E*TRADE Core Portfolios Review

Account Minimum $500
Fees  0.3% annually. In addition, ETF expenses (expense ratios) are also taken out of the account. 
Goal Setting  None 
Available Assets  ETFs 
Interest Paid on Cash Balances  0.05% for excess cash, which is swept into a money market fund. 
Customizable Portfolio  Yes, investors can incorporate SRI /ESG investing and Smart Beta ETFs into the portfolio, but otherwise, the platform is not very customizable. 
View Portfolio before Funding  Yes 
Customer Service  Can speak with a registered investment advisor for assistance 24/7, but it is not a dedicated advisor. Their service is more geared towards getting people up and running on their system. 
Financial Advisor Available  Yes, but not a dedicated professional.
Cash Management  Portfolios hold 1% in cash. E*TRADE utilizes a cash sweep to a money market fund until cash balances are used as part of a rebalancing. Cash in the money market fund can also be used to fund a separate bill pay or checking account at E*TRADE. Transfers between accounts is straight-forward. 
Tax-Loss Harvesting No
External Account Sync/Consolidation No
Mobile App  Android, iOS 

Account Setup

Setting up a Core Portfolios history at E * TRADE is quick and easy. An E * TRADE Core Portfolios account requires a $ 500 initial investment, which is obviously higher than some robo-advisors with no account minimums. Anyone, whether or not they have an existing account at E * TRADE, can use the E * TRADE web site to take the risk allowance profile questionnaire, indicate initial and any recurring deposits, and see a commend portfolio .

You can go through the process multiple times if you want to see changes in commend portfolios based on different responses. investment advisors are besides available to assist investors and potential customers with establishing a Core Portfolios account and determining the best portfolio for their needs .

After going through the action of getting a recommended portfolio, E * TRADE asks if you are a modern or returning customer. Existing customers go directly to the account opening process after logging in, and new customers will have to set up an E * TRADE explanation. The account opening process at E * TRADE is similarly straightforward and is completed promptly and easily .

Goal Planning

Goal plan in E * TRADE ’ s Core Portfolio is limited. This contrasts with robo-advisories that have more detail questionnaires regarding goals, needs for withdrawals, and time horizons. E * TRADE chose a less complicated approach for their managed report offer. E * TRADE only has a handful of drop-down questions, and there is no ability to customize for the person investor. For example, you can not enter two separate future goals, such as a car purchase and money for your children ’ second college fund .

furthermore, the E * TRADE questionnaire ’ sulfur longest clock time horizon is fair eleven years. While this may work well for many E * trade customers, other investors will prefer more full-bodied goal planning tools. Two customers that both have the finish of saving for retirement with withdrawals in 11 or more years and similar risk tolerances would receive the lapp portfolio recommendation, evening if one customer is 55 years erstwhile and another 20 years old .

The recommended portfolio allocates 20 % to fix income, but a 20-year-old would often be advised to not have any fixed income. More pay back income may be appropriate for the older investor. sol, while these two investors parcel some of the same goals, not obtaining more information such as investor old age and other goals may not result in a portfolio good suited for all investors. Goal planning differentiates E * TRADE ’ s robo-advising platform, but not inevitably in a estimable way as not all investors are looking to trade simplicity for their specific investment needs .

Account Services

Core Portfolios allows clients to set up automated recurring deposits, and these are easy to increase, decrease, or otherwise wangle. margin is unavailable in Core Portfolios accounts, but investors can borrow against their accounts ; E * TRADE ’ s pastime rates for this, however, are on the eminent side at more than 7 %. Investors are not able to include any of their individual holdings or purchase assets for inclusion in Core Portfolio accounts. Transfers into and out of accounts are simple. Cash can be withdrawn or transferred to other E * TRADE accounts with rest .

Cash Management

Core Portfolios hold 1 % in cash, and these portfolios will be rebalanced whenever you investment mix drifts at least 10 % or more of your target allotment. Cash is swept into a money market report until it is transferred out to another E * TRADE report, such as a discipline or bill payment account .

Portfolio construction

Portfolio construction for E * TRADE Core Portfolios accounts is reasonably straightforward. There is a very promptly questionnaire about initial investment and recurring deposit amounts, time horizon, and risk allowance that leads to a suggested portfolio that best fits the investor ’ second questionnaire responses. You can besides override the suggest portfolio and choose a different portfolio .

Portfolios are managed entirely with ETFs choose in junction with modern portfolio theory techniques to diversify the asset classes in the portfolio using person ETFs in each asset class to maximize returns while lowering risk through a diversify portfolio. You can besides choose whether you want part of the portfolio ETFs to consist of SRI/ESG stocks or fresh beta ETFs that are more actively managed in an feat to increase portfolio gains relative to other ETFs .

  • Core Portfolios are highly diversified across domestic and international equity and fixed income ETFs. 
  • Income portfolios offer higher dividend yields and a lower overall risk profile. 
  • Tax-optimized portfolios are designed for investors in higher tax brackets. 
Available Assets
Individual Stocks No
Mutual Funds  No 
Fixed Income  Yes, but limited to municipal bond ETFs for tax efficiency 
REITs  No 
Socially Responsible or ESG Options  Yes 
ETFs  Yes 
Non-Proprietary ETFs  Yes 
Mutual Funds  No 
Private Equity  No 
Crypto, Forex   No 

Portfolio Customization

E * TRADE speaks of the ability to customize their Core Portfolios accounts, but this is limited to a choice of having separate of their portfolio invested in socially responsible ( SRI/ESG stocks ) stocks or smart beta ETFs, which is where the ETF is more actively managed in an effort to increase portfolio gains relative to other ETFs .

While these are nice features available to Core Portfolio investors, it is a stretch to call it customization .

Portfolio Management

Core Portfolios are invested in ETFs according to allotment percentages guided by your questionnaire responses and modern portfolio theory. The accounts are rebalanced semi-annually, a well as when the history drifts out of line with the portfolio allocations by at least 10 %. Accounts can be monitored on-line, and investors are kept inform about samara market events and trends that might impact their portfolios. E * TRADE will besides send a unconstipated on-line instruction with holdings information, trades made, and dividends received .

There is no tax-loss reap on E * TRADE Core Portfolio accounts, although specify income ETFs in the portfolio is limited to municipal bonds to limit taxable sake. While investors can see the entirety of their versatile accounts when on-line, E * TRADE ’ south brokerage has tools to show overall asset allocations by asset class and at the individual portfolio level. This will allow an investor to make changes in their respective accounts to ensure proper diversification across multiple accounts. however, the Core Portfolios does not do this psychoanalysis or choose securities based on the overall fiscal picture of the investor .

Key Portfolio Management Features
Automatic Rebalancing Semi-annually, or whenever the account drifts out of line with the portfolio allocations by at least 10%
Reporting Features  Online monitoring and statements
Tax-Loss Harvesting  No tax balancing, but fixed income is limited to municipal bond ETFs to help reduce taxable income 
External Account Sinking/Consolidation  No – E*TRADE does have these capabilities for regular accounts. However, Core Portfolios do not do this analysis or choose securities based on the overall financial picture of the investor 

User have

background

The desktop experience with Core Portfolios is intuitive. The page is not cluttered, the concepts are presented succinctly, and it is easy to navigate through the questionnaire process and open an explanation. The frequently asked questions area links on the primary coil menu for those modern to investing are very helpful and provide access to useful education. That said, the basics of how these accounts work could have been better outlined on the primary Core Portfolio web foliate. The information is all there, however, and the background interface was easy to use .

Mobile App

Core Portfolios information on E * TRADE ’ s mobile app works the lapp as the background. The fluid app propose was very easy to use, and accounts can be opened from the mobile app. money transfers into or out of Core Portfolios accounts are easily to do on the mobile app, so transferring money to an E * TRADE account that supports check or circular pay was very dim-witted .

Customer Service

call documentation at E * TRADE is 24/7. once the account is set up, support focuses more on technical confirm. The average agree time to reach an investment adviser is between one and three minutes. E * TRADE besides makes investing advisors available to Core Portfolio customers and electric potential customers, and there is an E * TRADE Tax Center to help clients understand how their investments will be taxed.

There is besides a adept manage of data about Core Portfolio accounts on the E * TRADE web site, and the frequently asked questions segment answers the majority of questions people might have about robo-advisory accounts in an easy-to-read way where key topics are in bold with sections that can be expanded to see extra detail for the topic .

  • 24/7 phone support
  • Extensive FAQs available on the website
  • Physical branch network for clients to visit

security system Features

Two-factor authentication is available on E * TRADE ’ s chopine. Biometric security is available for mobile phones with either facial recognition or fingerprints. E * TRADE besides provides extra investor protection beyond coverage through SIPC through the Morgan Stanley excess of SIPC auxiliary indemnity policy. E * TRADE ’ south platforms have not suffered any outages since at least 2020, but there have been some instances where account holders had difficulty logging on and placing trades ; to be fair, though, the meaning increase in trade activity since the COVID-19 pandemic and the frenzies over meme stocks like GameStop and others has impacted other brokers, american samoa well. There have not been any datum breaches in the past four years .

E * TRADE Core Portfolios ’ security is up to diligence standards .

  • Two-factor authentication
  • Biometric login on mobile by facial recognition or fingerprint
  • Additional investor protection beyond coverage through Securities Investor Protection Corporation (SIPC) through the Morgan Stanley excess of SIPC supplemental insurance policy.
  • No outages since at least 2020, but there have been some instances where account holders had difficulty logging on and placing trades. To be fair, though, the significant increase in trading activity since the Covid pandemic and the frenzies over meme stocks like GameStop and others has impacted other brokers as well. 
  • There have not been any data breaches in the past four years. 

education

E * TRADE has a frightful sum of educational information available, and it is available to anyone on their web site rather than being limited to account holders. The Core Portfolios main page has an overview of the process and the Core Portfolios FAQ section is comprehensive and easily to navigate. The FAQ department provides overviews of what Core Portfolios are, why they use ETFs, what portfolio poise is, and the costs. It besides contains a department outlining the platform ’ s investing overture and criteria for investments in the portfolio. Beyond the FAQ content, there is besides a “ Knowledge ” clear menu choice that provides overviews of diversification and gamble tolerance. The initial “ Knowledge ” page besides has a link to the E * TRADE educational library, which provides a frightful amount of educational data on invest .

Commissions and Fees

E * TRADE ’ s Core Portfolios accounts require at least $ 500, and they have a flat fee structure of 0.3 % ( or 30 footing points ), so a $ 10,000 report would have an annual tip of good $ 30. This annual fee is calculated monthly and is based on the score value at the beginning of each calendar month. Core Portfolios customers will besides have to pay ETF expense ratios typically ranging from 0.06 to 0.12 %. The fees are very reasonable, although E * TRADE ’ s 0.3 % annual tip is higher than some of its competitors in the robo-investing space—including some competitors which don ’ metric ton charge advisory fees at all .

Category Fee 
Management fees for $5,000 account 0.30%; $15 per year or $1.25 per month
Management fees for $25,000 account  0.30%; $75 per year or $6.25 per month 
Management fees for $100,000 account  0.30%; $300 per year or $25 per month 
Termination fees  $75 for full transfer out and $25 for partial transfer out. The $25 feel is not charged on Core Portfolio accounts with at least $5,000, and they are also not charged if the transfers are to another E*TRADE account. 
Expense ratios   The majority fall between 0.06 to 0.12 
Mutual funds  N/A 

Final Verdict

E * TRADE ’ s Core Portfolios features a simpleton report setup process and an intuitive desktop platform that is easy to navigate. It ’ mho particularly estimable for younger investors who are always on the move and who want access to an industry-leading mobile platform. After all, E * TRADE is a initiate in mobile invest. The biggest downsides of E * TRADE ’ s Core Portfolios are its miss of tax-loss harvest, weak goals and fourth dimension horizons planning, and its inability to consolidate external accounts. These are key missing elements that make it far less suited for investors with complicated finances and tax situations.

methodology

Our mission at Investopedia is to provide investors with reviews and ratings of robo-advisors that are comprehensive and unbiased. Our team of researchers and technical writers, led by Michael Sacchitello, spend months evaluating all aspects of a robo-advisor ’ randomness platform, including the bill apparatus march, goal plan tools, account service options, portfolio construction offerings, portfolio management, fluid and desktop exploiter experience, educational content, fees, and security. As contribution of this evaluation, we extract critical datum points that are weighted by our quantitative model that produces a mighty star-scoring system .

With the individual investor in mind, we ’ ve designed a comprehensive ranking methodology to find the best overall robo-advisors and the best robo-advisors across nine key categories. Each adviser is then scored across multiple variables to rate performance in every applicable class. The score for the overall award is a burden average of the categories .

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article Sources

Investopedia requires writers to use primary sources to support their study. These include white papers, government data, original report, and interviews with industry experts. We besides reference original inquiry from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, indifferent contentedness in our

  1. CNBC. “ Morgan Stanley to buy E-Trade for $ 13 billion in latest deal for on-line brokerage diligence. ”
  2. E * TRADE. “ Customer Service Summary ” .
  3. E * TRADE. “ frequently Asked Questions ” .

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