A well-known robo-advisor increased holdings in a few Vanguard exchange-traded funds in the first quarter.
Betterment LLC materially raised investments in
Vanguard FTSE Developed Markets ETF
Vanguard Total International Bond ETF
Vanguard Short-Term Inflation-Protected Securities ETF
(VTIP), and added more shares of
Vanguard FTSE Emerging Markets ETF
(VWO). The investment advisor disclosed the trades, among others, in a form it filed with the Securities and Exchange Commission.
In response to a request for comment on the trades, Betterment provided the following statement:
“Recent trading activity in Q1 reflects the results of our standard procedures. We build diversified portfolios that we rebalance automatically for our customers over time so as to help them meet their goals. With any rebalancing that we do, we always do as much as possible to keep their capital-gains taxes at a minimum.
“In Q1, Betterment added 56,000 new clients to the platform, up 116% year over year, and beating a previous quarterly client record by 59%. For every client that comes to Betterment, we create and recommend a personalized diversified portfolio for them to reach their specific financial goals.”
Betterment managed assets of $29 billion as of mid-April.
The investment advisor bought 7 million more shares of Vanguard FTSE Developed Markets to end March with 81 million shares.
Vanguard FTSE Developed Markets shares rose 4.0% in the first quarter, and have gained 8.3% so far in the second. For comparison, the
S&P 500 index
rose 5.8% in the first quarter, and is up 6.9% so far in the second. The ETF, however, was built to track another index, the FTSE Developed All Cap ex US Index, and sees “to match the performance of a diversified group of stocks of large-, mid-, and small-cap companies located in Canada and the major markets of Europe and the Pacific region,” according to Vanguard. At the end of April, the ETF’s three largest holdings were
and ASML Holding (ASML), a Dutch supplier of equipment that makes semiconductors. American depositary receipts of ASML have been on a tear, surging 42.9% so far this year, and doubling over the latest 12 months.
Betterment bought 2.9 million more shares of Vanguard Total International Bond to end the first quarter with 26.5 million shares.
Vanguard Total International Bond shares slipped 2.4% in the first quarter, but they are about flat so far in the second quarter. The ETF is meant to track the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (U.S. dollar hedged), essentially offering “broad exposure to non-US dollar denominated investment-grade bonds.”
The investment advisor bought 938,405 additional shares of Vanguard Short-Term Inflation-Protected Securities to lift its holdings to 8.4 million shares.
Vanguard Short-Term Inflation-Protected Securities shares were flat in the first quarter, and so far in the second, they have gained 1.5%. The ETF is meant to track an index that measures the performance of inflation-protected public obligations of the U.S. Treasury (TIPS) with a remaining maturity of less than five years. The shorter duration offers less real-interest-rate risk, “but also lower total returns relative to a longer-duration TIPS fund.”
Betterment added 2.6 million more shares of Vanguard FTSE Emerging Markets to end the first quarter with 51.3 million shares.
Vanguard FTSE Emerging Markets shares rose 3.9% in the first quarter, and so far in the second, they are up 5.0%. The ETF is intended to track the FTSE Emerging Markets All Cap China A Inclusion Index, and is “[o]nly appropriate for long-term goals.” As of the end of April, the ETF’s top holdings were
Taiwan Semiconductor Manufacturing
Alibaba Group Holding
Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.
Write to Ed Lin at firstname.lastname@example.org and follow @BarronsEdLin.