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How to Invest in ETFs with Stash

July 05, 2018
etf investing, exchange traded funds

3 min read

At Stash, we want everyone to get the education they need so they can be smart investors. That’s why, in addition to single stocks, we also offer something called exchange traded funds (ETFs).

ETFs are baskets of securities that trade on an exchange, and either follow an index or some other specific set of investing guidelines.

Our philosophy is that by holding a wide array of funds (we offer more than 50 low-cost ETFs), it can help you achieve one of the most important goals of investing, which is diversification.

What can I invest in on Stash?

Stash’s ETFs represent important economic sectors, which can potentially give you broad exposure to markets. These include equity funds that focus on the entire stock market,  consumer staples, energy, financial services, healthcare, and technology, to name a few.

The funds also allow you to invest in both corporate and government bonds.

Investing in ETFs by theme

We want the mission of each fund to be clear, so our investors know what they’re buying.

That goes equally for a fund that may follow an index of companies that have social goals to promote worker equality, or one that might follow the stock picking strategy of large hedge funds.

All of our funds must also follow easily recognizable themes. For example, our funds might follow companies innovating in sustainable energy, or pushing the envelope on robotics, or companies actively seeking to conserve and supply water globally.

Why do I need diversification?

Diversification essentially means not putting all of your eggs in one basket. By putting your money in a variety of funds, you are choosing different investments that are not subject to the same risks and therefore are less likely to share the same fate.

By diversifying, you’re choosing funds that hold the stocks of companies in a variety of industries and sectors, and potentially in a range of countries, too.

Why is diversification important?

The economy is pretty complex, and downturns can affect some industries and not others. Or they can happen in one country, or set of countries, while others are not affected.

By diversifying, the hope is that you’ll capture the upside of economic growth and less of the downside when that happens.

How we choose our funds

Stash also chooses ETFs from the leading fund providers. Blackrock’s iShares, Charles Schwab, PIMCO, State Street Global Advisors, and Vanguard, are a few of our fund companies, and they are among the most recognized names in the investment world. These companies have long track records creating some of the most successful funds in the industry. With that in mind, it’s important to consider that investing in funds carries risks.

Our objective is to offer ETFs that are straightforward and that follow a transparent process for security selection, based on concrete rules.

How Stash helps you maximize returns

At Stash it’s important for us to try to minimize the costs associated with owning and trading an ETF, to help you maximize your returns.

You can buy fractional amounts of our funds, starting at just $5, making it simple to invest in a lot of things that interest you without spending a lot of money.

Why are fractional shares helpful for beginner investors?

Often the share price of a stock or fund can be high—hundreds or even thousands of dollars. Fractional shares let you buy a portion of these shares, based on a budget you can afford.

Your investment still works the same way as if you were buying full share amounts.

Consult your Coach

All investments come with risk.  Upon adding funds to your portfolio, Stash recommends clicking on Stash Coach* in your app.

This personalized financial coach will help guide you toward investment choices that will round out your portfolio with bonds, international investments, and other securities tailored to your risk level.

There have never been more ways to invest in yourself.

All investing carries risk, and it’s important to know that you can also lose money in your investments.

Explore all the funds we offer on Stash here.

Investing, simplified

Start today with as little as $5

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*Stash Coach should not be considered a comprehensive financial planning service for individual investors. Stash Coach is only one of many tools that an individual investor may use as part of a holistic investment analysis process. Stash Coach assumes that an investor’s risk profile will not change during the time period of use; however, actual investors may experience changes to their portfolio of investments in response to amending risk profiles, investment goals, and market conditions. Stash assumes markets are sufficiently liquid to permit the purchase of all investments recommended by Stash Coach. Stash Coach recommendations might change over time as a result of changes in the assumptions for returns on your accounts that might reflect changes in the model assumptions, as well as changes in the data Stash, obtains about investments. Your Stash Coach recommendations depend on the accuracy of the data you report including your answers to our suitability questions. Stash assumes the data you report is accurate and that it is up-to-date. The information made available through Stash Coach is not intended as tax advice, and Stash does not represent in any manner that any outcomes described will result in any particular tax consequence. Stash assumes no responsibility for the tax consequences to any investor of any transaction. There are a predetermined number of points, which are subject to change, made available through Stash Coach. However, the information provided by Stash Coach does not imply any level of skill or training on the part of the client.

Certain aspects of Stash Coach constitute the delivery of investment advice on securities under the Investment Advisers Act of 1940, as amended; however, not all information made available through Stash Coach constitutes such investment advice. Furthermore, Stash may receive compensation from business partners in connection with certain promotions in which Stash refers clients to such partners for the purchase of non-investment consumer products or services. This type of marketing partnership gives Stash an incentive to refer clients to business partners instead of to businesses that are not partners of Stash. This conflict of interest affects the ability of Stash to provide clients with unbiased, objective promotions concerning the products and services of its business partners. This could mean that the products and/or services of other businesses, that do not compensate Stash, may be more appropriate for a client than the products and/or services of Stash’s business partners. Clients are, however, not required to purchase the products and services Stash promotes.  

**Investing involves risk. Holdings and performance are hypothetical.

By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

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This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.