SoFi Announces Changes to Wealth Portfolios

On Tuesday, online lending platform SoFi announced it was making changes to wealth portfolios. The lender reported that it wants to help users make the smartest investment decisions possible so that they can continue on the path to their goals. It was also reported that each month SoFi will discuss the economy, update its forecasts based on what the market is doing, and every now and then tweak the allocations within its member portfolios. SoFi made changes in all five risk strategies – Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and Aggressive.


“Our lowest risk portfolio invests heavily in bonds, which may be appropriate for someone investing with a lower tolerance for risk or a shorter time horizon, like under three years. With bonds, there are three options: Short-term bonds are considered lower-risk/lower-reward, intermediate-term bonds are considered moderate-risk/moderate-reward, and long-term bonds are considered higher-risk/higher-reward. Please do keep in mind that all investing comes with the risk of loss. The Conservative strategy investments are tilted towards short-term bonds because they offer the lowest risk and often perform better when interest rates are rising (the environment we’re in currently). However, we’re currently reducing some of the short-term bonds in favor of some intermediate-term bonds. Overall, this is still a cautious approach, but we believe that these new allocations will better position the portfolio.”

Moderately Conservative

“The Moderately Conservative strategy is also weighted toward short-term bonds, so it’s a fairly cautious approach. Historically, we’ve selected both investment-grade bonds (lower risk, lower interest rate) and high-yield bonds (higher risk, higher interest rate). Now, we’re reducing some of that high-yield exposure and increasing the amount of investment-grade bonds to lower the overall risk of this portfolio. This strategy also invests a bit in the stock market. Our approach here (and in other strategies) is to balance our investments across the globe. We’re putting a little less in Emerging Markets, less in U.S. Markets, and more in Developed Markets outside the U.S. (like Japan, parts of Europe, and Canada). We believe that these new allocations will give this portfolio a relatively better chance to grow.”


“Similarly to the Moderately Conservative strategy, we’ve significantly reduced investments in high-yield bonds and increased the amount of investment-grade bonds. We’ve also added two new core bond ETFs. Overall, this approach gives a diversified approach to bonds and reduces the anticipated risk of this portfolio.In the stock market, we’re again balancing our approach: putting a little less in Emerging Markets, less in U.S. Markets, and more in Developed Markets outside the U.S. (like Japan, parts of Europe, and Canada).”


Moderately Aggressive

“In the Moderately Aggressive strategy, we wanted to increase stock investments in Developed Markets outside of the United States (such as parts of Europe, Canada, and Japan). To do this, we reduced stock investments in Emerging Markets and U.S. Markets, as well as reduced investments in high-yield bonds in favor of core U.S. bonds. We believe this offers a more optimal risk/reward trade-off, based on the current market environment and the potential for rising interest rates.”


“Over the past year and a half, we have seen solid performance in stock markets in U.S. and Emerging Markets. We upgraded our anticipated relative stock investment performance in Developed Markets outside the United States (such as parts of Europe, Canada, and Japan), so we’ve increased investments there. While U.S. markets still make up the largest portion of this portfolio, the current approach aims to balance out investments across the globe.”

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