Betterment 50/50 Portfolio
The Betterment 50/50 Portfolio sits at the midpoint of Betterment's risk spectrum, splitting the portfolio roughly equally between global equities and bonds. Betterment, founded in 2010 and one of the largest robo-advisors in the United States, constructs this allocation using broadly diversified index funds across domestic and international stocks and a mix of bond types including government and corporate debt. It represents a classic balanced approach implemented through Betterment's tax-optimised automated platform.
Investment Philosophy
The 50/50 allocation draws on the long-standing principle that combining stocks and bonds in roughly equal measure provides a meaningful reduction in volatility relative to an all-equity portfolio, while still delivering participation in equity market growth. Betterment applies this logic within a globally diversified, low-cost index framework, using academic research on portfolio construction to set the weights across sub-asset classes.
Who It's For
This portfolio suits investors with a moderate risk tolerance who want meaningful growth but also a cushion against large equity drawdowns. It is appropriate for someone with a medium-to-long time horizon, such as an investor in their forties saving for retirement, or anyone who knows from experience that they are likely to feel significant discomfort during a 30-40% equity market decline.
Pros
- Balanced stock-bond split reduces volatility compared to all-equity portfolios
- Global diversification across equities and bond types reduces concentration risk
- Low-cost, passive index approach minimises fees
Cons
- The 50% equity allocation limits long-run growth potential relative to higher-equity portfolios
- Bond holdings are sensitive to rising interest rates, which can create short-term losses in that sleeve
- Market-cap weighting on the equity side produces heavy US concentration in periods when the US market is dominant
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Target Allocation
Performance Snapshot
Rolling Returns
| Period | Low | Average | High |
|---|---|---|---|
| 1 Year | -27.3% | +7.3% | +41.9% |
| 3 Year | -6.3% | +6.6% | +18.1% |
| 5 Year | -0.1% | +6.5% | +14.6% |
| 10 Year | +4.0% | +6.6% | +9.7% |
Growth of $10,000
Historical Drawdown
Percentage decline from the portfolio's peak value at each point in time.
Rolling Returns
Annualised return for each rolling period ending on that date.
Annualised return for each 1Y period ending on that date.