Analysis of Robo Advisor Acorn's Aggressive Portfolio

Acorns is a robo advisor that invests one's money for them into a collection of ETFs (exchange traded funds). The goal is for long-term investing. The company will recommend a portfolio but one can easily pick the kind of portfolio that they want. The portfolios are in a few different categories which are Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and Aggressive. In this article, I want to look at the aggressive portfolio as I believe that it is the one that most people should do.

The aggressive portfolio is the only one that is 100% stocks. There is an option to add a Bitcoin ETF into the portfolio, but it is worth mentioning that the ETF is a Bitcoin futures ETF which bets on the future price of Bitcoin. This means that the ETF will not move exactly with the price of Bitcoin itself. Even if one does believe in Bitcoin, it is worth knowing the difference before adding that ETF. In this article, I'll be looking at the portfolio without the Bitcoin futures ETF in it. 

55% of the portfolio consists of the S&P 500 ETF VOO. Most investors, historically, have lost to the S&P. In my opinion, it is the best way to passively invest. While there are many ETFs out there that track the S&P, VOO is best for long-term investing. 

30% of the portfolio is in the ETF IXUS which consists of international stocks. The ETF's past performance is not as good as VOOs over the last 3, 5, and 10 years, but I believe that diversifying into international stocks is a good thing. 

10% of the portfolio is in the ETF IJH. This ETF invests into mid-cap stocks. This ETF has a low expense ratio which makes it great for long-term investing. The fund also has an average p/e (price/earnings) ratio of around 15. 

Lastly, 5% of the portfolio is in the ETF IJR. This ETF invests in small-cap stocks. Small-cap stocks have historically seen great growth, and it is a segment that I believe deserves a spot in almost everyone's portfolio. This is a good small-cap stock ETF for long-term investing.

If I was managing the portfolio, I might change the percentages in some of these ETFs, but I believe that each of these ETFs are good ones to own. This portfolio is fairly diversified, so I wouldn't consider it that risky over a long period of time. 

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