As an online investment marketplace, Covestor’s mission is to provide the widest breadth of portfolio choices at the lowest possible cost to help investors meet their financial goals and objectives.
In this spirit, we’re always looking to round out our portfolio lineup to better serve investors.
And that’s why we have introduced Covestor Core Portfolios.
First, some brief background on why we’re launching these new portfolios.
The rise of low-cost, index-based ETFs has made it much easier for investors and financial advisers to build diversified, buy-and-hold portfolios. ETFs typically have very low expense ratios, so investors can assemble passively managed “core” portfolios covering basic asset classes, and literally pay pennies on the dollar in terms of management fees. Investors typically use core portfolios to establish index-based exposure to the broad markets, also known as “beta.” The new Covestor Core Portfolios reflect our efforts to lower the costs of getting beta exposure to the markets.
Some online investment advisers use software and automation to build these portfolios of ETFs, and charge investors an additional management fee. These management fees are generally competitive, and vary by adviser and account size.
Now, Covestor has launched new core portfolios with no management fees.
Meet the new Covestor Core Portfolios, featuring zero management costs:
- Three initial portfolios: Covestor Core Moderate Portfolio, Covestor Core Balanced Portfolio and Covestor Core Growth Portfolio.
- The Core Portfolios have no management fees. Investors will only pay the expense ratios of the underlying ETFs in the portfolio, as well as any ETF trading commissions when the portfolios initially purchased and periodically rebalanced. Total ETF trading commissions are currently estimated at $20 annually. We’ve designed the Core Portfolios to be one of the least expensive options for clients investing at least $25,000 after accounting for all costs paid to execute the trades.
- Within each Core Portfolio, asset classes are selected based on quantitative factors, including growth potential, income, stability, inflation hedging, and diversification of risk. Covestor combines ETFs to help efficiently diversify portfolio risk.
- The Core Portfolios are created and maintained by Covestor’s Investment Management Team — investment professionals who are experienced in portfolio construction.
- Individual ETFs are carefully selected for low costs and asset-class purity. Periodic rebalancing and close monitoring helps ensure that portfolios remain positioned to deliver returns within a specific risk-return profile.
From talking to our clients, we know that some investors desire low-cost, diversified, passively-managed solutions for the core part of their portfolio. We listened and created these Covestor Core Portfolios specifically for them.
The new Covestor Core Portfolios are our latest effort to bring the benefits of technology and transparency to our clients. We’re continuing to build an asset management company that caters to the needs of savvy self-directed investors.
DISCLAIMER: The information in this material is not intended to be personalized financial advice and should not be solely relied on for making financial decisions. All investments involve risk, the amount of which may vary significantly. Past performance is no guarantee of future results.