According to this article [1], Since late February, however, Wealthfront has strayed from this radical idea. Instead of putting investors solely into a low-cost indexing strategy, Wealthfront has now decided to invest 20% of its investors’ funds into an internal “risk parity” fund, which in turn is invested mostly in complex derivatives known as total return swaps. The fees associated with the old strategy averaged out at 0.09%; the new strategy, by contrast, carries a fixed fee of 0.50%, all of which goes directly to Wealthfront, plus the costs associated with buying the swaps.
It seems shady to me, particularly that it's an opt-out vs. opt-in change.
[1] https://www.wired.com/story/beware-roboadvisors-wealthfront-betterment/
Submitted April 08, 2018 at 01:56PM by mdatwood https://ift.tt/2GKmAHf
