment Showing up to market as a solo investor can be rough. You’re a small fish in a very big pond. That’s where Betterment comes in. Whether you self-direct your investing or enlist our automated tech for help, you benefit from our custom-built trading platform. It pools your trades whenever possible, sets price guardrails, and chooses the moment deliberately. All so your trade gets a fairer shake, and you get more freedom to invest as you see fit.

Can a portfolio be too simple?

Can a portfolio be too simple? Jun 9, 2026 12:00:00 AM Total market funds offer simplicity, but by unbundling asset classes—and adding Betterment’s automation—you can make your money work harder. Key takeaways Single-fund portfolios are easy to build, but they’re harder to optimize for taxes and costs. Using multiple funds adds the flexibility to fine-tune allocations and unlock savings. Betterment’s automation and expert-built portfolios give you the best of both worlds: easy to invest in, and built to work harder. If you’re looking to build long-term wealth, you could do worse than investing in one or two low-cost, globally-diversified total market funds. But you could potentially do better—and spend less of your limited bandwidth—by using a few more pieces and putting our technology to work in your favor. That’s the value of Betterment’s automated investing and expert-built portfolios, and it begins with (surprise!) tax optimization. Harvesting losses for tax wins, and putting your assets in the right place Targeting more than a date Splitting hairs on fund fees, so customers can save millions Harvesting losses for tax wins, and putting your assets in the right place Tax-loss harvesting can help give your taxable investing an edge, and it happens when we sell and replace similar assets using available funds. The downside of a total market fund, however, is you have to wait for the entire fund to experience a loss. If only one piece of it dips, you can’t unbundle the assets and harvest that specific piece. It’s sell all, or sell nothing. That’s a big reason why we switched from using a single fund for U.S. stocks in our Betterment-built portfolios, opting instead for three separate funds representing small, medium, and large-sized U.S. companies. If one of them presents a harvesting opportunity, we can swap it for a similar alternative. The second area where larger fund lineups shine is asset location, or strategically divvying up your portfolio’s assets among traditional, Roth, and/or taxable accounts. Stocks with the highest potential for growth, for example, are often better-suited for traditional accounts. Let them grow tax-free, the thinking goes, then settle up with Uncle Sam when you’re retired and more likely to be in a lower tax bracket. Our mathematically-rigorous spin on asset location is called Tax Coordination, and it’s yet another way our automated investing helps you keep more of what you earn. To start taking advantage of it, simply open any combination of the three account types above and follow a few easy steps. Targeting more than a date One of the most common single-fund options for retirement savings are target date funds. They date back to the 90s and became the default option in many 401(k) plans starting in the late 2000s. The growth of target date funds has been a good thing for investors, helping move the industry toward lower-cost, automated investing. Prior to their arrival, advisors had to manually adjust the asset allocations or “glide paths” of portfolios over time. Similar to total market funds, however, the bundling of target date funds brings with it some constraints. The first constraint is their relative lack of choice. Say you were born in 1988 and are targeting a traditional retirement age of 62. Most target date fund managers give you one option—the 2050 fund. Our automated investing, on the other hand, gives you more than a handful of portfolios to choose from, including ones tailored for social responsibility and innovation. More funds also creates more levers to fine-tune your exposure, helping manage risk in all sorts of situations. Take bond-heavy portfolios as an example. Rising interest rates can erode their value, so we dial up their exposure to short-term corporate debt and U.S. Treasuries specifically to help hedge against that risk. Splitting hairs on fund fees, so customers can save millions The relatively high cost of target date funds has been trending downward, and many total market funds can be found for expense ratios of less than 0.1%. But we can squeeze out even more savings by splitting a portfolio up and shopping for better deals. A single one hundredth of a percentage point in fund fees (what’s referred to as a “basis point” or “bip” in investing lingo) may not sound like much, but we owe it to our customers to make every one count. You could pay 6 basis points (0.06%), for example, for a total world stock fund like VT. Or you could pay one-third of that for your U.S. stock allocation by breaking it up into three funds (SPYM, SPMD, and SPSM) like we do with our Core portfolio and others. Using our customers’ nearly $20 billion worth of U.S. stocks as an example, that would amount to roughly $7.6 million in combined savings each year. Flexibility to stretch your investing dollars even farther A simple portfolio can be a great place to start, but it’s not always where your money works hardest. By strategically using a few more funds, we can sprinkle tax advantages on more of your investing, optimize across account types, and potentially unlock even more cost savings. All automatically. You get the simplicity you want, but with our tech doing the heavy lifting behind the scenes.

Inside the investing kitchen, part 1

Inside the investing kitchen, part 1 Jun 8, 2026 12:00:00 AM The recipe for a better portfolio, and the science behind a safer nest egg. Jamie Lee isn’t a Top Chef, but he knows his way around the kitchen. He dabbles in sous vide with the help of a sous chef (his 6-year-old daughter). He loves smoking salmon low and slow on a pair of pellet grills. And in some ways, his day job on the Betterment Investing team resembles the culinary world as well. He and his teammates work in a test kitchen of sorts, defining and refining the recipes for our low-cost and globally-diversified portfolios. They size up ingredients, pair flavors, and thoughtfully assemble the courses of each “meal.” All in service of customers with varying appetites for risk. It's highly-technical work, but we wouldn't be Betterment if we didn't make our methodologies as accessible as possible. So whether you're kicking the tires on our services, or you're already a customer and simply curious about the mechanics of your money machine, come along for a three-part, behind-the-scenes look at how we cook up a better portfolio. Here in part 1, we'll explore how we allocate your investing at a high level. In part 2, we'll zoom in to our process for selecting specific funds. And in part 3, we'll show you how we handle thousands of trades each day to keep our customers’ portfolios in tip-top shape. The science behind a safer nest egg Betterment customers rely on Jamie and team to do the heavy lifting of portfolio construction. They distill handfuls of asset classes, a hundred-plus risk levels, and thousands of funds into a simple yet eclectic menu of investment options. This process applies to the invested (non-cash) portion of our portfolios, and underpinning much of it is something called Modern Portfolio Theory, a framework developed by the late American economist Harry Markowitz. The theory revolutionized how investors think about risk, and led to Markowitz winning the Nobel Prize in 1990. Diversification lies at the heart of Modern Portfolio Theory. The more of it your investing has, the theory goes, the less risk you're exposed to. But that barely scratches the surface. One of the meatiest parts of building a portfolio (and by extension, diversifying your investing) is how much weight to give each asset class, also known as asset allocation. Broadly speaking, you have stocks and bonds. But you can slice up the pie in several other ways. There’s large cap companies or less established ones. Government debt or the corporate variety. And even more relevant as of late: American markets or international. Jamie came of age in South Korea during the late 90s. Back here in the States, the dot-com bubble was still years away from popping. But in South Korea and Asia more broadly, a financial crisis was well underway. And it changed the trajectory of Jamie’s career. His interest in and application of math shifted from computer science to the study of markets, and ultimately led to a PhD in statistics. Jamie Lee (right) helps optimize the weights of asset classes in Betterment portfolios. For Jamie, the interplay of markets at a global level is fascinating. So it’s only fitting that when optimizing asset allocations for customers, Jamie and team start with the hypothetical "global market portfolio," an imaginary snapshot of all the investable assets in the world. The current value of U.S. stocks, for example, represents about two-thirds the value of all stocks, so it's weighted accordingly in the global market portfolio. These weights are the jumping off point for a key part of the portfolio construction process: projecting future returns. Reverse engineering expected returns “Past performance does not guarantee future results.” We include this type of language in all of our communications at Betterment, but for quantitative researchers, or “quants,” like Jamie, it’s more than a boilerplate. It’s why our forecasts for the expected returns of various asset classes largely aren't based on historical performance. They're forward-looking. "Past data is simply too unreliable," says Jamie. "Look at the biggest companies of the 90s; that list is completely different from today.” So to build our forecasts, commonly referred to in the investing world as Capital Market Assumptions, we pretend for a moment that the global market portfolio is the optimal one. Since we know roughly how each of those asset classes performs relative to one another, we can reverse engineer their expected returns. This robust math is represented by a deceivingly short equation—μ = λ Σ ωmarket—which you can read more about in our full portfolio construction methodology. From there, we simulate thousands of paths for the market, factoring in both our forecasts and those of large asset managers like BlackRock to find the optimal allocation for each path. Then we average those weights to land on a single recommendation. This “Monte Carlo" style of simulations is commonly used in environments filled with variables. Environments like, say, capital markets. The outputs are the asset allocation percentages (refreshed each year) that you see in the holdings portion of your portfolio details. At this point in the journey, however, our Investing team's work is hardly finished. They still need to seek out some of the most cost-effective, and just plain effective, funds that give you the intended exposure to each relevant asset class. For this, we need to head out of the test kitchen and into the market. So don’t forget your tote bag.

The behavioral case for bonds

The behavioral case for bonds Jun 4, 2026 12:00:00 AM How bonds can build a buffer that makes your portfolio more resilient, and you more likely to stay invested Key takeaways Bonds are loans investors make to companies, governments, and other entities in exchange for interest. Although their historical returns are lower than stocks, their relative stability makes them an ideal buffer during bouts of market volatility. Bonds can help investors stay in the game and preserve capital for the next market recovery. Betterment makes it simple to mix them into your portfolio now and adjust along the way. When most of us think about investing, we think about the flashy headlines of the stock market, the ups and downs of brand names and the companies behind them. Bonds, by contrast, can feel boring. But they’re often the unsung heroes of a well-balanced portfolio. They help smooth out your investing journey, making it more likely you stay in the wealth-building game. So, what exactly is a bond? At its simplest, a bond is a glorified loan, but one that you make, not the other way around. You’re lending your money to an entity (usually a company or government) for a set period, and in exchange, they promise to pay you back the full amount on a specific date, plus a little extra interest (aka “yield”) along the way. Bonds commonly break down along two lines: Investment-grade bonds — These are issued by less risky, more creditworthy entities and offer lower yields as a result. The U.S. government is one of the biggest players here—issuing tens of billions in Treasury bonds—but corporate bonds also play a role. High-yield bonds — Bonds issued by riskier, less creditworthy players (both corporate and government) and carrying higher yields in turn. These types of bonds are often under-represented in funds that track a pre-set list of bonds, meaning there’s more potential for higher returns with the right active management. For most of the 2010s, interest rates were stuck near zero, which meant bonds of all kinds weren't paying much. But the landscape has shifted since the pandemic. Since then, the "boring" part of your portfolio is actually working quite hard, offering yields that look a lot more attractive than they used to. Why bonds matter, regardless of your goal’s timeline If you’re in your 20s or 30s, you may think, “I’ve got 30 years to grow my money. Why not just go 100% stocks?” It’s not the craziest idea. Over longer periods, stocks generally outperform bonds. But investing isn't just a math problem; it's a psychology problem. The real danger to your wealth isn't a market dip—it's you hitting the "sell" button during a market dip because the choppy waters feel like too much to bear. Bonds can help calm the storm in this sense. When the stock market has a bad week (or a bad year), they tend to hold more of their value, or even gain in value. They also generally continue to pay out interest. This in theory means your overall portfolio experiences smaller dips, and it’s a lot easier to stay invested when your portfolio is down 15% instead of 30%. Bonds can also help preserve your portfolio’s precious capital, meaning there’s more fuel for the fire as stocks recover and grow beyond their pre-dip levels. This is why our allocation advice for even the longest of timelines still includes some bonds. Putting bonds into practice (and your portfolio) So how do you actually "do" bond investing without spending your weekends reading government balance sheets? You shouldn’t have to be an expert to benefit from a sophisticated bonds strategy. That’s why most of our portfolios include a globally-diversified mix of both stocks and bonds*, with bond allocations that can automatically increase as your goal’s target date nears. *Target investments, actual holdings will vary. You can also manually dial your amount of bonds up or down at any time—we’ll even preview the potential tax impact of the changes you’re considering. In certain cases, one of our portfolios made up primarily of bonds may make even more sense. For investors looking to generate income (e.g. retirees), for example, we offer Target Income built with BlackRock. And for those with incomes falling in the 32% tax bracket or higher, we offer the Goldman Sachs Tax-Smart Bonds portfolio. It’s personalized based on customers’ unique tax situations and focuses on municipal bonds issued by state and local governments, which often offer tax-free interest at the federal level. The bottom line on bonds Bonds are rarely trendy, but their strong track record of stability can help cushion the chaos when market volatility hits next. Betterment’s lineup of stock and bond portfolios make it easy to mix some into your investing today, then adjust as you go. Because your right amount of bonds is whatever helps you stay invested.

Three ways it can pay to automate your investing

Three ways it can pay to automate your investing Jan 30, 2026 6:00:00 AM Our managed offering adds value beyond a DIY approach. Here’s how. Key takeaways Portfolio construction is just the beginning. Betterment’s automated investing is designed to help you manage risk, maximize returns, and minimize leg work. Tax-smart features help you keep more of what you earn. Fully-automated Tax Coordination and tax-loss harvesting seek out efficiencies hard to replicate by hand. Navigation helps keep your goals on track. Automated rebalancing, effortless glide paths, and recurring deposits make it easier to stay the course through market ups and downs. Peace of mind is part of the return. Automation frees up time and headspace, letting you live your life instead of worrying about your portfolio. With the arrival of self-directed investing at Betterment, you can choose from thousands of individual stocks and ETFs on your own, including the very same funds we research and select for our curated portfolios. So if you can now buy the same low-cost investments, why pay someone (i.e., us) to manage them for you? It’s a fair question, and to help answer it, it helps to understand why our portfolio construction is just the beginning of the story. It's not just the Betterment portfolio you see today, but the one you see tomorrow (and in the weeks, months, and years that follow) that captures the full value of our expertise and technology. The ongoing optimization and evolution of your portfolio, in other words, is where our automated investing really shines. Sometimes the benefits are tangible. Sometimes they’re emotional. But regardless of how you frame it, we’re constantly working in the background to deliver value in three big ways. Tax savings: keeping more of what you earn Navigation: keeping your investing on-track Calm: keeping your sanity—and your spare time 1. Tax savings: keeping more of what you earn One of the most reliable ways to increase your returns is lowering the taxes owed on your investments. And here's the first way Betterment’s managed portfolios can pay off. Our trading algorithms take tax optimization to a level that’s practically impossible to replicate on your own. Take our Tax Coordination feature, which uses the flexibility of our portfolios to locate assets strategically across Betterment traditional IRAs/401(k)s, Roth IRAs/401(k)s, and taxable accounts. This mathematically-rigorous spin on asset location can help more of your earnings grow tax-free. Then there’s our fully-automated tax-loss harvesting, a feature designed to free up money to invest that would've otherwise gone to Uncle Sam. Our technology regularly scans accounts to identify harvesting opportunities, then goes to work. It’s how we harvested nearly $60 million in losses for customers during the tariff-induced market volatility of Spring 2025. Betterment does not provide tax advice. TLH is not suitable for all investors. Learn more. It’s also a big reason why nearly 70% of customers using our tax-loss harvesting feature had their taxable advisory fee covered by likely tax savings.1 And with the upcoming addition of direct indexing to Betterment’s automated investing, our harvesting capabilities will only continue to grow. 1Based on 2022-2023. Tax Loss Harvesting (TLH) is not suitable for all investors. Consider your personal circumstances before deciding whether to utilize Betterment’s TLH feature. Fee coverage and estimated tax savings based on Betterment internal calculations. See more in disclosures. 2. Navigation: keeping your investing on-track It’s easy to veer off-course when managing your own investing. Life happens, calendars fill up, and the next thing you know, your portfolio starts to drift. When you pay for automated investing, however, you not only get our guidance upfront, you benefit from technology designed to get you to your destination with less effort. As markets ebb and flow, for example, we automatically rebalance your portfolio to maintain your desired risk level. And the “glide path” that automatically lowers your risk as your goal nears? It just happens in eligible portfolios. No research or calendar reminders needed. Our management also helps steer your investing toward a time-tested path to long-term wealth. Most of our portfolios are globally diversified so you take advantage when overseas markets outperform. And we encourage recurring deposits so you buy more shares when prices are low. Recent research by Morningstar helps quantify the value of this “dollar-cost averaging” approach. They found investors lost out on roughly 15% of the returns their funds generated due in large part to jumping in and out of the market. Betterment customers using recurring deposits, meanwhile, earned nearly ~4% higher annual returns.2 It turns out it’s easier to stay the course with a little help. 2Based on Betterment’s internal calculations for the Core portfolio over 5 years. Users in the “auto-deposit on” groups earned an additional 0.6% over the last year and 1.6% annualized over 10 years. See more in disclosures. 3. Calm: Keeping your sanity—and your spare time Our automation can save you time—two hours for each rebalance alone3—but the value of automating your investing is more than just time saved. It’s quality time spent. How much of your finite energy, in other words, are you spending worrying about your money? We can’t erase all of your anxiety, but our team and our tech can empower you to build wealth with confidence and ease, with an emphasis on the ease. 3Based on internal data for a client with one account subject to Betterment’s TaxMin methodology and no other tax features enabled. Betterment will not automatically rebalance a portfolio until it meets or exceeds the required account balance. Between market volatility and a constant barrage of scary headlines, the world is stressful enough right now. There’s little need to add portfolio optimization and upkeep to the list. That is, of course, unless you enjoy it. But many of us don’t. The majority of Betterment customers we surveyed said they hold most of their assets in managed accounts, with self-directed investing serving as a side outlet for exploration. That’s why we offer both ways to invest at Betterment. The payoff is personal Investing performance and price are often measured down to the hundredth of a percentage point. That’s “zero point zero one percent” (0.01%), also known as a “basis point" or "bip" for short. Here at Betterment, it’s our mission to make every one of the 25 bips we most commonly charge worth it. We measure our portfolio’s performance after those fees, so you see what you’ve really earned. And we don’t stop there. With direct indexing and fully paid securities lending coming soon to automated investing, you’ll get even more ways to make your money work harder.

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