Robo-adviser Betterment has moved from simply running plain-vanilla exchange-traded fund portfolios to incorporating smart-beta, alternatives and now potentially commodity ETFs.
After a concerted move from digital to hybrid, Betterment has been serving up model portfolios from BlackRock and Goldman Sachs Asset Management since 2017, alongside its own models. The robo is reluctant to extend the list of outsourced portfolios unless it sees a need, Huang said.
“The barrier for us to bring in other model portfolios is pretty high,” she said. “We have to see how it sits in our platform, and if it adds a differentiated value to our customers.”
Adding BlackRock’s and Goldman Sachs’ model portfolios is a win for Betterment because it strengthens their legitimacy in the eyes of investors, according to Sean McDermott, senior analyst at Corporate Insight.