What to Expect When You Invest With Ellevest

By Dr. Sylvia Kwan

Some things are way better when they’re personalized for your life. Subscription boxes. Dating apps. Movie recommendations. Pizza. In fact, in the 21st century, there’s really very little that can’t be customized just for you. Your investing options should be personalized, too — not just a few cookie-cutter choices mapped to your “risk tolerance” (whatever that is) instead of your real-life goals.

Here’s how we build personalized investment portfolios for our clients.

Step 1: We get to know you and your goals

Ellevest is a goal-based investing platform, meaning we help you invest toward your specific money goals — whether we’re talking about retiring someday, starting a business, buying a house, having kids, going on an epic vacation for your next milestone birthday, or just building wealth for the future. You name it.

The first step in building you an investment portfolio is getting to know you and your goals. We start by asking about things like your age, education, salary, and gender, because all those things affect where you start and where you’re going. Then we ask about your goals — not only what they are, but also how long you have until you want to hit them. For some of our goals (like retirement), we’ll help you decide on a target amount. For others (like that dream vacay), we’ll ask you how much you’re aiming for.

Step 2: We calculate how much risk you can afford

The riskier an investment is, the bigger the chance that you’ll lose money if you buy it — but generally speaking, riskier investments can also make you more money if things go well. Think of it this way: If you had to choose between two investments, and they both had the potential to earn you the exact same amount in returns, but one was much riskier than the other, wouldn’t you pick the safer one? All else being equal, of course you would. That’s why riskier investments have to offer higher returns: to compensate investors for taking on the extra risk.

Some other investing platforms kick things off by asking you what your “risk tolerance” is. Maybe some people feel comfortable answering that question, but do they really know what the right amount of risk is? At Ellevest, we don’t bother asking that question — because one risk level doesn’t fit everyone’s money goals. So we determine the amount of risk that we believe will best help you hit your goal.

To figure out what that risk level might be, we look at your timeline. Typically, the longer you have until you’re going to need the money, the more risk can go in your investment portfolio. That’s because there’s more time for the markets to potentially bounce back from any downturns that happen in the future.

Step 3: We design a portfolio with that much risk

We have two main tools in our toolbox when it comes to designing your portfolio: 1) asset allocation, and 2) diversification within asset classes.

Asset allocation

Asset allocation is a fancy way of saying how much of your investment portfolio is invested in different “asset classes.” Broadly speaking, the big three asset classes are stocks, bonds, and alternative investments (aka everything else). But you can also get more specific, with different types of stocks, different types of bonds, and different types of alternatives.

In general, stocks tend to increase the riskiness of a portfolio, and bonds tend to reduce the riskiness of a portfolio — and certain types of stocks and bonds do this more than others. So if you have a long timeline, we might design a portfolio that is mostly invested in stocks, and if you have a shorter timeline, we might make it mostly bonds. It’s the mix of all the different asset classes that gets you to the right level of risk.

Ellevest uses 21 different asset classes when we build your investment portfolio. We worked closely with investment research company Morningstar to decide on which ones to use after serious research. That’s more than certain other digital advisors use, and we did it on purpose — having more asset classes gives us more options; more flexibility to build the portfolio that we believe is right for you. Plus, some of them can help lessen the blow from certain curveballs that come your way while you’re investing: market downturns and, in certain cases, inflation.

What to Expect from Ellevest Digital

We don’t use all 21 asset classes in every client’s investment portfolio. But because we have so many available to us, we can be more selective and choose asset classes that we believe give you the best chance of reaching your specific goal.

Diversification within asset classes

You know the saying, “Don’t put all your eggs in one basket?” Diversification is the same idea, wrapped in finance lingo. Basically, you don’t want to put all of your money into one investment, because if it tanks, it will hurt your bottom line a lot more than if only part of your money were in that investment. (Of course, the opposite is true as well — diversifying would stop you from fully enjoying that one investment’s growth — but historically speaking, it just hasn’t been worth the risk.)

Asset allocation is a high-level version of diversification, because our 21 different classes of stocks, bonds, and alternatives all act differently from one another. But then we take it to the next level by making sure that within those asset classes, your portfolio is exposed to specific investments that also behave differently from one another.

Step 4: We choose investments to make it happen

OK, so by now we know about your goals, we’ve calculated how much risk is appropriate for those goals, and we’ve planned out your future portfolio’s asset allocation and diversification. Now for the final piece of the puzzle: choosing the investments themselves.

Ellevest investment portfolios are made up exchange-traded funds (ETFs) and mutual funds. These are baskets of lots of different investments put together — aka they offer built-in diversification. Instead of owning individual stocks, bonds, or alternatives directly, investors can own shares of a fund and still get exposure to those things.

The difference between ETFs and mutual funds

ETFs and mutual funds are similar, but different in a few key ways. First of all, mutual funds are often actively managed (meaning people are paid to choose what goes in the fund), and so they have higher management fees (that’s what pays the people who actually run the fund itself).* ETFs tend to be passive (meaning there are rules that determine what gets included, not people), so they’re less expensive. They also trade like stocks, throughout the day, which makes them more flexible and easier to buy and sell.

For all those reasons, we tend to prefer ETFs. That’s why they’re the only thing we use in Ellevest core portfolios. Ellevest Impact Portfolios rely heavily on ETFs too, but they also include some specialized mutual funds designed to help women — Impact portfolios are built to seek financial returns and social impact by advancing women, and we haven’t been able to do that with ETFs alone.

Oh, and btw, we have pretty tough standards when it comes to deciding which ETFs and mutual funds we include in Ellevest portfolios. You can read all about that here.

How we mix and match funds for your portfolio

We don’t have just one fund that we can use for each of our 21 asset classes. Some of our funds span multiple asset classes, and that can help a lot. For example, let’s say we wanted to put a certain percentage of your portfolio in one asset class, like US Large Cap Value. We might pick one low-cost fund that’s made up of multiple asset classes (including US Large Cap Value), and then pair it with a different (slightly more expensive) fund that’s made up of only US Large Cap Value. Together, they would get you to that total target percentage, but it’s cheaper than just using the second fund alone.

We also choose funds based on the type of investment account you have. For example, corporate bond ETFs often pay interest that’s taxed at a higher rate than other types of investing returns. We would only put those types of investments into a tax-deferred investment account, like an IRA — that would give your money more time to grow without taxes eating into it. So by picking and choosing like this, more of your money can go toward your goals, and less of it goes to Uncle Sam.

Step 5 (through infinity): We adjust your portfolio as needed

The value of the investments inside your portfolio will inevitably change over time. Sometimes, one asset class grows faster than the others. When that happens, your asset allocation can get knocked out of whack, so we’ll make adjustments to keep everything in line with the plan.

Also, remember above, when we talked about how much risk you can afford based on your timeline? Well, with every passing year, your timeline shrinks. And so we’ll also shift your portfolio’s asset allocation as you get closer to your goal date.

So you might not be able to tell, because it only takes a few minutes — but when you start an Ellevest account, there’s some pretty fancy stuff going on behind the scenes. Stuff that we think will give you the best chance of hitting your money goals. Ready to get started?


Fund fees are charged by the companies that run the funds in your portfolio and are separate from your monthly membership fee, which is charged by Ellevest.

At Ellevest, fund fees are built into the purchase price of your investments and won’t appear as a separate fee transaction on your statement. For Ellevest core (non-Impact) portfolios, the ETF fund fees can range from 0.05% to 0.10% per year, and for Ellevest Impact Portfolios, these ETF and mutual fund fees can range from 0.13% to 0.19% per year. This range includes blended expense ratios for members’ overall portfolios, not individual fund expense ratios.

© 2023 Ellevest, Inc. All Rights Reserved.

All opinions and views expressed by Ellevest are current as of the date of this writing, are for informational purposes only, and do not constitute or imply an endorsement of any third party’s products or services.

Information was obtained from third-party sources, which we believe to be reliable but are not guaranteed for accuracy or completeness.

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities, and should not be considered specific legal, investment, or tax advice.

The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person.

Investing entails risk, including the possible loss of principal, and past performance is not predictive of future results. Ellevest, Inc. is an SEC-registered investment adviser.

Ellevest fees and additional information can be found at

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Dr. Sylvia Kwan

Dr. Sylvia Kwan is the Chief Investment Officer of Ellevest.