A Portfolio That Spans Over 100 Countries 

Stock ETFs


The portfolio includes stock ETFs that efficiently capture the broad stock market, and international developed and emerging markets. Your money is invested in literally thousands of companies instantly. Exactly how much of your portfolio is made up of which stocks depends on the exact allocation you choose. The stock ETFs include:

US Total Stock Market

Vanguard U.S. Total Stock Market Index ETF (VTI)robo-advisor investing - betterment invests in 6 stock ETFs

US Large-Cap Value Stocks

Vanguard US Large-Cap Value Index ETF (VTV)

 

US Mid-Cap Value Stocks

Vanguard US Mid-Cap Value Index ETF (VOE)

 

US Small-Cap Value Stocks

Vanguard US Small-Cap Value Index ETF (VBR)

 

International Developed Stocks

Vanguard FTSE Developed Market Index ETF (VEA)

 

Emerging Market Stocks

Vanguard FTSE Emerging Index ETF (VWO)

 

Why these stock ETFs?

T
his exposure covers the total
U.S. market with a slight tilt towards value and small-cap stocks. The value and small-cap tilt has tended to beat the market in the long term, based on research by Nobel-prize winner Eugene Fama and Kenneth French.

By adding international stocks, there is a benefit from growth overseas in developed markets, including the U.K., Japan, and Europe, and achieve the same expected return with lower risk. With the emerging market stock ETF, you can capture growth in small but expanding markets such as Brazil, India, and China. This further diversifies the portfolio, and means you can reach higher expected return levels, especially at higher risk allocations.

Bond ETFs


The portfolio includes bond ETFs to precisely manage the level of risk at every allocation, and improve the risk-adjusted performance of the portfolio at higher risk levels. The exact amounts of each bond ETF will depend on the allocation you choose. The bond ETFs include:

 

Short-Term Treasuries
iShares Short-Term Treasury Bond Index ETF (SHV)

 

Inflation Protected Bonds

Vanguard Short-term Inflation-Protected Treasury Bond Index ETF (VTIP)

 

US High Quality Bonds (IRA accounts)

Vanguard US Total Bond Market Index ETF (BND)

 

National Municipal Bonds (Taxable accounts)

iShares National AMT-Free Muni Bond Index ETF (MUB)

robo-advisor investing - betterment invests in 7 bond ETFs

 

US Corporate Bonds

iShares Corporate Bond Index ETF (LQD) 

 

International Developed Bonds

Vanguard Total International Bond Index ETF (BNDX)

 

Emerging Market Bonds

Vanguard Emerging Markets Government Bond Index ETF (VWOB)

 

Why these bond ETFs?

These bond ETFs permit a precise level of risk, and then obtain the best possible return at that level of risk by balancing four different growth factors: U.S. interest rate risk, U.S. company credit risk, international interest rate risk, and international credit risk. When applicable, the after-tax benefits of allocating to federally tax-exempt municipal bonds is strongly considered.

Taking on a higher exposure to any of these factors means higher expected returns with higher potential for short-term losses. However, by blending them together intelligently, the return level is maintained and the severity of lossesreduced.

Sounds great. Just how do you achieve these high goals?

  
 

 

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