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Robo Advisor Wealthfront Portfolios, Do Robos Dream of Higher Returns?

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This is the article displaying the portfolios by robo advisor Wealthfront. Here you will find a description, performance for the portfolios as well as detailed information on how to implement them yourself.

Robo Advisor Wealthfront portfolios

The robo advisor firm came late to the robo advisor party but have enjoyed an immense amount of success. One of the giants of the investment world, Burton Malkiel, author of A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, is the Chief Investment Officer at Wealthfront. Charles Ellis, another investing giant, and author of Winning the Loser’s Game, Seventh Edition: Timeless Strategies for Successful Investing is on the advisory board. 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.

As of 2019 Wealthfront has 20 billion dollars under management. Their biggest competitor in the robo advisor space is Betterment. You can view our breakdown of the Betterment portfolios in the article Robo Advisor Betterment Portfolios Are Robots Better?

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.

Description of Wealthfront portfolios

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

The Wealthfront portfolios include the use of emerging market bonds. They also use real estate, REITs, as a distinct asset class. Betterment, on the other hand, does not allocate to REITs specifically. Wealthfront also makes heavy use of corporate bonds – a favorite of Burton Malkiel. See Burton Malkiel Portfolio: No Random Returns Here.

This creates a set up for potential outperformance in that they can rebalance their way to higher returns.

Let’s see how they perform.

Performance of Wealthfront portfolios

NameAsset class countYear to dateReturn in 201910 year returnCAGR since 1989 (%)Risk levelExpense ratio
Robo Advisor Wealthfront 1007-12.33%23.468.12%9.7430.09%
Robo Advisor Wealthfront 807-11.65%23.859.16%9.4530.08%
Robo Advisor Wealthfront 607-9.35%22.28.76%9.1430.09%
Robo Advisor Wealthfront 407-6.95%20.598.41%8.8120.10%

Asset Allocation of Wealthfront portfolios

Robo advisor Wealthfront 100                   

This portfolio is part of Portfolio Einstein Gold, Premium Portfolios. 

Robo advisor Wealthfront 80                     

  • 22.00%  US Total Stock Market   (VTI)
  • 15.00%  US Large Cap Value         (VTV)
  • 15.00%  REITs     (VNQ)
  • 19.00%  International Developed Blend      (VEA)
  • 16.00%  Emerging Markets           (VWO)
  • 6.00%    Corporate Bonds              (LQD)
  • 7.00%    Emerging Market Bonds (EMB / VWOB)

Robo advisor Wealthfront 60                     

  • 19.00%  US Total Stock Market   (VTI)
  • 15.00%  US Large Cap Value         (VTV)
  • 11.00%  REITs     (VNQ)
  • 16.00%  International Developed Blend      (VEA)
  • 12.00%  Emerging Markets           (VWO)
  • 19.00%  Corporate Bonds              (LQD)
  • 8.00%    Emerging Market Bonds (EMB / VWOB)

Robo advisor Wealthfront 40                     

  • 18.00%  US Total Stock Market   (VTI)
  • 15.00%  US Large Cap Value         (VTV)
  • 6.00%    REITs     (VNQ)
  • 12.00%  International Developed Blend      (VEA)
  • 8.00%    Emerging Markets           (VWO)
  • 31.00%  Corporate Bonds              (LQD)
  • 10.00%  Emerging Market Bonds (EMB / VWOB)

Check the best mutual funds and ETFs here.

Resources for Wealthfront portfolios

Wealthfront has a very good learning center with some informative videos. Many of them starring Burton Malkiel.

The Wealthfront website

Conclusion

Are you attracted to robo advisors?

What do you think of the Wealthfront portfolios?

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