M1 pies: Our 5 top picks for investors
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Updated: July 10, 2024
New investors and seasoned veterans alike could find a good fit for their needs at M1. M1 is a brokerage with no regular investment fees and a delectable twist.
They offer the ability to allocate your portfolio using Pies, a visual tool to divvy up your portfolio by percentages into stocks and ETFs, and even pre-built Model Portfolios designed by M1 Finance pros.
Here’s a closer look at how M1 Model Portfolios work and which are the best Model Portfolios to consider for your portfolio. If you want to learn more about M1 Finance, check out our detailed M1 review here.
What is an M1 Pie?
M1 is an investment app that offers pre-selected portfolios called “Pies.” Each Pie is made up of slices. These slices represent stocks, ETFs, or even other existing portfolios called Model Portfolios.
Each account can hold five Pies, and each Pie can hold up to 100 slices.
Beginner investors may want to sign up and choose an Model Portfolios based on a topic or theme they want to hold in their portfolio. Categories make it easy to find a Pie that’s right for your goals, such as general investing, retirement, income, or responsible investing portfolios.
More advanced investors are likely best off mixing and matching Model Portfolios with their own investment strategy, or a mix of more Model Portfolios. For example, you could build a Pie that’s 25% stocks and 75% Model Portfolios, or any other combination you choose.
M1 Invest Disclosure: All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products.
By default, M1 investment accounts and Pies are completely free to use, with no recurring account fees or trade fees. However, some Model Portfolios may charge a modest annual fee. Be on the lookout for those if you’re aiming for a no-cost investing experience.
Get started with M1 for freeHow do M1 Pies work?
As mentioned earlier, each slice of an M1 Pie represents a stock, ETF, or Model Portfolio. Every slice is given a percentage of the total Pie. Your slices must add up to 100% for each Pie. You can divide that 100% up any way you want with up to the 100 assets per Pie.
M1 Invest Disclosure: All examples above are hypothetical, do not reflect any specific investments, are for informational purposes only, and should not be considered an offer to buy or sell any products.
When you add funds to your account or withdraw, the Pie is rebalanced automatically to stay in line with your target percentages. If you earn dividends or employ a recurring investment plan, M1 strategically purchases investments to keep your portfolio lined up with your plan.
You can make adjustments at any time. Trades are all executed by default at 6:30 a.m. (PT) every morning.
Read more: Should I rebalance my portfolio?
What are Model Portfolios?
Custom Pies work like a regular brokerage account in most ways, but with a unique circle graph interface instead of a traditional table format.
Model portfolios are pre-constructed, diversified collections of investments intended to match a particular investment strategy or goal. They serve as a foundation for investors to tailor and create their own personalized portfolios. These portfolios are not put together by any specific individual expert.
Model Portfolios are designed by investment professionals in line with specific investment themes.
Categories include:
- General investing
- Plan for retirement
- Responsible investing
- Income earners
- Just stocks and bonds
- Other strategies
Model Portfolios are particularly helpful if you’re new to investing. However, advanced investors may also like access to creative strategies, such as mimicking specific hedge fund managers or a portfolio of cannabis-related stocks.
Custom and Model Portfolios help you maintain a diversified portfolio with the option to pick your own single stocks or go with the suggestions of an expert in the same account.
What are the best M1 Pies?
- 1.
General investing by risk tolerance: Okay, we cheated here. This is actually a category made of seven different Pies, ranging from Ultra Conservative to Ultra Aggressive stock holdings. Each holds six to 10 ETFs, which each hold a mix of stocks and bonds aligning with your risk tolerance selection.
- 2.
Target-date retirement pies: The Plan for Retirement section includes more than a dozen Model Portfolios mimicking popular target date fund investments from major portfolio management firms. Here, you can choose a Pie aligned with your target retirement year with aggressive, moderate, or conservative options.
- 3.
Income earners: These six Model Portfolios give investors exposure to dividend stock and bond funds. They’re useful for cash flow in retirement (or early retirement).
- 4.
Socially responsible investing: The Responsible Investing and International Responsible Investing Pies exclusively hold ETFs from the Nuveen ESG fund family. Learn more about ESG investing here.
You can also choose portfolios of ETFs targeting a mix of stocks and bonds by percentage, such as an 80/20 or 40/60 split between stocks and bonds. The “Other Strategies” section offers growth and value Pies, a Cannabis Pie, and a Pie of popular ARK Investment Management ETFs.
How to decide which M1 Pie is right for you
Choosing Model Portfolios or what to put in your Custom Pies is up to you. Consider your financial goals, risk tolerance, and investment knowledge when deciding how to divide up your funds. Lastly, don't forget to factor in any fees that may apply to your chosen Model Portfolio.
Some Pies are poised to follow the markets closely, while others may carry high risk due to concentration in specific industries or high-risk stocks. If you can’t make heads or tails of your investments, a full-service investment advisor or robo-advisor could make more sense for you.
The bottom line
With potentially fee-free investment accounts for new and seasoned investors, the best M1 Pie varies by investor. Because there’s no cost to open an account, why not decide for yourself if M1 is right for your investments?
M1 Invest Disclosure: The opinions expressed are solely those of the authors and do not reflect the views of M1. They are for informational purposes only and are not a recommendation of an investment strategy or to buy or sell any security in any account. They are also not research reports and are not intended to serve as the basis for any investment decision. Prior to making any investment decision, you are encouraged to consult your personal investment, legal, and tax advisors.
M1 Finance, LLC does not charge commission, trading, or management fees for self-directed brokerage accounts. You may still be charged other fees such as M1’s platform fee, regulatory fees, account closure fees, or ADR fees. For a complete list of fees M1 may charge visit https://m1.com/legal/disclosures/miscellaneous-fees/.
A $3 monthly platform fee will apply to clients with less than $10,000 in M1 assets or without an active Personal Loan. The fee will be waived if your opened M1 Invest or Earn accounts settled aggregate balance equals or exceeds $10,000 for at least one day during the 30 days prior to program launch. The monthly platform fee will be waived for all clients with an active M1 Personal Loan, regardless of their M1 Invest or Earn balances.
Eric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time.
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