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Portfolios

Understanding our offerings
How involved do I need to be to make a choice?

We offer options for all - you can opt to have us recommend a portfolio for you or you can pick from our full selection or do both. Portfolios are rebalabnced for you and the allocations are managed by the Portfolio Managers.

Understanding Asset Allocation
What are Asset Allocation portfolios?

Interactive Advisors offers several diversified multi-asset portfolios that are dialled up or down for risk, offer good diversifcation across different asset classes, and attain this diversification by investing in low-cost, liquid ETFs. More information can be found under the 'Resources' drop-down menu in the white paper on Asset Allocation.

How do you create the right Asset Allocation portfolio for me?

To ensure that you invest only in portfolios that are suitable for your investment objectives, risk tolerance and financial capacity, Interactive Advisors assigns all clients a personal client risk score on a scale of one to five, based on their responses to a risk questionnaire. The client risk score and account type (IRA vs. non-retirement) helps Interactive Advisors in determining which Asset Allocation portfolio is right for you. More information about risk scoring can be found under the 'Resources' drop-down menu on the Risk scores page.

Who manages the portfolios?

The Interactive Advisors Investment Management team, under the leadership of Chief Investment Officer Sanjoy Ghosh, manages the Interactive Advisors Asset Allocation portfolios.

Understanding our Range of Portfolios
What products are offered?

Interactive Advisors provides low-cost access to a wide-range of portfolios that differ in the strategies they employ to pursue returns.

Some examples include growth and income portfolios, portfolios that invest in specific sectors such as healthcare and technology, portfolios that track an index, portfolios that invest in socially responsible companies, asset allocation portfolios, and Smart Beta portfolios. Portfolios that trade systematically on a regular cycle are offered using fractional shares and basket commissions, reducing the costs and minimums associated with investing in them. You can view all the portfolios and estimate your cost to invest in them here with details.

Who manages the portfolios?

Portfolios are managed either by our Chief Investment Officer and his Investment Management team or by carefully selected Registered Investment Advisors. We also offer portfolios we oversee that are built on data provided by industry leaders, such as FTSE Russell, Legg Mason, State Street Global Advisors, and Wisdom Tree.

How are these portfolios rebalanced or traded?

Portfolios managed by our Investment Management, which is also responsible for constructing the portfolios, are continually monitored for any relevant events and also periodically rebalanced.

Working with fractional shares
What is a 'fractional share'?
A fractional share is a unit of stock that amounts to less than one full share. More information here
Why are fractional shares useful?
Fractional shares allow you to invest in diverse portfolios with many holdings even with a low investment amount. In essence, fractional shares allow investors to invest lower amounts in a larger selection of stocks and ETFs, some of which may be too expensive for the investor to purchase in whole shares. Interactive Advisors is able to diversify the Asset Allocation Portfolios, Smart Beta Portfolios and the other Diversified Portfolios and offer them to Interactive Advisors clients investing a relatively small amount due to its ability to trade fractional shares.
Can fractional shares be traded on public exchanges?
Stocks cannot be traded in fractions on public exchanges, which means that you need a counterparty willing to transact with you in fractional shares.
How can I trade fractional shares in my Interactive Advisors account?
Interactive Brokers LLC, Interactive Advisors' affiliated broker-dealer, facilitates trading in the Asset Allocation Portfolios, Smart Beta Portfolios and the other Diversified Portfolios by executing all fractional share orders on behalf of Interactive Advisors clients against one or more liquidity providers. These liquidity providers will sell or buy fractional shares that Interactive Advisors clients would not otherwise be able to trade in the open market.
Is there anything else I should know about the fractional share trades in my Interactive Advisors account?
Note that there is a potential conflict of interest in connection with fractional share transactions in your Interactive Advisors account as Interactive Brokers LLC will act as broker for both Interactive Advisors clients and the liquidity provider counterparty to these transactions. You have consented to these transactions in the Investment Management Agreement. You may revoke your consent to such transactions at any time by written notice to Interactive Advisors or Interactive Brokers, but you will no longer be able to invest in the Asset Allocation Portfolios, Smart Beta Portfolios and the other Diversified Portfolios as they rely on fractional shares.
How do corporate actions work for fractional shares?
You will receive payments or value commensurate to your fractional ownership in the case of stock dividends, stock splits, mergers or other mandatory corporate actions (including cash dividends). You will not, however, have any voting rights or a mechanism to make voluntary elections on your fractional share holdings, and will not receive any shareholder documentation for holdings of less than one share.
How do I liquidate my holdings when I own fractional shares?
You can redeem from a Portfolio and close out your positions at any time. If you do this, Interactive Brokers LLC will sell your whole shares to the market and your fractional shares to the liquidity provider. You will incur commissions in connection with these trades.
What will happen to the fractional shares if I want to transfer my investment to another broker?
You will not be able to transfer fractional share holdings to another brokerage firm and will need to sell them to the liquidity provider. You will incur commissions on these trades.