Important Updates Regarding the Risk Parity Fund

As of November 4, 2024, the Wealthfront Risk Parity Fund (WFRPX) is in the process of winding down, and shares of WFRPX will soon be unavailable for purchase. Although the fund will not accept new purchases, WFRPX will continue to operate until liquidation is complete, which is expected in January 2025. Learn more here. 

What is changing? 

We periodically review our asset allocations and incorporate the latest market data to help optimize after-tax, after-fee returns in line with a client’s risk tolerance. As a result of our most recent review, we are updating our recommended asset allocations such that they no longer include WFRPX. You can learn more about the updated allocations in our blog.

What happens if I take action to adopt the new asset allocations or remove WFRPX from my portfolio?

If you are in a Classic or Direct Indexing portfolio and adopt the new asset allocations, we will immediately begin to rebalance your portfolio to the new allocation tax-efficiently.

If you are in a customized portfolio and have manually removed WFRPX from your allocation, we will immediately begin to rebalance your portfolio to your updated allocation tax-efficiently.

What happens if I take no action?

If you have a Classic or Direct Indexing portfolio that includes WFRPX and have not adopted the new allocations, we have updated your target allocation to the version of your portfolio that does not include an allocation to WFRPX.  

If you have a customized portfolio that includes WFRPX, and have not already removed it from your portfolio, we have updated your target asset allocation to replace WFRPX with three ETFs chosen to offer investment objectives and a risk profile similar to that of the fund.

The three ETFs that will replace your WFRPX allocation are:

• 60% Vanguard Total Stock Market Index Fund ETF (VTI). If your account has an allocation to US Direct Indexing and has a balance of at least $100,000, then we’ll invest in that instead of VTI.
• 20% Vanguard Total Bond Market Index Fund ETF (BND)
• 20% iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)

Your investing account dashboard will display your updated target asset allocation. No new deposits will be allocated to WFRPX. 

In both cases described above, as of November 5, 2024, any new deposits, dividend reinvestments, and portfolio rebalancing will be invested according to your updated target asset allocation, which does not include WFRPX.

Please note that we will not immediately sell all of the shares of WFRPX you currently hold as a result of this change. We may sell shares as part of our regular rebalancing of your account or to satisfy withdrawals.

What happens at liquidation?

Any shares of WFRPX that you hold at liquidation will be cashed out, and the cash you receive will be reinvested according to your updated target asset allocation.