SigFig has announced the launch of SigFig Diversified Income, a robo-managed investment portfolio aimed at retirees.
SigFig says that the portfolio uses eight to 12 income-generating ETFs, which provide diversification, to aim for its target of 4 percent income yield while keeping volatility and risk low. Account owners can choose whether to have that income automatically reinvested or distributed.
"Retirees are perhaps the most in need of an investment portfolio that delivers income, money they use to live on a day-to-day basis. However, many pursue ineffective or risky strategies to meet their daily financial needs," SigFig CEO Mike Sha said in a statement.
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The minimum investment requirement for the SigFig Diversified Income portfolio is $100,000. Management fees are 0.50 percent.
The technology does the actual portfolio management, and does not rely solely on historically popular ways of generating income, such as bonds and dividend-paying stocks, SigFig said.
With low interest rates resulting in correspondingly low yields, and stock market volatility making dividend-paying stocks more of a risk than they used to be, SigFig Diversified Income offers what it bills as better diversification and yield to retirees looking for income by pursuing exposure to both commonly used and lesser-known sources of income.
In addition, although the portfolio is automated, customers are able to speak with professional wealth managers.
Founded in 2011, SigFig says it's the largest portfolio optimization platform in the world, helping investors track over $350 billion in assets.
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