Robo Advisor Betterment Portfolios Are Robots Better?

What are the Betterment portfolios?

Robo Advisor Betterment portfolios can be built with 3-6 ETFs. They are exposed to between 40% and 100% equities.

Article contents

What is the historical return of the Betterment portfolios?

Below you can see the historical return of Betterments portfolios.

Portfolio data was last updated on 11th of November 2022, 11:40 ET

NameYear to dateReturn in 202110 year returnCAGR since 1989 (%)STDEVDraw DownExpense ratioYield
Robo Advisor Betterment 100-19.7118.8212.09.8117.12-40.07%0.07%2.28
Robo Advisor Betterment 80-18.7114.5810.259.2313.93-31.32%0.07%2.09
Robo Advisor Betterment 60-17.6110.458.58.5410.79-22.52%0.07%1.88
Robo Advisor Betterment 40-15.836.486.67.617.68-13.47%0.07%1.69
Robo Advisor Betterment 90-19.3316.7311.159.5815.66-36.12%0.08%2.23
Robo Advisor Betterment 70-18.7612.549.469.0712.76-28.06%0.08%2.11
Robo Advisor Betterment 50-18.28.457.788.4910.06-20.24%0.09%2.03
Robo Advisor Betterment 30-14.374.75.447.116.67-10.91%0.08%1.88
Robo Advisor Betterment 20-11.592.924.076.184.94-5.81%0.07%1.79
Robo Advisor Betterment 10-8.781.132.695.213.66-0.72%0.06%1.69
Robo Advisor Betterment 0-5.98-0.611.314.213.370.00%0.05%1.6
Robo Advisor Betterment 2020 Taxable 100% Stocks-19.3717.3311.048.8717.06-40.33%0.07%2.54
Robo Advisor Betterment 2020 Taxable 90% Stocks-19.1415.5810.448.7115.44-36.09%0.07%2.48
Robo Advisor Betterment 2020 Taxable 80% Stocks-18.8913.889.828.5513.87-31.95%0.08%2.41
Robo Advisor Betterment 2020 Taxable 70% Stocks-18.7112.019.158.3312.29-27.68%0.08%2.35
Robo Advisor Betterment 2020 Taxable 60% Stocks-18.4310.258.518.1910.82-23.54%0.08%2.28
Robo Advisor Betterment 2020 Taxable 50% Stocks-17.948.547.767.979.36-19.39%0.08%2.17
Robo Advisor Betterment 2020 Taxable 40% Stocks-17.226.916.947.697.99-15.35%0.08%2.03
Robo Advisor Betterment 2020 Taxable 30% Stocks-15.145.265.767.096.4-10.53%0.08%1.86
Robo Advisor Betterment 2020 Taxable 20% Stocks-12.933.54.496.394.97-5.62%0.07%1.71
Robo Advisor Betterment 2020 Taxable 10% Stocks-10.381.633.115.553.86-1.43%0.06%1.57
Robo Advisor Betterment 2020 Taxable 0% Stocks-5.24-0.61.024.023.510.00%0.05%1.49
Robo Advisor Betterment 2020 Retirement 100% Stocks-19.5817.1411.088.8317.23-40.53%0.07%2.53
Robo Advisor Betterment 2020 Retirement 90% Stocks-18.9215.7510.438.6715.43-36.24%0.07%2.46
Robo Advisor Betterment 2020 Retirement 80% Stocks-18.4514.229.828.4613.86-32.27%0.08%2.37
Robo Advisor Betterment 2020 Retirement 70% Stocks-18.012.549.148.1812.27-28.17%0.08%2.28
Robo Advisor Betterment 2020 Retirement 60% Stocks-17.4610.978.57.9910.79-24.22%0.08%2.18
Robo Advisor Betterment 2020 Retirement 50% Stocks-16.769.437.757.749.3-20.24%0.08%2.04
Robo Advisor Betterment 2020 Retirement 40% Stocks-15.877.96.937.437.9-16.30%0.08%1.88
Robo Advisor Betterment 2020 Retirement 30% Stocks-13.916.165.766.856.28-11.42%0.07%1.72
Robo Advisor Betterment 2020 Retirement 20% Stocks-11.874.284.496.194.82-6.38%0.07%1.59
Robo Advisor Betterment 2020 Retirement 10% Stocks-9.562.233.115.43.69-1.21%0.06%1.48
Robo Advisor Betterment 2020 Retirement 0% Stocks-5.24-0.61.024.023.510.00%0.05%1.49
Performance for Betterment’ portfolios

Here is what the table is showing you

Year to date: This shows what the portfolio has returned this year starting from the first trading day of the year.

10 Year return: This shows the compounded annualized growth rate over a ten-year period. The current year is excluded from calculations.

CAGR since 1989: This shows the compounded annualized growth rate since 1989. The current year is excluded from calculations.

Expense ratio: This shows the cost of holding the portfolio if you were to construct the portfolio using the proposed ETFs.

Yield: This is the expected dividend yield of the portfolio.

Please note that past performance is not a guarantee of future returns.

How does Betterment’s portfolios compare to the best portfolios?

Below you can see the returns of the best portfolios that we have benchmarked.

NameSee PortfolioYear to dateReturn in 202110 year returnCAGR since 1989 (%)Draw Down
Premium PortfolioPremium-20.9732.1413.211.81-35.43%
Premium PortfolioPremium-18.728.7816.5211.28-37.63%
Premium PortfolioPremium-19.6425.6716.2911.25-37.00%
Premium PortfolioPremium-23.9913.4911.0311.21-44.87%
Premium PortfolioPremium-12.028.1714.4711.14-35.26%
Premium PortfolioPremium-14.924.7511.8510.99-36.46%
Premium PortfolioPremium-14.7929.0213.1510.99-40.85%
Premium PortfolioPremium-20.620.711.4510.93-37.91%
Premium PortfolioPremium-15.1224.5111.8710.88-36.35%
Premium PortfolioPremium-19.3822.9214.9910.85-32.77%
The 10 Best Performing Portfolios That We Have Benchmarked

How do you build the Betterment portfolios with ETFs?

Below is an example of how to build a Betterment portfolio using ETFs

This is for Robo Advisor Betterment 100.

  • 34.60% US Total Stock Market (VTI)
  • 9.20% US Large Cap Value (VTV)
  • 7.50% US Mid Cap Value (JKI)
  • 6.40% US Small Cap Value (VIOV)
  • 27.30% International Developed Blend (VEA)
  • 15.00% Emerging Markets (VWO)

The letters in brackets denote the stock symbol for the recommended ETF. You can look up the symbols at your stockbroker. You can see a listing of all the ETFs we recommend on this page.

Betterment is probably the most well-known fintech company.

It started the robo-advisor phenomenon. If you ever listened to NPR Radio or podcasts, you probably know who they are.

Bettermenthas 16 Billion assets under management as per 2019. Their portfolios are well diversified. They are some of the few portfolios that have emerging market bonds as an asset class.

If you want to gain a greater insight into the robo-advisory phenomenon, I recommend picking up FinTech Innovation: From Robo-Advisors to Goal-Based Investing and Gamification.

Their biggest competitor is Wealthfront. To see a comparison of robo advisor portfolios, see our article Robo Advisor Performance. This is the article where we compare the performance of various robo advisors.

This mission is too important for me to allow you to jeopardize it. – HAL 9000

What are theBetterment portfolios?

There seems to be a trend in the robo advisor portfolios. They are all highly diversified. They also use asset classes not usually seen as much in other portfolios.

The Betterments portfolios include the use of emerging market bonds and many value stocks, for example, mid-cap value. This creates a set up for potential outperformance in that they can rebalance their way to higher returns.

In circa 2014 (or maybe 2012), they changed their portfolio composition. The asset allocation that you see below is a reflection of that asset allocation. Their new asset allocation is also benchmarked, but we still need to document it here. That is upcoming.

Two sets of portfolios

In the 2020 portfolios, there are two sets of portfolios.

  1. The first set is the portfolios, the one with taxable in their name. They are meant to be used in a taxable account. They contain asset classes that minimize taxes, such as muni bonds.
  2. The second set is the portfolios with retirement in their name_._ They are meant to be used in a tax-sheltered/tax-deferred account. They contain asset classes that are not particularly tax-aware such as standard bonds fx – total bonds market, REITs, and the like.

What is the asset allocation of the Betterment portfolios?

Below you can see the asset allocation for all of the Betterment portfolios.

Robo Advisor Betterment 100

  • 34.60% US Total Stock Market (VTI)
  • 9.20% US Large Cap Value (VTV)
  • 7.50% US Mid Cap Value (JKI)
  • 6.40% US Small Cap Value (VIOV)
  • 27.30% International Developed Blend (VEA)
  • 15.00% Emerging Markets (VWO)

Robo Advisor Betterment 90

  • 30.90% US Total Stock Market(VTI)
  • 8.20% US Large Cap Value (VTV)
  • 6.70% US Mid Cap Value (JKI)
  • 5.70% US Small Cap Value (VIOV)
  • 24.60% International Developed Blend (VEA)
  • 14.00% Emerging Markets (VWO)
  • 3.50% Total US Bond Market (BND)
  • 0.60% Cash (money market fund) (BIL)
  • 1.20% TIPS(VTIP)
  • 2.90% Non-US Bonds (BNDX)
  • 1.70% Emerging Market Bonds (VWOB)

Robo advisor Betterment 80

  • 27.00% US Total Stock Market (VTI)
  • 7.20% US Large Cap Value (VTV)
  • 5.90% US Mid Cap Value (JKI)
  • 5.00% US Small Cap Value (VIOV)
  • 22.10% International Developed Blend (VEA)
  • 12.80% Emerging Markets (VWO)
  • 6.80% Total US Bond Market (BND)
  • 2.40% TIPS(VTIP)
  • 7.20% Non-US Bonds (BNDX)
  • 3.60% Emerging Market Bonds (EMB / VWOB)

Robo Advisor Betterment 70

  • 23.40% US Total Stock Market (VTI)
  • 6.30% US Large Cap Value (VTV)
  • 5.10% US Mid Cap Value (JKI)
  • 4.30% US Small Cap Value (VIOV)
  • 19.30% International Developed Blend (VEA)
  • 11.60% Emerging Markets (VWO)
  • 9.80% Total US Bond Market (BND)
  • 3.80% TIPS(VTIP)
  • 10.90% Non-US Bonds(BNDX)
  • 5.50% Emerging Market Bonds (VWOB)

Robo advisor Betterment 60

  • 19.80% US Total Stock Market (VTI)
  • 5.30% US Large Cap Value(VTV)
  • 4.30% US Mid Cap Value (JKI)
  • 3.60% US Small Cap Value (VIOV)
  • 16.70% International Developed Blend (VEA)
  • 10.30% Emerging Markets (VWO)
  • 12.30% Total US Bond Market(BND)
  • 5.00% TIPS(VTIP)
  • 14.70% Non-US Bonds (BNDX)
  • 8.00% Emerging Market Bonds (EMB / VWOB)

Robo Advisor Betterment 50

  • 16.20% US Total Stock Market(VTI)
  • 4.40% US Large Cap Value(VTV)
  • 3.60% US Mid Cap Value(JKI)
  • 3.00% US Small Cap Value(VIOV)
  • 13.70% International Developed Blend (VEA)
  • 9.00% Emerging Markets(VWO)
  • 14.70% Total US Bond Market (BND)
  • 6.30% TIPS(VTIP)
  • 18.40% Non-US Bonds(BNDX)
  • 10.70% Emerging Market Bonds (VWOB)

Robo advisor Betterment 40

  • 12.90% US Total Stock Market (VTI)
  • 3.40% US Large Cap Value (VTV)
  • 2.80% US Mid Cap Value(JKI)
  • 2.40% US Small Cap Value(VIOV)
  • 11.10% International Developed Blend (VEA)
  • 7.40% Emerging Markets (VWO)
  • 7.00% Short Term Treasuries (VGSH)
  • 15.10% Total US Bond Market (BND)
  • 6.60% TIPS (VTIP)
  • 19.50% Non-US Bonds(BNDX)
  • 11.80% Emerging Market Bonds (EMB / VWOB)

Robo Advisor Betterment 30

  • 9.50% US Total Stock Market (VTI)
  • 2.60% US Large Cap Value(VTV)
  • 2.10% US Mid Cap Value(JKI)
  • 1.80% US Small Cap Value (VIOV)
  • 8.30% International Developed Blend (VEA)
  • 5.60% Emerging Markets (VWO)
  • 24.20% Short Term Treasury (VGSH)
  • 11.40% Total US Bond Market(BND)
  • 6.10% Short-Term Investment-Grade (VCSH)
  • 5.00% TIPS(VTIP)
  • 14.60% Non-US Bonds (BNDX)
  • 8.80% Emerging Market Bonds (VWOB)

Robo Advisor Betterment 20

  • 6.30% US Total Stock Market (VTI)
  • 1.70% US Large Cap Value (VTV)
  • 1.40% US Mid Cap Value (JKI)
  • 1.20% US Small Cap Value (VIOV)
  • 5.60% International Developed Blend (VEA)
  • 3.70% Emerging Markets(VWO)
  • 42.80% Short Term Treasury (VGSH)
  • 7.60% Total US Bond Market (BND)
  • 10.70% Short-Term Investment-Grade (VCSH)
  • 3.30% TIPS(VTIP)
  • 9.80% Non-US Bonds (BNDX)
  • 5.90% Emerging Market Bonds (VWOB)

Robo Advisor Betterment 10

  • 3.20% US Total Stock Market(VTI)
  • 0.90% US Large Cap Value (VTV)
  • 0.50% US Mid Cap Value (JKI)
  • 0.60% US Small Cap Value (VIOV)
  • 2.80% International Developed Blend (VEA)
  • 1.90% Emerging Markets (VWO)
  • 61.40% Short Term Treasury(VGSH)
  • 3.80% Total US Bond Market (BND)
  • 15.40% Short-Term Investment-Grade (VCSH)
  • 1.70% TIPS(VTIP)
  • 4.90% Non-US Bonds (BNDX)
  • 2.90% Emerging Market Bonds (VWOB)

Robo Advisor Betterment 0 = 100% Bonds

  • 80.00% Short Term Treasury(VGSH)
  • 20.00% Short-Term Investment-Grade (VCSH)


Where can I learn more about Betterment?

Betterment has a YouTube channel that provides useful information.

Betterment website – they do have a lot of info on how they construct their portfolio and about investing in general.

Betterment also has a podcast. Find it in your favorite podcast library.

2001: A Space Odyssey on IMDB

Suggestions for your next steps

Finding the right portfolio is hard. Maintaining your portfolio is also daunting.

If you want access to our high-performing portfolios then you want to take a look at the premium portfolios.

This is a paid product that gives you the 20 best-performing portfolios since 1989. The portfolios represent a great opportunity low-cost for you to get more money from your investment portfolios. We think it’s a no-brainer. The 20 portfolios are the best among the literally hundreds of other portfolios we have benchmarked since we started.

You stand to gain thousands more dollars EACH YEAR for the price of a few months of Netflix.

If you have already committed to a portfolio – good for you! If you need help maintaining the portfolio you will find our rebalance worksheet useful.

Rebalancing your portfolio lowers your risk and may provide higher returns in the long run. It is completely FREE.

You can find the rebalance worksheet in our article Here Is The Most Easy To Use Portfolio Rebalance Tool.

Rebalancing lowers your portfolio risk and can increase your returns.

Can you lose money with Betterment?

No. The Betterment portfolios are diversified and they consist of many kinds of stocks and bonds. You can only lose money if you sell your stocks in your Betterment account when the stock market is experiencing a downturn.

Is Betterment good for investing?

Yes. Betterment is a fantastic way to save and invest because it is all done automatically. Betterment also has very good portfolios, but not the best-performing.

Is Betterment better than Vanguard?

Betterment and Vanguard are two different things. Vanguard is for the do-it-yourself investor who has a little knowledge about investing. Betterment is for anyone who wants to get started with investing without getting into the details of investing.