Ellevest Impact Portfolio (Should You Invest With Ellevest?)
We like Ellevest’s emphasis on women-specific investment needs. Their Impact Portfolio includes a fund that invests in companies with women in leadership positions. However, most Impact Portfolios still invest over half of their assets in funds that aren’t socially responsible.
SustainFi Updated July 18, 2021
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Rating: Good (3.8 / 5)
- Focus on women’s financial needs
- One of the lowest cost robo-advisors for larger account balances
- Ellevest is more than a robo-advisor, offering online banking, financial planning, and career coaching
- Easy signup process
- Access to educational resources
- No minimum balance
- A big chunk of the Impact Portfolio assets is invested in conventional funds
- No fossil free options
- No support for joint investment accounts or trusts
- No tax-loss harvesting
- No direct indexing
- Human advisors not included
|SustainFi Rating:||3.8 / 5|
|Management fee||Flat monthly fee depending on the membership tier:
• Ellevest Essential: $1 a month
• Ellevest Plus: $5 a month
• Ellevest Executive: $9 a month
|ESG options||Impact portfolios are available to all membership tiers at no extra charge. They replace large-cap U.S. and international equities and U.S. bond funds with ESG alternatives. Ellevest invests in over 20 traditional funds for other asset classes|
|Investment expense ratio (ESG portfolios)||0.13-0.19%|
|Accounts supported||• Taxable individual investment accounts
• Traditional and Roth IRAs
• 401k rollovers
• Spend & Save accounts
|Human advisors||Not included but you can purchase access to financial coaches and advisors through the platform for an extra fee|
|Best for||Women investors|
What is Ellevest?
Ellevest is a women-owned robo-advisor that targets women investors. They’ve just hit a watershed $1 billion in assets under management.
The founder, Sallie Krawcheck, is a Wall Street veteran who started Ellevest in 2014 to reduce the investing gap between women and men. She was previously the Chief Financial Officer of Citigroup and head of Merrill Lynch.
Ellevest points out that women live longer while earning less than men on average, requiring a different asset allocation. Women also invest too little and leave too much money in cash, missing out on opportunities to grow wealth. Ellevest encourages women to invest more. It also uses women-specific salary curves and life expectancy data. (They also accept male clients.)
According to Krawcheck, 75% of Ellevest employees are female, including an engineering team that is two-thirds female.
In addition to wealth management, Ellevest offers educational resources like digital workshops and guides.
Signup process. The signup process is straightforward. You answer a questionnaire about your age, income, and investing goals. Ellevest will then create a portfolio specific to your goals and risk tolerance. Unfortunately, you don’t get to see the suggested portfolio before you finish the signup process and verify your identity, which could be a hurdle for some.
Portfolio options. The portfolios are made up of low-cost ETFs, though we have also found several higher-cost mutual funds in the impact option. Further, Ellevest has been criticized for overly aggressive asset allocation recommendations (that is, allocating too much to stocks). Perhaps this is their way of correcting women’s underinvestment in the market. You can adjust that.
Account minimum. None. Ellevest’s robo-advisor requires no minimum balance to get started. In early 2021, Ellevest had 123,000 clients with an average account balance of $8,000. For those with over $1 million to invest, Ellevest has developed a Private Wealth Management offering. Private wealth customers get a customized portfolio beyond what the robo-advisor offers.
Management fee. Unlike most robo-advisors, Ellevest doesn’t charge fees as a percentage of your assets. Instead, you pay a flat monthly fee of between $1 and $9 per month, depending on the membership tier. There are three membership tiers:
- Essential: $1 per month. This tier includes robo-advisor access, a cash management account, access to online workshops, and a 20% discount on financial planners and career coaching sessions.
- Plus: $5 per month ($54 per year with the discount.) The Plus tier adds retirement planning to the benefits of the Essential tier. You also get a 30% discount on financial planners and career coaching.
- Executive: $9 per month ($97 per year with the discount.) You get all the Plus tier benefits plus a 50% discount on financial planners and career coaches.
Unlike Ellevest, most robo-advisors charge an asset management fee as a percentage of invested assets. 0.25% to 0.35% is common, translating into $25-$35 per year on a $10,000 investment. But Ellevest’s flat fee structure may actually cost you more if you don’t have a lot invested. For example, if you are an Executive tier member who pays $97 per year and invests $10,000, you are paying almost 1% annually in fees. But if you have $40,000 invested, you are only paying 0.24%, so Ellevest is roughly the same price as Betterment.
Fund expense ratios. You have to pay fund expense ratios on top of the fees charged by Ellevest, but they go to fund managers for putting together the funds. Fund fees across Ellevest Impact Portfolios range from 0.13% to 0.19% vs. 0.05% to 0.10% for the conventional portfolio. For the portfolio that invests roughly 70% equities and 30% bonds, the conventional portfolio costs 0.05% vs. 0.17% for the Impact version.
Account types. Ellevest offers individual taxable accounts and traditional and Roth IRAs. IRAs are available to Plus and Executive members only. Ellevest provides IRA rollover support if you are transferring an IRA from an employer.
Ellevest also offers two cash management accounts, the Spend and Save accounts. They come with a debit card that provides rewards, including an average 5% cashback on eligible transactions. There are no monthly fees, overdraft fees, or account minimums. All funds are FDIC-insured for up to $250,000. You also get reimbursed for ATM fees in the U.S. However, you must start a payroll direct deposit into the account to qualify, and the account doesn’t pay interest.
Human advisors. Human financial advisors are not included in any of the three membership tiers. But you can buy one-off sessions with financial planners at a discounted rate, as much as 50% off if you are an Ellevest Executive member.
Some of the popular packages include:
- Investment Review Package: Ellevest Executive members: $997.50, Plus members: $1,396.50, Essential members: $1,596, Non-members: $1,995
- Resume Review Session: Ellevest Executive members: $200, Plus members: $280, Essential members: $320, Non-members: $400
- Budgeting and debt planning session: Ellevest Executive members: $150, Plus members: $210, Essential members: $240, Non-members: $300
- Career clarity coaching: Ellevest Executive members: $175, Plus members: $245, Essential members: $280, Non-members: $350
Small-group coaching sessions are also offered.
Automatic rebalancing. Ellevest offers automatic portfolio rebalancing, so that your investments are adjusted to keep you on track for reaching your financial goals.
Tax-loss harvesting. Ellevest doesn’t offer tax-loss harvesting, a tax minimization strategy that involves selling investments that lost money to generate losses offsetting taxable gains. However, they include a tax-efficient municipal bond ETF in taxable portfolios to compensate.
Compare robo-advisors with sustainable options
Ellevest Impact Portfolio
Ellevest offers a socially responsible option, the Impact Portfolio. According to our calculation, an Ellevest Impact Portfolio with 71% in equities invests 44% of its assets in sustainable funds.
The Impact Portfolio uses five environmental, social, and governance (ESG) funds. The portfolio that we tested (71% equities, 29% bonds) is using 16 funds, including five sustainable funds. The remaining 11 funds are conventional.
Here are the sustainable funds Ellevest uses:
- U.S. stocks: iShares MSCI USA ESG Select ETF (SUSA)
- Global stocks: Pax Ellevate Global Women’s Leadership Fund (PXWIX)
- Emerging markets stocks: iShares ESG Aware MSCI EM ETF (ESGE)
- Developed markets stocks: iShares ESG Aware MSCI EAFE ETF (ESGD)
- U.S. bonds: Access Community Capital Fund (ACCSX)
The line-up includes the Pax-Ellevate Global Women’s Leadership Fund (PXWIX), a women leadership mutual fund, and Access Community Capital Fund (ACCSX), a mutual fund that invests in underserved communities.
The funds in the portfolio have low expense ratios. The total cost of the funds in the Impact Portfolio is between 0.13% and 0.19%, depending on how much is invested in stocks versus bonds. The 71% equity / 29% bond portfolio costs 0.17%. Individual funds in the Impact Portfolio cost anywhere between 0.03% and 0.53%. Ellevest uses two expensive mutual funds, PXWIX and ACCSX, though it doesn’t put a lot of money in them.
Too many funds in the lineup? The number of funds in the portfolio seems excessive, especially because some allocations are too small to move the needle.
Most of the assets are invested in conventional funds. Surprisingly, most funds in the Impact Portfolios are not ESG funds. In fact, for a portfolio that is 71% in equities, only 44% of assets were invested in ESG funds.
All funds invest in fossil fuels (oil, gas, or coal) companies. All ESG funds included in the portfolio invest in fossil fuels, though to a lesser extent than the conventional options.
Ellevest Impact Portfolio Composition (71% Stocks, 29% Bonds)
|Asset Class||Fund||Expense Ratio||ESG Fund?||Allocation||% of Fund in Energy||MSCI Rating||Sustainalytics Rating|
|U.S. Stocks||Vanguard Total Stock Market ETF (VTI)||0.03%||No||15%||6.1%||5.6||2 / 5|
|Developed Markets Stocks||iShares ESG Aware MSCI EAFE ETF (ESGD)||0.20%||Yes||14%||7.2%||8.7||3 / 5|
|Emerging Markets Stocks||iShares ESG Aware MSCI EM ETF (ESGE)||0.25%||Yes||10%||5.6%||7.6||3 / 5|
|U.S. Stocks||iShares MSCI USA ESG Select ETF (SUSA)||0.25%||Yes||8%||5.3%||7.6||5 / 5|
|Global Stocks||Pax Ellevate Global Women’s Leadership Fund (PXWIX)||0.53%||Yes||8%||0.4%||6.4||4 / 5|
|U.S. Small-cap Stocks||Vanguard Small-Cap ETF (VB)||0.05%||No||6%||5.0%||5.0||4 / 5|
|U.S. Value Stocks||Vanguard Value ETF (VTV)||0.04%||No||4%||13.7%||6.2||2 / 5|
|U.S. Mid-cap Stocks||Vanguard Mid-Cap ETF (VO)||0.04%||No||3%||8.6%||6.3||4 / 5|
|U.S. Mid-cap Value Stocks||Vanguard Mid-Cap Value ETF (VOE)||0.07%||No||2%||15.5%||6.9||3 / 5|
|U.S. Small-cap Value Stocks||Vanguard Small-Cap Value ETF (VBR)||0.07%||No||1%||7.7%||5.1||4 / 5|
|U.S. Real Estate||Vanguard REIT ETF|
|0.12%||No||1%||0%||5.5||3 / 5|
|International Real Estate||Vanguard Global ex US Real Estate ETF (VNQI)||0.12%||No||1%||2%||4.9||2 / 5|
|U.S. Municipal Bonds||iShares National Muni Bond ETF (MUB)||0.07%||No||14%||NA||NR||NR|
|U.S. Short-term Municipal Bonds||iShares Short-Term National Muni Bond ETF (SUB)||0.07%||No||8%||NA||NR||NR|
|U.S. Bonds||Access Community Capital Fund (ACCSX)||0.46%||Yes||5%||NA||NR||4 / 5|
|U.S. High Yield Municipal Bonds||VanEck Vectors High-Yield Municipal Bond ETF (HYD)||0.35%||No||2%||NA||NR||NR|
|Portfolio Total||0.17%||44% of Portfolio in ESG funds||100%||6.0%||6.8||3.2 / 5|
Data as of 6/30/2021
Ellevest Core vs. Impact Portfolio comparison
We compared the Impact Portfolio to the conventional, Ellevest Core, Portfolio. You can see that the metrics for the Impact Portfolio are better. The Impact Portfolio has fewer assets invested in fossil fuels and better scores from ESG rating agencies. However, the funds in the Impact Portfolio also cost more (0.017% vs. 0.05% for the Core Portfolio), and, for some metrics, the difference between the Impact and Core Portfolios wasn’t that great.
|Portfolio||Expense Ratio||% of Assets in ESG Funds||% of Assets in Energy||MSCI ESG Score||Sustainalytics ESG Rating
|Impact||0.17%||44%||6.0%||6.8||3.2 / 5|
|Core||0.05%||0%||8.0%||6.1||2.2 / 5|
Data as of 6/30/2021. Note: assumes 71% stocks / 29% bonds. Fossil fuel exposure and Sustainalytics ratings are for stock funds only.
- We like Ellevest’s emphasis on women-specific investment needs
- However, most Impact Portfolios have over half of their assets invested in traditional funds
- You can get a greater allocation to ESG funds with other robo-advisors, such as the Acorns Sustainable Portfolio
- Going forward, we hope that Ellevest increases the allocation to ESG funds
We compared robo-advisors with an ESG offering based on management fees, ESG portfolio expense ratios, the percentage of the ESG portfolio invested in ESG funds vs. traditional funds, ESG portfolio ratings (from Sustainalytics and MSCI), portfolio exposure to energy, transparency, features like tax-loss harvesting and automatic rebalancing, and access to human advisors.