Betterment Partners with BlackRock and Goldman Sachs Asset Management

By Daniel Lanyon on 14th September 2017

P2P/Marketplace LendingAlternative CreditRobo-Advice

The partnership will expand portfolio options aimed at increased personalisation.

Betterment Partners with BlackRock and Goldman Sachs Asset Management

Betterment, the largest independent online investment advisor, will offer two new portfolio strategies including an income portfolio strategy from BlackRock and a smart beta portfolio strategy from Goldman Sachs Asset Management.

The first in a new breed of ‘robo advisors’’ – or online wealth managers – Betterment looks after more than $10bn in assets for more than 270,000 customers.

“Betterment has an increasingly diverse customer base; they all want to put their money to work, but not necessarily in the same way,” said Jon Stein, Founder and CEO of Betterment. “Adding these options to our existing portfolio strategies will help us deliver on our promise to provide customers with a personalised investment plan tailored for their individual needs and preferences.”

 Betterment says it selected BlackRock’s income portfolio because “it was created for clients averse to stock market risk, but who want to target higher levels of income than cash savings accounts deliver.”

The portfolio invests 100 per cent of assets in U.S. bonds and international bonds issued in U.S. dollars. The portfolio strategy prioritizes capital preservation and generating cash income.

“Our customers continue to seek out strategies that can turn their investments into a steady income,” said Alex Benke, CFP®, VP of Financial Advice and Investing at Betterment. “We’re excited to be partnering with BlackRock to provide this new portfolio, and believe that a significant portion of our growing customer base may gain peace of mind by targeting a steady stream of income, while minimizing the risk of losing principal.

Betterment selected GSAM’s smart beta strategy uses traditional passive funds as well as the portfolios GSAM’s in proprietary performance-seeking ActiveBetaTM equity ETFs. They seek to deliver stronger risk-adjusted returns relative to traditional market-weighted index products. The ActiveBetaTM strategy has strong value, momentum, high quality and low volatility criteria.

This GSAM portfolio strategy tends to be more heavily allocated to emerging markets, as well as small-cap stocks in both the U.S. and developed countries. The strategy also incorporates REITs and proportionally invests more in high-yield bonds with longer durations, compared to Betterment’s core portfolio strategy.

“Individuals managing their investments through Betterment can now easily tap into GSAM’s investing and risk-management expertise at a low cost,” Benke said. “We’re thrilled to partner with Goldman Sachs Asset Management by offering this new smart beta portfolio to those in our large customer base looking for a thoughtful and deliberate approach to helping achieve better risk-adjusted returns."

 

This article first appeared on www.roboadvicenews.com

 

Comments

Carl Harnish

03 Oct 2017 09:17pm

I think it is a great idea to go with BlackRock. However, I feel the exact opposite about Goldman Sachs. I feel the they look out for the company first and the client after that. I had funds with them and the annual expenses ate up the profits.

AltFi Amsterdam Summit 2018

AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.

5th November 2018


More like this:

Fellow Finance goes public

10th October 2018
George Geddes

P2P lender Folk2Folk surpasses £250m in loans

16th October 2018
George Geddes