FinTech News
Roboadvisor Wealthfront Introduces Automated Bond Portfolio
Roboadvisor platform Wealthfront is continuing to expand its product offerings with the debut of a new bond portfolio option.
About the feature:
This week, Wealthfront announced the official launch of its Automated Bond Portfolio. As the FinTech explains, the first-of-its-kind portfolio combines Treasury and corporate bond ETFs. The result is a portfolio meant to deliver higher yields than savings accounts while retaining a lower risk than other equities. As with other Wealthfront products, the platform will build bond portfolios automatically and personalize their portfolios by taking into account such factors as income, state of residence, and tax filing status. Additionally, the option is meant to provide greater liquidity than other products, such as CDs and I-bonds. Currently, the offering features a 5.48% blended 30-day SEC yield net of fees.
Other Wealthfront offerings:
The new Automated Bond Portfolio joins Wealthfront’s growing list of products. In addition to its roboadvisory services, the platform also offers a high-yield savings account called Cash Account. Currently, Cash Account customers can earn 4.55% APY on their funds and, since the FinTech works with a number of partner banks, they advertise that these funds are FDIC insured up to $5 million.
All of these features have allowed Wealthfront to continue on a strong growth trajectory. According to the company, the platform currently manages more than $43 billion in assets.
What they’re saying:
Announcing the launch of the Automated Bond Portfolio feature, Wealthfront’s VP of Product Dave Myszewski said, “Clients have been requesting an easier entry into bonds that helps them take advantage of the higher yields and lower risk without having to navigate a clunky interface or sacrifice liquidity.” Myszewski continued, “We’re excited to solve those pain points for our clients and expand our product suite to meet even more of our clients’ saving and investing needs.”
Also commenting on the feature and its significance was Wealthfront CEO David Fortunato who said, “The Automated Bond Portfolio is a perfect example of how Wealthfront uses software to rethink consumer finance and develop products that help our clients achieve better financial outcomes. This philosophy has set Wealthfront apart from the beginning and is why we’ve been able to build a profitable business that remains resilient through all market conditions.”
My thoughts:
The addition of an Automated Bond Portfolio seems like a logical expansion of Wealthfront — especially in the current financial climate. On that note, however, while the yield offered by bonds may best high-yield savings, the difference may not be so dramatic that customers will want to flock to this new option specifically. Still, it’s a great addition for those who are already Wealthfront customers and now have a new option for their investments. For that reason, while the direct impact remains to be seen, it seems likely that this feature will only further fuel the FinTech’s growth.
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