We’ve Made Some Adjustments to Your Portfolio—Here’s What You Need to Know

SoFi’s investment portfolios are built for the long-term. Founded on well-worn investment philosophies—diversified investments to help reduce risk, low-fee, tax-efficient funds to reduce unnecessary costs and more—we strive to ensure that our members are in the portfolio that closely aligns with their goals.

While we don’t try to time the market, we do believe that it’s important to monitor global events and understand how those events can affect your portfolio. Most of the time, these events are simply unavoidable speed-bumps on the investing highway and don’t require any adjustments to the portfolios.

However, a couple of times per year, certain events have the potential to shift our expectations of how investments will perform in the future and warrant minor changes to our portfolio allocations.

At the beginning of the year, we increased our international markets exposure. The US markets had massively outperformed international markets over the past ten years and traditional valuation metrics showed that international portfolios offered a more compelling opportunity for future growth.

While valuations still favor international markets, we have lessened our enthusiasm due to a number factors – trade war rhetoric reducing international growth prospects, a more uncertain political outlook in Europe, and rising US bond yields surfacing issues in certain emerging market economies.

Given the increased risk to international markets, we are reducing exposure and adjusting our allocation to more closely align with the regional weights represented in our benchmark.

Similarly, developments in the bond markets have also slightly shifted our views. Given the strength of the US economy, the Federal Reserve has been increasing interest rates throughout the year. Our exposure to short-term bonds and high-yield bonds has mitigated the effect of these rate increases.

As we look towards 2019 and continued expected rate increases, however, we feel that it’s prudent to further reduce risk in our bond portfolios. Therefore, we’re reducing our emerging markets debt and high-yield bond exposure while increasing the amount of high-quality, short-term bonds.

These adjustments are relatively minor and part of the normal process of managing investment portfolios, but we believe it’s important to keep our members informed of our latest thinking.

These adjustments won’t require any action on your part, but if you’d like to discuss the changes in more detail or check in on your progress toward your goals, please contact one of our advisors.

The opinions and analysis expressed here are as of 12/18/18. These views may change as market, economic, and other conditions change. This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Diversification can help reduce some investment risk. It cannot guarantee results or fully protect against loss in a down market.
SoFi doesn’t provide tax or legal advice. Consult with a qualified tax advisor or attorney.
Advisory services offered through SoFi Wealth LLC, a registered investment advisor.

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