You Invest Portfolios by J.P. Morgan

Josh Patoka
December 2, 2020

Legendary asset management and investment research firm JP Morgan manages You Invest Portfolios. There are four portfolio options with different risk-based investment strategies. Each portfolio holds 2% cash but has a different stock-to-bond asset mix. Fractional investing and dynamic portfolio rebalancing are standard.

Each portfolio only invests in JP Morgan ETFs, while most robo-advisors invest in index funds from iShares and Vanguard. You will get exposure to many domestic and international asset classes with low fees.

How You Invest Portfolios by J.P. Morgan Manages Your Money

You Invest Portfolios by JP Morgan asks you a series of questions to determine your risk tolerance. Your responses determine which of the four investment strategies shape your portfolio.

You will be able to see the potential stock and bond ETFs for your portfolio before opening a You Invest Portfolios account.

The onboarding process also shows your potential long-term gains based on potential market returns.

Asset Allocation

You Invest Portfolios by JP Morgan offers four different risk-based investment strategies.

Below is the initial asset allocation for each portfolio:

• Aggressive: 90% equities and 10% fixed income and cash
• Growth: 75% equities and 25% fixed income and cash
• Moderate: 50% equities and 50% fixed income and cash
• Conservative: 25% equities and 75% fixed income and cash

All portfolios hold a 2% cash balance. This amount is higher than some robo-advisors. However, some robo-advisors require a 6% cash cushion at all times. A high cash reserve can reduce your potential long-term gains from share price appreciation and dividends.

Each portfolio invests in various percentages of U.S. and international equities. As you near retirement, You Invest automatically rebalances to hold more fixed-income assets.

You can view your portfolios “glide path” to see the planned allocation for these asset classes:

• S. stocks
• International stocks
• Fixed income

JP Morgan ETFs

Most robo-advisors use iShares or Vanguard-managed index funds. You Invest Portfolios only uses stock and fixed income ETFs from the JP Morgan fund family. These funds have similar investing strategies and expense ratios.

JP Morgan currently offers 33 different ETFs in different asset classes:

• S. large-cap and mid-cap stocks
• International developed market stocks
• Emerging market stocks
• Government bonds
• Corporate bonds
• Industry sectors
• Specific countries like Canada or Japan

Some funds have a 4- or 5-star Morningstar rating as they have industry-leading performance.

You Invest lets you block certain ETFs from your portfolio when a suitable alternative is available. You can’t avoid an entire asset class—like emerging markets—for instance. But you may block funds with poor historical performance or high expense ratios.

Automatic Rebalancing

You Invest uses dynamic rebalancing and fractional investing in maintaining your target asset allocation. Your new contributions first buy assets below their target allocation.

Advantages of You Invest Portfolios by J.P. Morgan

Fractional investing: Buying partial shares of ETFs makes it easy to invest small amounts of money and remain diversified.

Risk-based portfolio: You Invest decides your asset allocation based on your risk tolerance and investing goals and not solely by your age.

Glide path: Your portfolio glide path makes it easy to project your future portfolio size based on potential market returns and ongoing contributions. The path also shows your future asset mix.

Retirement accounts: Traditional and Roth IRAs are available to minimize your taxable investment income.

Learning tools: New investors can learn investing basics in the Learning & Insights section. All investors can use this section to monitor recent economic events.

Disadvantages of You Invest Portfolios by J.P. Morgan

Minimum $500 opening account balance: A $500 initial account balance is higher than some robo-advisors who require as little as $10 to start investing. You must maintain a $250 account balance to keep your You Invest Portfolios account open.

0.35% annual management fee: The 0.35% annual management fee is slightly higher than the industry average of 0.25%.

No tax-loss harvesting: Large portfolios may have a smaller tax bill by using a robo-advisor that offers tax-loss harvesting. The lack of this feature doesn’t affect retirement accounts.

No human advisor access: You Invest doesn’t offer access to a human advisor to plan for life events. Other platforms let you purchase one-time sessions, even if you have a small portfolio.

Is You Invest Portfolios by J.P. Morgan Safe?

You Invest Portfolios by JP Morgan invests in ETFs from a longstanding investment firm. JP Morgan is a member of FINRA (Financial Industry Regulatory Authority).

These ETFs are subject to inherent market risk and can lose money. If JP Morgan defaults, the first $500,000 in assets are SIPC-insured. This insurance doesn’t cover ordinary market losses.

Is You Invest Portfolios by J.P. Morgan Right for You?

You Invest Portfolios is a good low-fee option for new investors who can invest $500 upfront. The fractional investing and dynamic rebalancing tools make it easy to invest small amounts of cash and remain diversified.

You may choose a different robo-advisor if you want tax-loss harvesting or future access to a human advisor.