Motif Investing was launched in 2012 as an online brokerage firm that lets individuals invest in ideas. Motif’s co-founder, Hardeep Walia, is the former general manager of Microsoft’s enterprise services business. According to the company’s website, its investors include Goldman Sachs and JP Morgan. In addition, former SEC chairman Arthur Levitt Jr. is on the company’s board of directors.

The company hosts over 140 “motifs,” which are similar to mutual funds or ETFs (exchange-traded funds). Motifs are portfolios of up to 30 stocks or ETFs. Investors can buy these predefined motifs with a minimum investment of $250 and a $9.95 total commission. You can create individual or joint accounts, as well as traditional, Roth or rollover IRA accounts. Unlike with a mutual fund, however, you have a greater level of control over the motif. Before you buy a motif you can customize it, if you wish, by adding or deleting the securities in the motif as well as adjusting the default weightings set by the creator of the motif. You can even backtest the performance of your customized motif before you buy it. After you buy a motif, you also have the option of selling individual securities for $4.95 a trade. Motifs are rebalanced quarterly and, if you want them, these updates cost $9.95 per motif.

Another interesting aspect of Motif Investing is that you can create your own motif with up to 30 stocks or ETFs (Motif Investing claims they support any stock or ETF traded on U.S. exchanges). Beyond the 140-plus motifs “sponsored” by Motif Investing, there are also over 3,500 community-created motifs from which to choose. If you create your own motif, you have the option of sharing it with other community members. Each time someone buys or rebalances a motif you created, you receive a $1 royalty.

Arguably the biggest drawback of Motif Investing is its limited track record. Most of its performance data only traces back to 2012, so there is not a lot of history to support the performance.

iOS App

To track and trade motifs while on the go, Motif Investing also has a free app for the iPhone.

The app is well-organized and allows you to view all of the company-sponsored apps, although you cannot access the motifs created by members of the Motif investment community. You can filter these motifs in a number of ways, including by idea type (cultural, megatrends, model-based, etc.) or by industry (there are currently eight industry types). You can also filter motifs by asset allocation, dividends, fixed income and target date. If you are a registered user (you do not have to be a Motif Investing customer), you can add motifs to a watchlist.

Motif Investing iOS app

 

When you select an individual motif, the app takes you to an overview page that provides a variety of summary information. First is the motif’s “Motif Index”: The Motif Index level represents the performance of a benchmark motif (a company-sponsored motif) over time. It is set at 1000 on the date of inception of the motif. A Motif Index of 1100 represents a 10% return since inception. Similarly, the change in the index over a specified period represents the period return on the portfolio holding the same share weights as the benchmark motif. You also get the one-year performance of the motif and the volatility and valuation ranking. The overview page provides a breakdown of the holdings within the motif, including the individual holding names, their weighting and segment (market-cap size, bond duration, industry, etc.).

There are additional app screen views for a given motif: description, performance and related. The description page, as you would expect, offers an overview of the theme behind the chosen motif. The performance screen shows a performance chart of the motif and the S&P 500 index for a variety of time periods (one week; one, three and six months; year-to-date; one year; since inception). Lastly, the related page shows other motifs that have similar investment themes.

When viewing a given motif, you also have the ability to buy it from within the app (which requires an existing account with Motif Investing).

If you have a Motif Investing account, you can track your current holdings, add motifs to your portfolios, trade existing positions and rebalance your motifs. You can also view your recent orders.

Overall

Motif Investing is an intriguing concept in a burgeoning marketplace. “Basket investing” sites have come and gone over the years, so only time will tell if Motif Investing will be able to establish itself. However, with a powerhouse lineup of investors and some high-profile name recognition, it is off to a good start.

As far as the app goes, it has come a long way. When it first launched, it did not offer trading capabilities. However, that has changed. You can now add motifs to your portfolio, trade your existing positions and rebalance your motifs, which makes the app much more robust. Like the Motif Investing website itself, the app lacks any type of research capabilities. But if you are a customer of Motif Investing and want to be able to connect to your motifs and have the flexibility of trading or rebalancing via your smartphone, the Motif Investing app is extremely useful. Even for those who are not customers of Motif Investing, the app is a useful platform for exploring the motifs that are available, including descriptions, performance charts, and volatility and valuation metrics.

Motif Investing App for iOS

Free