Investing can be challenging, especially when you’re just getting into it. There are many new terminologies and many options out there that may come across your desk.
One of those may be trying to decide between utilizing a robo-advisor financial service like Wealthfront Performance or going with an S&P index fund.
Either one has its advantages and disadvantages. For those looking at Wealthfront Performance, you’re going to look at a more hands-off approach which could be perfect for you.
Especially if you have limited time available to those looking for a wider diversity of stocks and a market that’s easy to predict, the S&P index fund idea could be the right choice.
No matter what, though, the key to determining which avenue is the right one for you is knowledge. So in this quick article, we’re going to take a look at Wealthfront Performance versus S&P index funds in a head-on-head comparison.
What is the Difference?
Before even diving into the benefits of going with a Wealthfront Performance account, you must understand the differences between an index fund and an ETF.
The biggest is the way that they are traded. ETFs can be traded throughout the day. However, index funds can only be purchased at the end of the day.
Other than that, ETFs have a lower minimum investment threshold, they’re more tax efficient, and they are very cost-effective to own.
These are the main differences, and they can be looked at as not only the differences between ETF and index funds but that Wealthfront Performance and an S&P index fund.
Which One is More Popular?
The popularity of which option is the better option is the funds you have available and what you’re looking for in the long run. If you’re looking for a set-it-and-forget-it option, then Wealthfront Performance is a great option.
Along those lines, there are also management fees, and a lot of index funds may not have this aspect. On the flip side, it is easier to navigate and does come with some built-in systems that could be potentially beneficial.
In the end, both of these options, both Wealthfront Performance and S&P index funds, have their good and bad points, and you have to figure out if it fits with your investment style and end goals.
Pros & Cons: Wealthfront Performance vs. S&P
To understand if you should invest your money in something like wild front performance or an S&P index fund, you need to know the advantages and disadvantages of each. So we have crafted a pro and cons list that should be able to help you do that:
Wealthfront Performance
Pros:
- ETF expense ratios that are low
- daily harvesting of tax loss
- rebalances automatically
Cons:
- unable to buy fractional shares
- lack of human investment advisors
S&P Index Fund
Pros:
- a wide diversity of stocks available
- low expense ratios
- easier to predict
Cons:
- not as flexible as other investment options
- no professional management built-in
Price Range: Wealthfront Performance vs. S&P
When it comes to price regarding both of these options, there are some varying metrics that you should be aware of.
The first is, of course, that Wealthfront Performance has a $500 minimum investment. Along with that, there is a.25% account management fee. The ETF expense ratio averages out at .08% and can go all the way up to 11%.
The S & P index fund will depend on the financial institutes you go through, but they tend to average at an expense ratio of about 03%.
In addition, some of the financial tools will have a minimum investment account and other fees, while others will offer no fees and no minimum requirements.
The Verdict: Wealthfront Performance vs. S&P
Figuring out which one of the options is best for you is going to be solely down to your end goal. However, if you are looking for an overview of whom best Wealthfront Performance is suited for, we have a few criteria that you can look at:
- great for new investors with little time
- those looking for a financial advisor that gives you multiple options
- investors looking for taxable accounts
If you’re an investor with some experience and want a little more control of the investments in your portfolio, then the S&P index fund could be a better option.
Final Thoughts on Wealthfront Performance Vs. S&P Index Fund
Both options have their advantages and disadvantages. You will have to weigh those advantages and disadvantages against your end goals to see whether one is better for you than the other.
We hope that all the information we’ve given you helps you in this decision-making process.