Marcus Invest Impact Portfolio (Review)
Marcus Invest is a new robo-advisor with a solid sustainable offering in addition to online banking services.
SustainFi Updated July 18, 2021
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Rating: Good (3.8 / 5)
- Low-cost Impact Portfolio
- Relatively high allocation to environmental, social, and governance (ESG) funds
- Good portfolio construction
- Easy signup process
- Online banking services (checking and high yield savings accounts, Certificates of Deposit, personal loans)
- No fossil free options
- No access to human advisors
- No tax-loss harvesting
- No direct indexing
|SustainFi Rating:||3.8 / 5|
|ESG options||The Impact portfolio invests in ESG funds for most stocks except real estate|
|Investment expense ratio (ESG portfolios)||0.11-0.19%|
|Accounts supported||• Individual and joint investment accounts
• Traditional, Roth, and SEP IRAs
• 401k rollovers
|Best for||One-stop shop for robo-advisor, high-yield savings accounts, and personal loans|
What is Marcus Invest?
Goldman Sachs launched its robo-advisor, Marcus Invest (named after one of the bank’s founders, Marcus Goldman), in early 2021. Goldman Sachs is a top Wall Street investment bank that has been in business since 1869.
Although Marcus Invest is a new robo-advisor, Goldman Sachs has already been offering financial services through the Marcus platform. The platform also provides high-yield savings accounts, personal loans, and budgeting software. The one thing Marcus doesn’t provide is access to human advisors.
Signup process. The signup process is seamless. The robo-advisor asks you a few questions about your financial situation, how long you plan to invest for, and your risk tolerance (from none to substantial). You can adjust your portfolio later to make it more conservative or more aggressive.
Portfolio options. The robo-advisor has three investment options: Goldman Sachs Core, Goldman Sachs Impact (the sustainable option), and Goldman Sachs Smart Beta.
Account minimum. You need at least $1,000 to start investing, higher than no-minimum robo-advisors such as Acorns.
Management fee. Marcus Invest charges an account management fee of 0.35% ($35 annually on a $10,000 investment.) There is no extra management fee for choosing the Impact Portfolio.
Fund expense ratios. In addition to the management fee, you need to pay the expense ratio of the funds included in the portfolio. These fees go to fund managers, not to Marcus Invest. The Impact Portfolio costs 0.11%-0.19% vs. 0.05%-0.16% for the conventional, Core, Portfolio.
Account types. Marcus Invest supports individual and joint taxable investment accounts and traditional, Roth, and SEP IRAs. In addition, you can get a checking account, a high-yield savings account with a 0.50% APY (one of the best robo-advisor APYs), and personal loans between $3,500 and $40,000.
Human advisors. Marcus Invest doesn’t provide access to human financial advisors, even a la carte. If you are looking for human advisors, we suggest Personal Capital. You can also just get a financial planner.
Automatic rebalancing. Marcus Invest will automatically adjust your holdings if the portfolio strays from the allocation that best suits your goals. Nearly all robo-advisors offer this feature.
Tax-loss harvesting. Marcus Invest doesn’t offer tax-loss harvesting, a tax minimization strategy that involves selling loss-making investments to reduce your tax bill. However, Marcus Invest provides a tax minimization strategy that includes tax-free municipal bond funds in taxable accounts and sells funds in order of the lowest tax burden when the portfolio is rebalanced.
Compare robo-advisors with sustainable options
Marcus Invest Impact Portfolio
The Impact Portfolio is one of the three portfolios Marcus offers. It is a socially responsible portfolio that puts most of your assets in environmental, social, and governance (ESG) funds. We found that nearly all stocks in the Impact Portfolio come from low-cost ESG exchange-traded funds (ETFs), which is an improvement on many other sustainable robo-advisor options.
Marcus Invest mostly uses low-cost ESG funds from the iShares family:
- U.S. large-cap stocks: iShares ESG Aware MSCI USA ETF (ESGU)
- U.S. small-cap stocks: iShares ESG Aware MSCI USA Small-Cap ETF (ESML)
- Developed markets stocks: iShares ESG Aware MSCI EAFE ETF (ESGD)
- Emerging markets stocks: iShares ESG Aware MSCI EM ETF (ESGE)
- Conventional funds for bonds and real estate
A high percentage of assets is invested in ESG funds. For a 70% equity / 30% bond portfolio, 68% of assets are invested in ESG funds. This is better than the Ellevest Impact option that only puts 44% of assets in ESG funds. Betterment’s Broad Impact and Social Impact Portfolios are comparable, investing 72-73% of assets in ESG funds.
The ESG funds Marcus Invest uses are inexpensive. The cost of the funds ranges from 0.15% to 0.25% ($15-$25 annually on a $10,000 investment), which is relatively cheap for sustainable funds. According to Marcus Invest, the expense ratio for the overall portfolio is between 0.11% and 0.19%, depending on your risk profile. The 70% equity and 30% bond portfolio cost 0.17%. (This does not include the 0.35% fee that Marcus Invest charges to manage your assets.)
Reduced fossil fuel exposure vs. conventional funds. While the iShares ETFs Marcus Invest uses contain fossil fuel companies, they own less energy than conventional funds. They also exclude tobacco companies, thermal coal, and certain weapons manufacturers.
This is what the holdings of the Impact option look like:
Marcus Invest Impact Portfolio Composition (70% Stocks, 30% Bonds)
|Asset Class||Fund||Expense Ratio||ESG Fund?||Allocation||% of Portfolio in Energy||MSCI Rating||Sustainalytics Rating|
|U.S. Stocks||iShares ESG Aware MSCI USA ETF (ESGU)||0.15%||Yes||40%||5.8%||6.7||4 / 5|
|Developed Markets Stocks||iShares ESG Aware MSCI EAFE ETF (ESGD)||0.20%||Yes||18%||7.2%||8.7||3 / 5|
|U.S. Small-cap Stocks||iShares ESG Aware MSCI USA Small-Cap ETF (ESML)||0.17%||Yes||7%||4.3%||6.1||4 / 5|
|Emerging Markets Stocks||iShares ESG Aware MSCI EM ETF (ESGE)||0.25%||Yes||4%||5.6%||7.6||3 / 5|
|U.S. Real Estate||Vanguard REIT ETF|
|0.12%||No||1%||0.0%||5.5||3 / 5|
|International Real Estate||Vanguard Global ex US Real Estate ETF (VNQI)||0.12%||No||1%||1.7%||4.9||2 / 5|
|U.S. Short-term Municipal Bonds||SPDR Short Term Muni Bond ETF (SHM)||0.20%||No||16%||NA||NR||NR|
|U.S. Municipal Bonds||iShares National Muni Bond ETF (MUB)||0.07%||No||10%||NA||NR||NR|
|U.S. High Yield Bonds||SPDR Bloomberg Barclays High Yield Bond ETF (JNK)||0.40%||No||3%||NA||3.9||NR|
|Portfolio Total||0.17%||68% of Portfolio in ESG funds||100%||5.9%||7.2||3.7 / 5|
Data as of 6/30/2021. Note: numbers may not add up due to rounding.
Marcus Invest Core vs. Impact Portfolio comparison
Compared to the Marcus Invest Core Portfolio, the Impact Portfolio invests less in energy and has improved ESG ratings from rating agencies Sustainalytics and MSCI.
|Portfolio||Expense Ratio||% of Assets in ESG Funds||% of Assets in Energy||MSCI ESG Score||Sustainalytics ESG Rating
|Impact||0.17%||68%||5.9%||7.2||3.7 / 5|
|Core||0.09%||0%||7.0%||6.1||2.9 / 5|
Data as of 6/30/2021. Note: assumes 70% stocks / 30% bonds. Fossil fuel exposure and Sustainalytics ratings are for stock funds only.
- Marcus Invest is a solid option if you also need a banking platform and do not expect to work with a human financial advisor
- We hope to see portfolios with fewer fossil fuel stocks going forward
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.