What Are The Safest ETFs For Your Investments?

When most people think of the safest investments, they may think of money market accounts and certificates of deposit (CDs). However, these and other investments considered to be safe may pay only minimal returns that fail to meet the goals of an individual investor.

The safest investments are usually a combination of investments known as a balanced portfolio, in which an investor can be exposed to a wide variety of investments with a blended return that averages down the risk associated with any one type of investment.

You can find this balance in a variety of relatively safe ETFs that have a combination of fixed income (bond) and equity (stock) investments, such as the ETFs offered in MoneyLion portfolios.

Knowing Your Risk Level

When it comes to investing, understanding your tolerance for risk is key. The safest investments, generally speaking, pay lower returns. Whether you wants to grow a slow, steady return with minimal risk or take on more risk for the possibility of a higher return, understanding where you fall on the spectrum of risk tolerance will help optimize the investment strategy that is right for you.

Risk profiles are typically determined by factors such as age, dependability of income sources, and the need for liquidity. For example, younger investors may tolerate more risk since they have more time to allow investments to grow and compound without the need to withdraw investments (liquidity). Also, if higher-risk investments go sour, younger investors still have time to recover and grow their investments before retirement.

MoneyLion’s Risk-Based Investment Portfolios

With a managed investment account from MoneyLion, you’ll just answer a few questions, and we’ll recommend a suitable risk-based portfolio (on a spectrum from conservative to aggressive). Once you’re investing in your personalized risk-based portfolio, you can adjust your asset allocation to be more or less risky, and you can even select a super conservative SteadyIncome portfolio or an ultra-aggressive Equity Only portfolio if you choose. 

Portfolio TypeInvestment Strategy
SteadyIncomeThis portfolio only uses bond ETFs. These ETFs typically offer lower gains, although still typically higher than a traditional savings account. This portfolio type can be used to more safely hold your savings and earn modestly. 
Conservative PortfolioThis is a relatively stable portfolio, typically offering  lower returns and lower volatility. The majority of this portfolio type will be designated to fixed income (bond) ETFs as well as a small portion going to equity (stock) ETFs.
Moderately Conservative PortfolioSimilar to the conservative portfolio, this account type uses fixed income ETFs to fill your portfolio and allocates a decent amount of your investment balance to equity ETFs to help grow your funds faster. 
Moderate PortfolioBest for long-term growth, this account has about an even mix of fixed income ETFs and equity ETFs. You can typically see a 5% growth year over year with a moderate portfolio, although returns are not guaranteed with any investment
Moderately Aggressive Portfolio For the investor who hopes to see larger gains year over year while taking on a bit more risk, this portfolio has a majority of equity ETFs with a small portion allocated to fixed income ETFs. 
Aggressive PortfolioFor investors who prefer to take on more risk in pursuit of larger gains, the aggressive portfolio can be a good choice, with approximately 80% of the portfolio dedicated to equity ETFs with the remaining providing some stability in income ETFs.
Aggressive Equity Only Like the name states, these accounts are 100% equity ETFs. There is higher risk and may be suitable for longer-term investors who expect and can withstand fluctuations over time. 

What ETFs Should You Invest In?

MoneyLion allows investors to access exchange-traded funds (ETFs), a form of index investment that offers lower-cost diversification for investors than traditional mutual funds. ETFs trade in and out of individual equity and fixed income investments, and their exposure to a wide range of investments helps manage risk and volatility within the fund.

Over the past 25 years, ETFs have become a preferred method for investors seeking to maximize returns and minimize risk. There are thousands of ETFs available, allowing these investments to more precisely match the risk profiles and balanced portfolio needs of individual investors. While ETFs are considered to add some amount of volatility to the overall markets, their trading activity also contributes to higher trading volume and liquidity, which can ultimately benefit ETF investors.

Within a MoneyLion account, investors can balance their exposure to equity or fixed income-weighted ETFs, as well as enjoy the added layer of diversification to investment vehicles within the ETF itself. 

By suggesting a suitable portfolio exposure or asset allocation, while also allowing the customer to change their asset allocation at any time, MoneyLion offers a way to seek steady, maximized portfolio growth of the safest investments based on the risk and return requirements of individual customers. You can be an involved or hands-off investor — the choice is yours!

How To Start Investing

ETF investing is as simple as downloading the MoneyLion app and setting up a secure, personalized investment account. MoneyLion allows customers access to investing options, in addition to other banking products such as direct deposit, Instacash cash advances, and mobile deposit.

Investment accounts come with no management or trading fees and can be set up through the MoneyLion app in about five minutes, including e-signing secure documents. No visit to a bank or stock broker is necessary. Accounts are fully managed with no minimum investment requirement. Customers can choose to allocate their portfolios based on our recommendation or use prompts and sliders to determine the right investment mix.

Additionally, MoneyLion’s Auto Invest feature makes it easy to transfer any amount, as low as $5, from a customer’s checking account to investment account automatically on a recurring basis. Auto Invest effectively puts investment habits on autopilot, helping grow returns in the safest investments for a more secure financial future.

The Safest Investment is Investing Early

Time is a critical factor in investing. Investment returns can benefit significantly from having more time to grow and compound. To help minimize risk, a longer investment horizon can help a portfolio weather downturns in the market or fluctuations in specific ETFs. To help maximize returns, investing over a longer period can allow you to participate in higher risk but higher return investments that may have less liquidity. Investing early and steadily is key to changing your financial future and taking control of your investment outcomes.

Start by either investing a lump sum or simply diverting an amount from each pay period or income deposit through MoneyLion’s Auto Invest. MoneyLion’s interactive tools will quickly pinpoint your risk profile and help you determine which investment mix is comfortable for you.

Investing is a formed habit. Utilize available tools that let you automatically divert even small amounts of income to investments in a way that doesn’t disrupt your daily spending needs. For the greatest benefit, start investing early and take advantage of your ability to control allocations and respond to your personal risk preferences. Staying in close touch with your money and evolving financial goals can have the most positive impact on your financial future.

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