Creating ETF Portfolios with ‘Folio’ Investing
As the exchange traded fund space grows in size and popularity, online brokerage firms have set up special perks for trading ETFs. Some brokers offer discounted trades or even commission-free transactions, while others provide integrated ETF portfolios.
We recently covered low-cost online brokers for ETFs, but here’s one we missed. Folio Investing allows investors to manage ETFs as transparent, low-cost investment portfolios, or “Folios.”
On the institutional platform, advisors can invest in portfolios with low asset based fees, reducing cost considerations when constructing a well-rounded portfolio. The asset based pricing is negotiated based on each advisor’s practices. On the other hand, advisors can still use a transaction based plan with $7 per trade.
For retail investors, a basic plan comes with $4 per ETF trade if executed within a twice daily window, or $10 trades outside of the windows. Additionally, retail clients can sign up for the Folio Unlimited Plan that costs $290 per yer, which comes with an unlimited number of trades.
While investors can create their own portfolios with ETFs, Folio Investing also offers “Ready-to-Go Folios,” such as the company’s ETF-based target-date folios, which recently celebrated a five-year record of outperformance, according to a press release. The target-date folios include a more diversified blend of commodities, REITs, TIPs and other asset classes to help reduce volatility and generate higher returns.
In related news, Charles Schwab recently launched a new platform that will allow investors to trade over 100 ETFs commission-free. [Schwab Unveils ETF Platform]
For more information on trading ETFs, visit our ETF 101 category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
