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Funds and Investments

Understanding Our Goldman Sachs Smart Beta Portfolio

Articles by Betterment Editors

By the Editorial Staff
Betterment Resource Center  |  Published: September 1, 2018


What is the Goldman Sachs Smart Beta portfolio?

The Goldman Sachs Smart Beta Portfolio strategy invests in securities that have specific characteristics: the strategy tilts towards stocks based on four well-established drivers of performance, often referred to as factors. The factors are – good value, strong momentum, high quality, and low volatility.

Which funds are being used?

For more information on the construction of the portfolio strategy, please click here.

How is it different than the Betterment portfolio?

What primarily differentiates the Goldman Sachs Smart Beta Portfolio from the Betterment portfolio is that the equity portion of the portfolio features allocations to Smart Beta ETFs that have larger allocations to companies screened for the four factors (value, high quality, strong momentum, low volatility).

What is the fee difference between Betterment’s Core Portfolio and Smart Beta?

Customers still pay the Betterment management fee. The fees for the underlying funds are a bit more expensive, particularly at higher stock allocation levels. Going from 0% to 100% stocks in GSAM corresponds with weighted fund fees increasing from 0.13% to 0.22%. For Betterment portfolios, weighted fund fees generally decline as stock allocation increases, starting at 0.15% at 0% stocks and declining toward about 0.07% at 100% stocks.

Can I have multiple portfolio strategies in one account?

Yes, you can have more than one portfolio strategy in your account. But each goal can only be invested in one strategy.

What are the different allocations you can have with Smart Beta?

GSAM has 101 portfolios (0% to 100% stocks in 10% increments).

What is your affiliation with Goldman Sachs?

We’re partnering with Goldman Sachs Asset Management to deliver a Smart Beta portfolio to our customers within the Betterment platform. We do so to provide more personalized solutions that align to customer goals, preferences and values.

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