Have you ever explored your Ellevest investing goals and noticed a transaction labeled “funds bought for” your goal, or “funds sold for” your goal?
Funds bought for your goal refers to your funds being invested. In the past, we included a line that said, "deposit," but we realized we weren't helping our clients understand that there are two steps involved here:
- First, the deposit is made (the funds exist as cash with our custodian Folio, but are not invested in the market).
- Second, we buy funds (also known as securities) to invest the deposit (when the funds are invested in the market and the goal balance updates).
Funds sold for your goal refers to your funds being uninvested. When a client makes a withdrawal, we first have to sell the funds (liquidated funds, also known as securities, that are invested in the market to turn them into cash), and then we transfer the amount to the selected account.
You may also see either of these when we rebalance your accounts. At Ellevest, clients get an actively managed account, which means we trade on your behalf. Sometimes we notice that your portfolio’s allocations of funds have changed significantly because of market performance so we make trades to get the allocation back to its targets. Sometimes clients may make a change, like their time horizon or risk level, and we do the same thing to bring it in line with the new target.