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E-Trade Core Portfolios review 2022

Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.

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E-Trade Core Portfolios Logo

Best For

  • Cost-conscious investors
  • Existing E-Trade customers
  • Low-cost funds

E-Trade Core Portfolios offers a reasonably priced robo-advisor with some of the lowest-cost portfolios in the industry, making it a good fit for those looking to keep a lid on their costs. Those looking for alternative investments such as socially responsible funds can add an allocation to their portfolio here. And with the ability to purchase fractional shares, customers can get all their money working for them immediately. This robo-advisor makes a good fit for existing E-Trade customers who are looking for someone to manage their portfolio or a portion of it and still keep everything with a name they trust. However, E-Trade doesn’t offer a competitive cash management account, and it lacks tax-loss harvesting, one of the elements of top robo-advisors. 

If you’re looking for unlimited access to human advisors and a solid cash management account, Betterment is worth looking into, and Schwab Intelligent Portfolios is another good pick here. If you don’t have the higher minimums required by those two services but still want a low-cost advisor, check out SoFi Automated Investing. And if you need tax-loss harvesting, Wealthfront should be on your shortlist, too.

E-Trade Core Portfolios at a glance

Star Rating

4
  • Cost: 4 of 5
  • Investments and Portfolios: 4 of 5
  • Account Types: 3.5 of 5
  • Features and Tools: 4 of 5
  • Customer Experience: 5 of 5
  • Account Minimum:
    $500 for investment accounts
  • Management Fee:
    0.30 percent of assets annually
  • Account fees:
    $75 transfer-out fee
  • Portfolio Mix:
    About a dozen funds across five taxable and four tax-sensitive portfolios, including smart beta and socially responsible funds
  • Fund Expense Ratio:
    Average: 0.06 percent, with funds’ expense ratios running from 0.03 to 0.40 percent
  • Account Types:
    Individual and joint taxable, custodial, traditional IRA, Roth IRA, rollover IRA, SEP IRA
  • Cash Management Account:
    A basic savings account with low interest, no monthly minimum
  • Customer service:
    Email, phone, online chat are all 24/5; in-person assistance at 30+ branch offices
  • Tax Strategy:
    No tax-loss harvesting, tax-free municipal bonds in some portfolios
  • Rebalancing:
    Yes
  • Tools:
    Portfolio analyzer, retirement planner
  • Promotion:
    None

Pros: Where E-Trade Core Portfolios stands out

Reasonable management fee

E-Trade’s robo-advisory charges a reasonable management fee for what it offers – 0.30 percent annually of your assets – a figure that’s just above what could be called the industry standard. In practical terms, that fee means you’d pay $30 each year for every $10,000 managed by E-Trade. This fee includes all the routine costs of the robo-advisor service. That’s serious savings over a traditional human advisor where 1 percent might be more common. However, as is typical in the industry, you’ll pay an additional charge for any ETFs (more below). 

A management fee is one of the largest expenses you’ll pay at a robo-advisor, and you’ll want to make sure you’re getting your money’s worth. Rivals such as Wealthfront and Betterment offer extra features for a lower management fee (0.25 percent), while Schwab Intelligent Portfolios doesn’t charge a management fee at all, though it has a steeper $5,000 minimum.

Low-cost funds

E-Trade Core Portfolios offers one of the lowest-cost portfolios around. In fact, the expense ratio of an average portfolio almost couldn’t go any lower. An average portfolio has a weighted expense ratio of just 0.06 percent. That translates into $6 annually for every $10,000 invested. 

Now, this is money that goes to the companies managing these funds, not E-Trade itself. But everyone has to pay expense ratios, and it’s vital to minimize them where you can. And this cost comes on top of the management fee that you have to pay to E-Trade. These fees are paid seamlessly, as is typical for any expense ratio with an ETF. 

Almost no rival robo-advisor gets below E-Trade’s cost, SoFi Automated Investing being a notable exception.

Fund options

In addition to the core funds that comprise portfolios, E-Trade also offers a couple other choices that are not standard in most robo-advisor portfolios — a socially responsible ETF and a smart beta ETF. You can opt in to these selections, if you like, but you don’t have to make them part of your portfolio. 

E-Trade adds a portion of your money to a socially responsible ETF that focuses on companies with good records in environmental, social and governance issues. These funds often exclude companies in industries such as armaments or fossil fuels if they don’t meet the fund’s criteria. 

A smart beta fund looks for certain factors that might drive higher returns with lower risk or achieve the same returns as a traditional index fund with lower risk. This kind of fund often takes a more active approach to investing, with fund managers searching out investments that they think can generate better risk-adjusted returns.

Fractional shares

E-Trade Core Portfolios also uses fractional shares when it builds your portfolio, and not all robo-advisors do. This feature is valuable because it allows you to put all your money to work immediately. Without this feature, your money might be sitting in cash until you have enough to buy a full share, as happens at some rival robo-advisor services. So the market could be rising while you’re waiting to have enough money to buy. 

E-Trade allows you to not only buy fractional shares but reinvest your portfolio’s dividends in them, too. So any time you get a cash dividend, it’s rolled back into new shares of your investments. Again, that keeps your money invested and working for you at all times.

Access to financial consultants

E-Trade Core Portfolios also provides access to financial consultants, who can help you decide how to invest and build your portfolio. They can help analyze your current portfolio, perhaps helping you see where an additional fund might balance out your portfolio. And it can be helpful to simply run an idea by someone with financial expertise to see if it makes sense. 

While this access can be an added perk, you will want to be careful about being upsold on other features that might fall outside the robo-advisor’s management fee. They may sell one-time commission-based services or ongoing services, and those could run up your expenses with features that don’t really add much incremental value to what the robo-advisor already offers. 

Quick comparison of Robo-Advisor options:
Robo-Advisor Overall Rating Cost Rating Investments and Portfolios
E-Trade Core Portfolios logo
4 4 of 5
Betterment review 2022 logo Read Our Review
5 5 of 5
SoFi Automated Investing review 2022 logo Read Our Review
5 3 of 5
Wealthfront review 2022 logo Read Our Review
5 4 of 5

Cons: Where E-Trade Core Portfolios could improve

Tax strategy

E-Trade offers only minimal tax strategy in its account, a shortcoming of the service relative to the top robo-advisors. To help generate better tax-efficiency, E-Trade will use municipal bond ETFs, which are tax-free at the federal level, in place of a taxable bond fund. This feature only makes sense in taxable accounts, not in tax-advantaged accounts such as IRAs. E-Trade allows you to opt into this feature at any time, and you can switch it off, as you like. 

Unfortunately, this is E-Trade’s main tax strategy, and the robo-advisor does not offer tax-loss harvesting, which can save investors substantial money, by recognizing investment losses on this year’s taxes and offsetting taxable gains. Wealthfront and Betterment are two notable leaders in offering this premium feature. 

Cash management account

E-Trade offers only a basic savings account, and you can open it as another part of your E-Trade experience, meaning the account will appear on your dashboard along with your other accounts. The savings account pays minimal interest, and it has the basic functions with no minimum, operating mainly as a place to amass your cash while you wait to invest it. It’s nothing special. 

In contrast, some of the top cash management accounts give you checking-like features, including bill pay, a debit card and check writing, as well as early direct deposit, no monthly minimums or fees, no-fee ATMs and a competitive interest rate on your money. Two of the most popular are from the top robo-advisors Wealthfront and Betterment. 

Account minimum

E-Trade requires a $500 minimum to get started with Core Portfolios, and sure, that’s not a lot in the big scheme of things. But it’s still higher than most rivals, who let you get started with no minimum at all. Still, it does beat a few rivals, such as Schwab Intelligent Portfolios, with its $5,000 account minimum, and Personal Capital, with a hefty $100,000 minimum.

Bottom line

E-Trade’s robo-advisor delivers all the core functionality and offers a mix of features that should appeal to many kinds of customers: 

  • A reasonable management fee and low-cost portfolios make E-Trade an attractive option for cost-conscious investors. 
  • Investors looking for alternative investment options may find something to like here with smart beta and socially responsible options – and the ability to buy fractional shares. 
  • The ability to speak with human financial consultants could be a plus for many customers, but with the noted caveats. 

Those who need features such as tax-loss harvesting and an excellent cash management account should check out Wealthfront and Betterment, both of which excel in these areas. Those looking to consolidate their accounts with one financial institution should consider Fidelity Go (part of Fidelity Investments), Marcus Invest (part of Goldman Sachs) and J.P. Morgan Automated Investment (part of J.P. Morgan Chase). 

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