Folio - Product Overview
Folio Investing offers customizable Ready-to-Go investment portfolios or allows investors to build their portfolios from scratch. These pre-made, customizable, Ready-to-Go portfolios are based on specific investment needs and areas grouped into ten categories as a start-off for investors. These include Target Date RTG, Low Volatility RTGs, Asset Allocation RTGs, Bond RTGs, Fundamental RTGs, Geographic RTGs, Investment Style RTGs, Market Index RTGs, Sector/Industry RTGs, and Strategy RTGs.
TYPES OF CUSTOM PORTFOLIOS
Folio Investing offers custom-made “Ready-to-Go” investment portfolios, a build-your-own custom portfolio, and a combination of both. Allowing no limit on the number of accounts clients may have, Folio Investing offers over 160 RTGS under the ten general headings: Target Date RTGs, Low Volatility RTGs, Asset Allocation RTGs, Bond RTGs, Fundamental RTGs, Geographic RTGs, Investment Style RTGs, Market Index RTGs, Sector/Industry RTGs, and Strategy RTGs. These RTGs provide a starting point for investors and can be further customized based on basic security.
Ready-to-Go Investment Portfolios
Folio Investment is known for its use of RTGs, which are pre-built portfolios with a specific investment strategy in mind. Based on these specific investment strategies, RTGs can be grouped into ten basic categories which are seen as starting points for investors. RTGs give investors a space to gain comfort in customizing and even building their portfolios, utilizing their preferences and strategies.
Target Date RTGs
These RTGs become necessary when investors have a specific objective, for example, college or retirement. They are easy to manage security settings which are adjusted over time to keep a balance of volatility and performance. They have a goal of increasing potential return while decreasing risk as the target date approaches.
Low Volatility RTGs
Low Volatility RTGs promote precisely what the name states, low volatility. These RTGs allow for steady gains and losses, none occurring to the regular degree of the market. Folio Investment offers two types, the Low Volatility folio comprising ETFs and stocks, and the Low Volatility ETF consisting of only ETFs.
Asset Allocation RTGs
This category of RTGs allows for broad market exposure, with diversity being found through the investment in varying asset classes which perform in different ways at different times. These folios follow asset allocation models. This is based on changing time frames and risk factors focused around the use of ETFs and towards the goal of diversification.
Promoting a consistent stream of income, the investment in fixed securities such as bonds limits the risks investors may have when dealing with more fluid accounts. Folio Investing offers bond folios made up of ETFs. These ETFs do not usually carry sales charges or minimums and are seen having lower expenses than other mutual funds.
Information gained from the “fundamental” analysis of public company information such as dividends, sales, book value, and cash flow is used to determine the security constraints of fundamental RTGs. This allows investors to make more knowledgeable and assertive investment decisions.
Folio investments provide their clients with the benefit of the international trading market with their geographic RTGs. These RTGs allow exposure to international markets, which are sometimes seen to have varying economic cycles. With the use of ADRs and ETFs, investors are provided with securities outside the US, exposing them to both developed and emerging markets they can tap into.
Investment Style RTGs
Folio Investing offers investment style RTGs. This is based on company public information such as market capitalization rates, investment style RTGs provide small-cap, mid-cap, and large-cap companies with opportunities for growth, blend, value, and income earning.
Market Index RTGs
Another offering of Folio Investing is US equity indices. This includes the S&P 500, and the NASDAQ 100, and Market Index RTGs capture broad market movement.
Sector/Industry RTGs focus on investments occurring in specific industries, such as the aerospace industry. Though these RTGs zone in on specific investor interests and may exhibit high growth potential, they may also be considered volatile.
Strategy RTGs is another offering of Folio Investing. These RTGs are geared towards the more creative investors and utilize many investment strategies.
Investment portfolio customization first takes into consideration the overall goal of the investment. That is, whether the goals investors have are long term or short term. Short term goals would require more conservative investment, with the money being required to become fluid in a short time as opposed to a goal towards retirement which makes room for more aggressive investments.
Risk tolerance is another guide to customizing one’s portfolio with Folio Investing. If an investor is aware that they cannot manage too much risk, their portfolio can be tailored to suit these needs.
Folio Investments also allows customization under “personal values”. This is where security options can be selected to screen for industries with the use of anything not following the values of the investors, for example, tobacco, gambling, and weapons and so on.
Other customizable options offered by Folio Investments include:
- Addition and removal of securities in Ready-to-Go portfolios.
- Automated filters to exclude securities or entire sectors.
- Socially Responsible Investment (SRI) filter geared towards filtering based on the investor's values.
- One click rebalancing used to keep the right weighting based on changing security features.
- Tools available for tax management and proxy voting.
- The ability to own securities in any amount needed even fractions of shares.
In 2016 Folio Investing partnered with investment company First Affirmative Financial Network. The focus of First Affirmative Financial Network is sustainable, responsible, impact (SRI) investing and the integration of environmental, social and governance (ESG) strategies. Investor portfolios can now be filtered based on sector, and social issues allowing investments to be aligned to core values. The ESG factor is a way of telling the market behavior of companies investors are eyeing.
Folio Investing has been one of the first companies to offer social filtering on an online investment market platform. ESG statistics allow investors to tell the best and worst companies in specific categories of Folio Investments. In partnership with First Affirmative Financial, Folio Investing offers three lines of sustainable, responsible and ESG investments. The first is a custom sustainable investment solution. This includes portfolios with stocks and ETFs that reflect the values, ethical preferences and financial goals of the investors. Secondly, there is a Multi-Manager Account. These are investment models that integrate ESG guidelines into the investment analysis process. Thirdly there is Managed Mutual Fund. This is a portfolio of mutual funds integrating the ESG criteria into the investment analysis process.
Folio Investment allows for the filtering of large-cap equity, with both the Large-Cap ETF folio and the Large-Cap Blend folio. These folios follow the US S&P 500 market indices where the Large-Cap Blend folio is arguably less volatile than the Large-Cap ETF which has the same volatility as the overall market.