Investing for specific life achievements
A Brief Overview of LifeGoal Investments:
LifeGoal’s core focus is to provide everyday investors access to investment portfolios specifically tailored to help them achieve life’s major milestones. While goal-specific portfolios aren’t uncommon among higher net worth individuals, access to these portfolios isn’t always available to all investors. Investors who are looking to add a few hundred dollars a month towards their home down payment or next vacation may find LifeGoal’s funds valuable.
More on LifeGoal:
How LifeGoal Got Started
LifeGoal investments was founded by brothers Brett and Taylor Sohns out of a simple frustration many Americans can relate with, home prices are rising faster than the down payment in their savings account.
When COVID-19 started to become a clear problem in the US, LifeGoal’s co-founder Brett Sohns was in the process of planning to build a house. Like many Americans pumping the breaks on construction was the logical move as typically housing gets cheaper in an economic downcycle.
However, fast-forward a few months into the pandemic and housing prices were doing anything but going down. Driven by a combination of the work from home movement, low mortgage rates, commodity prices soaring (lumber prices increased 275% during the pandemic), and increased inflation, median home prices rose over 20%+ through the pandemic.
With housing prices increasing so quickly, Brett found himself looking for an alternative to a savings account, which pays virtually no interest, to help offset the increase in housing prices. Having 15+ years of experience working in the investment industry for prestigious firms like BlackRock this should’ve been no challenge. Yet, he couldn’t find any simple investment product.
So, leaning on his professional investment experience, Brett set out to build his own portfolio that would be closely tied to the increase in housing prices while not being overly volatile.
Ultimately, Brett and his brother Taylor, who also has 10+ years of experience as an investment professional, thought this whole process seemed overly complex. Thinking, if this was complex to people like them who were professional investors, imagine how complex it must be for someone who isn’t a professional.
Brett and Taylor’s solution, LifeGoal and their flagship fund “HOM”. If ordinary investors have life goals they want to achieve, why shouldn’t they be able to buy into an actively managed portfolio whose whole objective is centered around that life goal?
By putting these professionally managed portfolios into exchange-traded funds (ETFs), ordinary Americans can easily contribute as much or as little they want each month.
About the Funds LifeGoal Offers
Altogether LifeGoal currently offers 5 different actively managed ETFs all designed with a different investment objective. Below we’ll look at 3 of their ETF offerings including their flagship Home Down Payment Investment fund.
“HOM” Their Flagship Fund
LifeGoal Home Down Payment Investment ETF or “HOM” is the company’s flagship ETF and how it all got started. This actively managed ETF seeks to invest in companies highly correlated with overall housing prices while dampening volatility via fixed income. Companies within this strategy aim to capture cost fluctuations of home building/rehabbing components such as paint, insulation, glass, flooring, home marketing, and home finishing. Fixed income within this strategy aims to capture both short-term and long-term corporate and government debt ETFs.
Objective: Attempt to keep pace with home inflation.
Rebalancing: Ongoing
Expense Ratio: 0.44%
Number of Holdings: ~40
“SAVN” Conservative Alternative To A Savings Account
General Conservative Investment ETF or “SAVN” is an actively managed strategy that seeks preservation of principal primarily via bond investments with some risk exposure to equities. Companies within this strategy are typically large-cap well-known names. Fixed income within this strategy is comprised of both short-term and long-term corporate and government debt ETFs.
Objective: Preservation and some appreciation, attempting to outperform a savings account.
Rebalancing: Ongoing
Expense Ratio: 0.39%
Number of Holdings: ~40
“WLTH” Wealth Builder
For those seeking a more aggressive long-term option for general capital appreciation, LifeGoal offers its Wealth Builder ETF or “WLTH”. This actively managed strategy seeks long-term capital appreciation primarily through its direct stock and stock ETF investments. While the strategy is primarily targeted at direct stock and stock ETF investments, this ETF carries meaningful exposure to fixed-income investments for retargeting toward stock investments in the event of a market pullback.
Objective: Long-term capital appreciation.
Rebalancing: Ongoing
Expense Ratio: 0.49%
Number of Holdings: ~35
LifeGoal offers two additional funds, their vacation fund “SUNY” and their children investment fund “CHLD”
LifeGoal and ESG Investing
LifeGoal’s stance on Environmental, Social, and Corporate Governance (ESG) investing. LifeGoal considers ESG an important part of the investment process. While ESG might not dictate the investment decisions of the portfolio managers, the way LifeGoal votes in shareholders’ meetings likely will.
Pros & Cons of LifeGoal
Pros:
- Objective focused investment funds
- No minimum investment amount
- Low-cost for objective focused portfolio access
Cons:
- Non-personalized strategy
- New investment funds, no track record
The Bottom Line
If you’re looking for investment products with specific objectives, LifeGoal’s offerings may work well for you. Unlike other investment products that are targeted toward general capital appreciation, many of LifeGoal’s products are targeted towards a specific end use of the capital you invest in them. However, if you’re simply looking for investment products that offer the highest growth potential regardless of volatility, you may want to look elsewhere.