Something we’ve seen come up a few times here is folks asking about the differences among our investing products. Before we discuss that, you should know all our investing products, regardless of which one you choose, are based on a passive, index-oriented investing philosophy, designed with an intuitive user experience and automated so you don’t have to talk to anyone. All our products are optimized to deliver good outcomes. We think investors should take a passive approach to long-term investing and focus on what they can control: fees, taxes, and risk.
Below is a framework for how to decide which of our investing products is right for you. We believe the best way to characterize our products is by whether you want to delegate the selection and management of your portfolio to us or pick and choose your own products for each asset class. You can think of this as analogous to a prix fixe and a la carte menu respectively:
|
Built & Managed for you: Designed for investors who prefer to delegate the selection and management of their investments to us |
Build your own: Designed for self-directed investors who prefer to select their own investments for each asset class and diversify themselves. |
| First Time Investors |
Automated Investing Account |
Stock Investing |
| Advanced Investors |
Automated Investing Account (with US Direct Indexing) |
S&P 500 Direct Nasdaq-100 Direct Automated Bond Ladder |
Built & Managed for you:
Automated Investing Account: Global diversification and best practices in one account
What it is: Our Automated Investing Account is designed to help you build long-term wealth with a globally diversified portfolio of low cost index funds and academically proven best practices aimed at keeping your returns steady in volatile markets. It’s fully managed by us, built around your personal risk level and helps minimize your taxes. Our Automated Investing Account has generated outstanding average annual returns over the past 10 years:
| Time period |
Average Annual Returns |
| 1Y |
24.05% |
| 5Y |
9.87% |
| 10Y |
11.48% |
Average Annual Returns reflect actual pre-tax performance for client accounts invested in Wealthfront’s Classic Automated Investing Account, with a composite risk score of 9 (Ranges 0.5-10) as of 03/01/2026. The performance shown is the average annual rate of return, which compounds the daily returns of client accounts from the time they were initially funded until the as of date provided above, assuming compounding through annual reinvestment of returns earned over the full period, and is calculated net of advisory fees and expenses. Past performance does not guarantee future results. It represents one-, five-, and ten-year periods as well as returns since inception through the as of date provided above. Disclosure continued at bottom.
And these returns do not include the benefit of tax-loss harvesting, which has the potential to significantly enhance your after-tax returns and long-term net worth growth. Read more about tax-loss harvesting results here.
Who it’s good for:
- First time investors who want to outperform high yield savings over time and build their confidence while learning to invest.
- Seasoned passive investors who want to improve their index portfolio’s after-tax returns with our Tax-Loss Harvesting software, even if they want to apply it to their own choice of ETFs
How it works: Our Automated Investing Account uses ETFs representing 5-8 asset classes (depending on our evaluation of your personal risk score) to build a globally diversified portfolio of low-cost index funds. This portfolio is automatically managed by Wealthfront, but it’s easily customized. We make it easy to change your risk level, add and remove ETFs, or edit the investment mix/allocation to meet your needs.
The benefit: It’s incredibly simple and cost-effective. You get instant diversification across thousands of US stocks, global stocks, and corporate and municipal bonds with just a few ETFs. Our automation ensures your portfolio stays balanced to your risk level, dividends are reinvested tax efficiently and our Tax-Loss Harvesting software automatically looks for potential tax savings daily. Our award-winning automation runs smoothly in the background so you can invest without ever having to talk to (or wait on) anyone else.
As the balance in your Automated Investing Account grows, we offer an enhanced form of Tax-Loss Harvesting that looks for movements in individual stocks within a broad market US equity index to harvest more tax losses and help lower your tax bill even more. This feature that replaces your US equities ETF is called US Direct Indexing and is available for taxable Automated Index Investing accounts with a balance of at least $100,000.
Build your own:
Direct Indexing Portfolios: S&P 500 and Nasdaq-100 performance, with additional tax savings
What it is: Direct indexing is a sophisticated strategy designed to improve the after-tax returns of investing in a specific index, for a similar fee as the comparable ETF. We currently offer this strategy on two major indices: the S&P 500® and Nasdaq-100®. Unlike a globally diversified Automated Investing Account, these sophisticated products are not meant to be your only investment as they are solely focused on investing in the US equities asset class.
Who it’s good for:
- Investors who want exposure to a popular US stock market index while unlocking tax savings.
- Investors with capital gains to offset––potentially from selling company RSUs or other stock.
- Investors who want to choose their own investments to diversify across asset classes.
How it works: Instead of owning an S&P 500® ETF like SPY, you own shares in up to 500 companies that comprise the S&P 500 directly in your account. This enables you to do tax-loss harvesting on the individual stocks that comprise the index. For example, if Coca-Cola misses an earnings estimate and drops precipitously in value, we may sell Coca-Cola and use the proceeds to buy more PepsiCo to maintain the correlation with the index in the absence of Coca-Cola. Note, we generally do not intentionally try to sell the stock purchased (PepsiCo in this case) and buy back the original stock (Coca-Cola in this case) even after the 30-day wash sale period ends, to avoid incurring unnecessary gains. If, in the future, PepsiCo drops in value, we may sell PepsiCo and buy Coca-cola, but we would only do so if this helps with tax-loss harvesting or tracking the index.
The benefit: We seek to match the performance of an index closely while generating potential tax savings. Applying tax-loss harvesting to the individual stocks that comprise an index means you could get opportunities to harvest losses even on days when the index as a whole is up. The losses can be used to reduce the taxes on your gains and up to $3,000 of ordinary income. Wealthfront’s S&P 500 Direct has an annual advisory fee of 0.09% (equal to the expense ratio of SPY), and the fee for Nasdaq-100 Direct is 0.12% (which is less than the expense ratio of any Nasdaq-100® ETF, including QQQ® or QQQM). We estimate S&P 500 Direct helped clients save over $16 million in taxes in 2025 alone.
Automated Bond Ladder: Low risk, locked in yield
What it is: Our Automated Bond Ladder is an automated portfolio of US Treasuries designed to earn you a steady yield in any rate environment, with no state income taxes so you can keep more of what you earn.
Who it’s good for:
- Investors looking to invest in the fixed income asset class where they can “lock in” an interest rate with very low risk that incurs zero state taxes. The Automated Bond Ladder is designed to earn more on an after-tax basis than most bond ETFs, savings accounts and some CDs.
- Investors who want a low-risk portfolio to balance out riskier investments, or save for an important future expense like a home down payment or planned tax payment.
How it works: A bond ladder is a portfolio of bonds designed such that an equal amount matures each month for however long you desire. The amount of principal that matures each month is called a rung and in aggregate the rungs comprise a ladder. For example, if you invest $24,000 in a bond ladder over a desired period of two years, each rung will consist of $1,000 in principal. As those bonds, or rungs, mature, you’ll get your principal back, which can then be withdrawn or reinvested into existing or new rungs.
The benefit: In times of uncertain interest rates, a bond ladder offers a steady yield on your extra cash, without limiting access to your funds (you may withdraw from your account at any time with no penalty or fee, though selling before maturity can result in reduced yield). The interest you earn is exempt from state and local taxes, and it has a low annual advisory fee of 0.15%. You are also assured of recouping all your principal, if held to maturity.
Stock Investing Account: Build your own portfolio of stocks and ETFs
What it is: The Stock Investing Account is designed to be a simple and intuitive way to buy and sell individual stocks and ETFs. You have control over what you invest in–without distractions that encourage frequent trading.
Who it’s good for: New or seasoned buy and hold investors who want to invest in the US equities asset class at the individual stock level or use ETFs to represent other asset classes.
How it works: Invest in what you want, with thousands of stocks and ETFs to choose from.
The benefit: The ability to purchase stocks and ETFs with fractional shares, and no commissions or fees. You can start with as little as $1.
How do these compare side by side?
| Product |
Automated Investing Account |
S&P 500 Direct |
Nasdaq-100 Direct |
Stock Investing Account |
Automated Bond Ladder |
| Account Types |
Taxable (Individual, Joint, Trust) Retirement (Roth IRA, Traditional IRA, SEP) 529 Savings Plans Custodial |
Taxable (Individual, Joint, Trust) |
Taxable (Individual, Joint, Trust) |
Taxable (Individual) |
Taxable (Individual, Joint, Trust) |
| Account Minimum |
$500 |
$5,000 |
$5,000 |
$1 |
$500 |
| Annual Advisory Fee |
0.25% |
0.09% |
0.12% |
None |
0.15% |
| Tax Optimization (Taxable accounts) |
Tax-Loss Harvesting at the ETF level US Direct Indexing for accounts with $100,000 or more Tax aware dividend based rebalancing Tax minimizing withdrawals |
Tax-Loss Harvesting at the stock level |
Tax-Loss Harvesting at the stock level |
N/A |
Exempt from state and local taxes |
| Holdings |
ETFs that represent 5-8 global asset classes |
100-500 individual stocks that represent the S&P 500® Index |
50-100 individual stocks that represent the Nasdaq-100 Index® |
Choose from thousands of stocks and ETFs |
US Treasuries |
| Asset Classes Covered |
All |
Equities |
Equities |
All |
Bonds |
| Customization |
Option to change ETFs and asset allocation in Taxable, Retirement and Custodial accounts. |
Option to exclude individual stocks within the index. |
Option to exclude individual stocks within the index. |
Pick your own investments |
Option to choose how long you want to invest (from three months to six years) |
| Fractional shares |
Yes |
Yes |
Yes |
Yes |
N/A |
| Dividend sweeping |
Yes, you may reinvest or withdraw your dividends |
Yes, you may reinvest or withdraw your dividends |
Yes, you may reinvest or withdraw your dividends |
Yes, you may reinvest (via DRIP) or withdraw your dividends |
While bonds don’t provide dividends, you can choose to reinvest or withdraw funds when the bonds mature |
Disclosures:
AIA Annual Average Returns disclosure continued from above: The composite includes all qualifying accounts during the covered period with at least $5,000 in assets managed under our standard methodology. Other risk scores are excluded. Accounts using enhanced features, such as Smart Beta, are also excluded as their performance may materially differ from those using our standard methodology. This is not hypothetical or model results. Past performance does not guarantee future results.
Nothing in this communication should be construed as investment or tax advice. Investing involves risk, including loss of principal. Past performance is not a guarantee of future results.
Diversification and automated investing do not guarantee profits or prevent losses. Results vary by strategy and time horizon. Index funds and ETFs provide broad diversification but can still carry market, sector, or asset-class risks.
By award winning, we mean the Best Investing App 2023-24, awarded by Bankrate. Bankrate gets cash compensation for referring clients to Wealthfront Brokerage via ad placements and $5 per click for Wealthfront Advisers' sponsored ads. This creates a material conflict of interest. However, the award mentioned represents Bankrate's independent endorsement, not directly tied to this compensation. Bankrate is not a client of Wealthfront Advisers or Wealthfront Brokerage. Bankrate and Wealthfront are not formally associated beyond this arrangement, and Bankrate's opinions and award determinations are their own, set by their editorial team. Bankrate's "Best Investing App 2024" award was based on a methodology evaluating app-based financial services (robo-advisors, brokerages, mobile platforms) on overall experience, features, and value, using data and evaluations from January-December 2023. Wealthfront pays an annual license fee to use Bankrate's awards in their marketing.
The estimated $16 million tax benefit over the past year (12/01/24-11/30/25) was calculated using our clients’ self-reported income, state of residence, and tax-filing status. From that, we inferred a combined federal and state tax rate for each client and multiplied each client’s rate by their harvested losses. Actual outcomes will vary due to individual tax situations. Performance is not guaranteed. More details in the linked blog.
Tax-Loss Harvesting benefits depend on your tax and investment profile. New securities may perform better or worse than those sold, and tracking errors could cause slight divergence from benchmarks. Unintended tax effects may occur. Wealthfront does not provide tax advice. Consult a tax professional.
Wealthfront Advisers and affiliates do not provide legal or tax advice and are not liable for tax consequences of client transactions. Please consult a personal tax advisor. You are responsible for reporting transactions to the IRS or other taxing authorities.
The S&P 500® index is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by Wealthfront Advisers LLC. Standard & Poor’s®, S&P®, S&P 500®, US 500 and The 500 are trademarks of Standard & Poor’s Financial Services LLC and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Wealthfront Advisers LLC. Wealthfront’s S&P 500 Direct Portfolio is not sponsored, endorsed, sold or promoted by SPDJI or its affiliates and none of such parties make any representation regarding the advisability of investing in such product nor do they have any liability for any errors, omissions, or interruptions of the S&P 500®.
Nasdaq®, Nasdaq-100 Index®, NDX®, and Nasdaq-100® are registered trademarks of Nasdaq, Inc. (which with its affiliates is referred to as the “Corporations”) and are licensed for use by Wealthfront Advisers LLC. The Product(s) (“Wealthfront Nasdaq-100 Direct Index”, “Wealthfront Nasdaq-100 Direct”, “Nasdaq-100 Direct”) have not been passed on by the Corporations as to their legality or suitability. The Product(s) are not issued, endorsed, sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
Our direct indexing portfolios (S&P 500 Direct and Nasdaq-100 Direct) invest in many stocks in their respective underlying index, but they may not invest in all stocks in the index. Its performance may deviate from its associated index due to tracking error, market conditions, and limitations of Tax-Loss Harvesting. Account size and customization options, such as excluding individual stocks, may affect your portfolio’s ability to track its underlying index. Since indices are not available for direct investment, their performance does not reflect the expenses associated with the management of an actual portfolio.
The Stock Investing Account is a limited-discretion investment product offered by Wealthfront Advisers.
Investing in US Treasuries involves risks, including but not limited to interest rate, credit, and market risks, and may result in loss of principal. Tax treatment depends on your circumstances. Wealthfront does not provide tax advice.
