Comparing two equity products: ETFs vs. motif portfolios

Investors have choices when it comes to investing in the stock market, and among the most popular are individual stocks and packaged products.

Investors can buy individual stocks listed on any U.S. stock exchange that meet their investment criteria.

When it comes to packaged products listed on stock exchanges, exchange-traded funds (ETFs) have proven popular with investors. While many ETFs are passive investments that track an index, such as the S&P 500, investors can also opt for actively managed ETFs that seek to outperform the comparable index based on a defined investment strategy.

Motif has created an alternative to picking single stocks and pre-packaged portfolios of securities such as an ETF. Motif portfolios are intelligently weighted baskets of up to 30 stocks built around a theme or an idea. Investors can customize their motif portfolios in ways that meet their unique investing strategies.

While both ETFs and motif portfolios allow investments in a set of securities, there are key differences between them, including:

  ETFs Motif Portfolios
Product A portfolio of securities based on a defined investment objective and trades in real time, like common stocks, on a stock exchange. A thematically weighted basket of up to 30 U.S.-listed stocks that trade like stocks, in real time, on a stock exchange.
What do investors own? Shares in the fund. Direct ownership of underlying securities in the portfolio.
Fees
  • Commission to trade ETFs may be applied
  • Annual management fees or expenses, listed as an “expense ratio” that is included in the ETF price
  • $9.95 commission to trade a motif portfolio in real-time
  • Commission-free to trade at next market open
  • Annual licensing fee based on the amount of invested assets; deducted monthly from Motif account balance
Customizable Portfolio? No Yes
Automated Rebalancing Yes Optional
Transparency and pricing Holdings published daily Stock prices and weightings of motif portfolios accessible in real time
Professional Management Professionally managed Investors manage their own portfolio