Betterment, the largest independent digital advisor, has added two new portfolio strategies to its investment offerings: a smart beta strategy from Goldman Sachs Asset Management (GSAM) and a target income strategy from BlackRock. Both additions were made at the behest of investors.
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“We have been hearing from customers that different portfolio strategies would be better fit for different goals,” Dan Egan, director of behavioral finance and investments at the firm, told ThinkAdvisor.
“Betterment has an increasingly diverse customer base; they all want to put their money to work, but not necessarily in the same way,” said Betterement founder and CEO Jon Stein, in a statement announcing the new portfolio strategies.
The Goldman smart beta strategy is designed to deliver stronger risk-adjusted returns than traditional market-weighted index funds generate. “Clients are a bit uncomfortable with market-cap weighted systemic approach,” says Egan. Trademarked as ActiveBeta, the Goldman strategy is based on four drivers (factors) of performance: value, momentum, quality and low volatility.