More About Our New Model Portfolios
What happened to my previous portfolio?
As previously communicated, in October 2017, Honest Dollar transitioned from your existing portfolio to model portfolios developed by Goldman Sachs Asset Management, L.P. (GSAM). The new portfolios will continue to invest in exchange traded funds (ETFs) across multiple unaffiliated providers and asset classes while maintaining a similar risk profile to your existing selected portfolio. Honest Dollar did not impose any transaction costs associated with these changes.
Why did you change model portfolio providers?
The investment portfolios managed by GSAM will include a larger selection of unaffiliated exchange traded funds (ETFs) that will provide additional diversification across asset classes and regions which we believe can help our clients better achieve their objective of building wealth for retirement.
What will be in the GSAM model portfolio?
The investment portfolio managed by GSAM will maintain a similar weighting of stock and bond exposure as your current portfolio, but will consist of a larger selection of unaffiliated exchange traded funds (ETFs) that will provide additional diversification across asset classes and regions. We believe that this can help our clients achieve their objective of building wealth for retirement. The composition of the GSAM portfolios can be found here.
What should you do?
You do not need to take any action with respect to this transition to model portfolios developed and managed by GSAM. We will contact you again when the transition to the GSAM model portfolios occurs.
If you wish to change your current portfolio selection, please update your profile by completing our updated suitability questions here.
If you do not wish to remain at Honest Dollar in light of this change, please contact us at firstname.lastname@example.org.
How will the transition work?
In October, we intend to sell the ETFs currently held in your portfolio and purchase new ETFs in accordance with the model portfolios developed by GSAM. You will see these transactions reflected on your October statement. You will not incur any transaction costs associated with these changes.
Will I incur any fees as a result of the transition to the GSAM model portfolios?
Honest Dollar will not impose any transaction costs on your account in connection with these changes. The ETFs that make up the portfolios have their own expenses to cover, and the fund fees vary and are subject to periodic changes. You can find the current expense ratios for each of the funds in their prospectus. The Portfolios currently used in the Program have asset-weighted expense ratios ranging from 0.09% to 0.13%, as compared to asset-weighted expense ratios for the previously offered portfolios of 0.07%. This increase is due to the addition of ETFs that in certain cases have substantially higher expense ratios than the expense ratios of the ETFs that were used in the previously offered portfolios. Such higher-expense ETFs have been included in the portfolios along with other ETFs for the purpose of increased diversification. As a result, the investment performance of accounts holding such higher-expense ETFs will be reduced by the amount of any such additional incremental fees.
The current expenses for the ETFs in your GSAM portfolio can be found in each fund’s prospectus, available here.