Motif Investing Review: The ETF And Index Fund Killer With $150 Sign Up Bonus

Various Motifs

Motif Investing was finally sold to Charles Schwab in 2020 and is no longer available. Sorry! Check out Personal Capital instead. They have the best free tools on the internet today. If you're curious what they did, check out the Motif Investing Review below

After spending 13 years in equities on Wall Street, I've been able to personally speak to some of the most successful institutional investors around on how to invest and manage money.

The one consistent piece of advice I always hear is to invest in long-term trends and forget about the day-to-day minutiae. For example, shorting/underweighting Japanese equities since the late 1980s and going overweight commodities in the 1990s have been great winning decisions.

Forget Day Trading, Focus On Long-Term

As a result of my experience working with successful fund managers, I weaned myself off of trying to constantly trade around the market after the NASDAQ burst in 2000. I've given up the risks of day trading because it's too time consuming and not worth it. Instead I've been focused on long-term, idea-driven investing ever since.

I'll always have a Unicorn Fund to punt around for the next multi-bagger stock. But, the fund is always less than 5% of my net worth or 10% of my entire equity exposure.

Motif Investing is a fascinating company based right here in the San Francisco Bay Area. I've been following them for the past couple of years. They raised a $25 million round of funding led by Goldman Sachs in 2013. Then they won the Finovate Fall 2013 and Finovate Spring 2014 “Best In Show.”

And raised another $35 million round in 2014 led by JP Morgan. Motif Investing makes most of its money off transactions (trades) when you buy or sell one of their “motifs” based on an investment idea you have. They might also expand into the money management business as well.

A motif is essentially a basket of 30 stocks you can invest in, which are aimed to profit from a specific idea or underlying theme. Let's say you think new housing construction is going to quicken in the US next year. You could buy a housing motif which might contains Lennar, KBH, Home Depot, Bed, Bath, and Beyond, Zillow, and more in various weightings. Given my focus on buying winning long-term ideas and ignoring the short-term volatility, I really like Motif's value proposition for retail investors.

Motif Investing Review

Lower Cost

Now let's get into the Motif Investing Review. Let's say you've got $50,000 to invest. You could buy a bunch of low cost ETFs for $7.95/trade via E*TRADE to create your ideal portfolio. Or you could buy an expensive target date retirement fund that might cost over 1% in fees if you're not buying from a low-cost shop like Vanguard. Or you could buy individual stocks at $7.95/trade to create your own portfolio.

Instead, what you could do is buy a motif of up to 30 stocks for a one-time fee of $9.95, instead of spending $238.50 in commissions to buy 30 individual stocks. Obviously if you have a larger portfolio, the commissions matter less. But most retail investors have less than $100,000 in their after-tax investment portfolios and should be cognizant of their trading fees.

Now let's say you want to buy or sell an individual stock within a motif that you've purchased. You can do that by paying $4.95 in commission for the trade. So again, the transaction cost is lower, and I'm sure the transaction cost will continuously adjust to the market rate, as low cost is one of Motif's value propositions.

Customization Benefits

Another feature I want to highlight in this Motif Investing Review is the customization benefits. Further customization within a motif is also possible and affordable if you want to buy or sell multiple stocks. That's no problem too. Motif Investing gives you 2 cost-efficient options. You can add, delete or change the weightings as you like, then buy the entire customized motif for a commission of just $9.95, regardless of how many stocks you've changed. Alternatively, you can buy or sell each individual stock in a motif you own for just $4.95 in commission per stock.

As your investment performance changes over time, rebalancing can occur to ensure the motif stays true to a specific idea or trend. The creator of the motif will adjust stocks, segments, and weights accordingly. If you decide you want to participate in those rebalance changes, it costs $9.95 to follow suit with one click of a button. In an ideal world, you hope to never pay any fees after purchase ever again. But let's say your Apple stock is up 100% and has gone from 25% to 50% of your entire Silicon Valley motif, and your Netflix stock is down 40% and only has a 6% weighting from a 10% weighting; you might want to rebalance for your own good as one never knows.

Asset Allocation Ease

Motif Investing also offers Strategic Asset Allocation Models through their motifs for those of you who don't want to select stocks and pick ideas. There are no monthly fees once you buy the motif. The idea is just like buying a target date fund based on the age you wish to retire.

Below are three examples of asset allocation motifs for those who plan to retire in 1-2 years, 5-10 years, and 10-20 years.

Motif Investing Strategic Allocation Model

Endless Variety Of Ideas

What's probably the most exciting about Motif Investing is the endless amount of ideas you can invest in. There are so many ideas to choose from, which can be sorted by popularity, performance, industry, brands you know, megatrends, current events, cultural, fixed income, target date, dividends, and asset allocation. It's incredible. The risk is that the investor gets overwhelmed and wants to buy everything.

Here is a snapshot.

Different Types Of Motif Investments


Motif Investing Comparison To ETFs, Stocks, Mutual Funds, Review
Motif Investing Comparison To ETFs, Stocks, Mutual Funds, Review


Instead of showing you in writing how to build your own motif, here's a video showing how it's done. Building your own motif can be a fun and a profitable way to take advantage of new trends in the markets. For example, let's say everybody is up in a frenzy regarding the Zika virus. You or someone in the Motif Investing community can and will probably create an Zika motif that contains companies that benefit from declining tourism dollars in Zika-hit regions or companies that manufacture Zika cures.

I like the idea of creating a motif of multiple stocks based on an idea because it helps remove endogenous risk to a company. You never know if a company might be a fraud, have an accounting scandal, get tripped up by regulation or a lawsuit, and so forth. By buying a basket of stocks to associate around an idea, you de-risk. Concentration risk is the #1 reason why retail investors underperform.

Users have currently built over 100,000 motifs already, more than all the mutual funds and ETFs combined plus the 150+ built motifs by the Motif Investing investment professionals!

Here's my 30 stock, ETF motif that consists of familiar stocks that have corrected by more than 20% from their highs and are beneficiaries in a low interest rate and low oil environment. I invested $10,000 to take advantage of the market volatility on 1/30/2015. My Motif is up about 10% since as of 4Q2016.

Financial Samurai Motif
Here's a Motif I personally built for only $9.95

Wealth Building Recommendations

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The post was last updated in 2021.

About The Author

41 thoughts on “Motif Investing Review: The ETF And Index Fund Killer With $150 Sign Up Bonus”

  1. Great article. Love the idea of the product. I plan to check this out over new year’s weekend. Just one thing… I’m looking at your 30 stocks chart and I’m confused about Netflix as it has never been over $200 per share Yet your chart shows it at $444 a share. Maybe I missed something. Cheers!!

  2. Are you aware of an equivalent for the European markets? I’ve tried to sign up with Motif, but at the moment they’re only working in the US. Thanks a lot!

  3. First time caller long time listener. Love the blog, keep it up! I’m fascinated by Motif but don’t see it as the right source for dividend stocks due to the reinvestment fees. I may be wrong but i can’t find where you’ve ever dove into the world of DSPPs. What is your take on them? It looks like another low-cost entry point into stock ownership allowing for dollar cost averaging. Though you would need to participate in several to achieve diversification. Any thoughts on DSPPs you’d be willing to share?

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  5. There is only one problem with Motif- You have to be in the USA and have a SSN number.

    ETF, Funds , etc ….can be bought worldwide that’s why they have Billions invested

    Restricting investment to only the USA and excluding the rest of the world is really annoying
    Otherwise I think it is great idea. I would invest but can`t



  6. Sam, The ETF Motif you created in January 2015…. How do I locate it in Motif?
    Are you re-balancing it periodically?

    I am a new Motif member… having joined after reading about it in your newsletter.

    Joel Aiken
    North Carolina

    1. Unfortunately, when I created it, I didn’t select the share/searchable option. I asked them if they could make it shareable and there is some technical issue. I will be posting a performance update on April 6, 2015 so look out for it!


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  10. Samurai,

    I have individual accounts, but really like the idea of building and managing my own Motif. I would like to know what your opinion is on oil companies right now and if you think that it building a Motif of some oil stocks is a good idea?



  11. I heard about Motif a few months ago and am intrigued by their model. I gave up stock picking years ago because I lost every time.

    I like Motif’s transparent pricing structure and their ways to invest. I stopped using my Ameritrade account many years ago, so this sounds like a great replacement for me. Thanks!

  12. Due to my employment I can’t open an account, but I think it would be fun to run a Motif and discuss it with those investing in it. Almost like a mini-fund manager! Notwithstanding, not sure why I would follow someone (or for that matter why someone would follow me lol)

    1. The great thing about investing is that it’s a great equalizer. If you read the motif rationale, take a look at the composition, and think it’s a good idea, great. But at the end of the day, if the creator is putting up consistent outperforming numbers with various motifs, then s/he builds credibility that way. At the end of the day, it’s the results that count.

  13. This concept is great and appeals to younger individuals. I doubt this will kill etfs and index funds, just for sheer numbers and trust. Many would rather put their faith in Vanguard and pay the small expense ratio.

    1. You’re probably right, although younger individuals today will be the older and wealthier individuals of tomorrow. It’ll be interesting to see how Motif evolves and adapts over time.

  14. Sam, if this turns into some sort of Index fund kill. Then in my opinion people are misinformed about diversity.

    I just do not see how a couple of motifs with about 30 stocks in them will provide the same diversity as a set of index funds, like the Vanguard Total Stock Market, the Vanguard International fund, and a Bond fund where you own over 5000 stocks following indexes from all over the world.

    However, the plus I see in Motif is. I would personally only invest no more than 10 to 15% in a set of stocks in motif for some extra returns over a longer period of time. I can see people trying to performance chase sectors and too much trading going on. There would be too much temptation right?

    My core portfolio is index funds. Its basically on autopilot, set it and forget it. And time to time I re balance once things are off by 5% or more.

    1. The conclusion I’ve made is that Motif won’t kill the ETF or Index fund industry. It’s simply another low cost way for investors to invest.

      But as a private equity investor, I would happily invest a nice chunk in the company now at Series B valuations, whatever they are. The market is huge.

    2. Exactly, I love to do casual research and a little speculation. I signed on to Motif and put 10 stocks in a basket. Not funded mind you, just trying it out. Some of my ideas looked fabulous. But then I dropped the one or two super star stocks, and did a comparison chart with the S&P over a 10 year period. Index beat me every time. It’s still a fun site to speculate with, and the price is right.

  15. Nice business and review. Can you discuss the math and reasoning why a motif is 30 stocks and not a different number? Will it ever be a different basket of stocks? I recognize the importance of diversification. Just wanted to get a more formal reason why 30. Thx

    1. Hi –
      My name is Nick Bear and I am a registered employee of Motif. We chose 30 stocks as the math supported this quantity while still allowing us to offer a $250 min to buy a motif.

      Yes. We have absolutely explored the possibility of offering a larger quantity or positions in a motif, so more to come!

  16. I have seen their advertisements and read a little about them in the past. I did not know you could trade out some of the stocks though. I need to spend some time looking at the interface to see if I would actually use it.

  17. Very interesting concept. As you pointed out in the article for individuals that are looking to invest in an ETF, this is a great alternative since you can customize the Motif to your investing needs. I own three mutual funds/etfs and I would love to have this feature available for the funds. The one question I have is regarding dividend re-investment. I have read on other websites/reviews that Motif does not currently offer a DRIP option. My understanding of the process is that instead your account is credited for the dividend and it is up to the investor to reinvest in the Motif or invest elsewhere (Please correct me if my understanding of this is incorrect). Would manually re-investing the dividends in your Motif result in a transaction fee each time you choose to re-invest?

    Thanks for the review of Motif Financial Samurai! It is a very interesting financial product and has the chance to continue its great growth rates over the next few years.

    Bert, One of the Dividend Diplomats

    1. Hi – My name is Nick Bear and I am a registered employee of Motif. At this time you are correct with how dividends are handled. We hope that 2015 finally brings DRIPs to our customers, but until then it would cost you a transaction fee if you looked to reinvest.

      Thank you for the interest!

  18. Seems like a great idea. One thought: could the legacy fund managers not also start expanding their ETF’s into different types of ideas which would allow many of these benefits of Motifs? Could Schwab/Blackrock/whoever start creating and selling their own version?

    They don’t appear to be much different than an ETF in concept, just in construction.

    Am I missing something?

  19. Yeah I’m thinking back 13 years ago…to 2001. A company called FolioFN offered “baskets of stocks” and the ability for investors to choose their own baskets from a variety of stocks…all online.

    This is not new.


    1. Tinder is not new either. There was Hot or Not. But Tinder is growing and getting a billion+ valuation. HorN sold for like $30 million.

      There’s a lot of redevelopment of ideas. It’s interesting to see who wins and who loses.

  20. InvestorBestor

    I’m a Motif investors and really enjoy the ease of interface. The social aspect to Motif investing is what makes things the most fun. From a cost perspective, it really is much easier and simpler to invest than trying to pick specific stocks. The 30 stocks in one Motif helps diversify company specific risk.

  21. I really like this idea, I first heard about it only a few days ago from another blogger. The community aspect is a nice touch too. I’ve always had a relatively concentrated portfolio of individual stocks, but have been considering diversify just a little more, and this would be a great way to do it. As Matt said, the Australian market is pretty limited with ETFs, although I could actually do with some international diversification.

  22. Mr. Frugalwoods

    First the criticism:

    So a “Motif” is basically a sector-specific ETF built by some random person on the internet that charges you every time they adjust to follow their sector?

    I don’t want to sound overly negative, but I’m really not seeing the upside here for the individual investor. For the company, sure, seems like a neat model. Outsource your actual investment research to the internet and induce artificially high levels of trading by incentivizing motif adjustments.

    And displaying the “motif” returns with a default “last month” time period and sorting by the highest previous month’s return? I mean come on :-)

    And now the praise:

    Figuring out how to make investing seem relevant to 20-30 somethings is a challenge. My very well paid professional peers are all terrified of investing. When their student loans are finally paid off in the next few years, they will be forced to do something useful with that cash.

    Whoever can spin a story to make investing seem like a good idea to this generation will make a ton of money and hopefully help an entire generation prepare for their future.

    I’m sure Motif’s pitch deck is full of “Millennials love control and customization” slides. Maybe using the analogy of the robotic soda machine that lets you blend your own drink? ETFs are old fountain drinks, Motif is a coke robot! (well, maybe not _exactly_ like that ;-) )

    Anyway, interesting take on things. Seems like the actual value proposition isn’t great for a normal investor… but innovation is neat to see.

    1. My name is Nick Bear and I am a registered employee of Motif.

      Thank you for sharing your thoughts, but I did want to clarify a few points.
      Yes, we do have a “Community Catalog” filled with thousands of motifs built by our customers. The customers who are creating these motifs have investing experience that ranges from novice to sophisticated, which is why we do, like any other broker, stress the importance of due diligence when investing. Some make money on their motifs from royalties do to rebalancing, but most investors understand fees and most creators do not churn a motif for the purpose of royalties.
      More importantly we have a “Professional Catalog” of 150 motifs created by experienced analyst who joined motif to create indexes with a thematic thesis. These motifs have clear track records and no expense ratios associated with them like ETFs. Our Investing Team is led by Tuhin Ghosh, who is an industry veteran with experience and credentials that speak for themselves. You can see his profile on our “About Us” page.

      At any time I would love to hop on a call and chat with you further if you have more questions.

      Thanks again!

  23. Motif Investing is a great concept. The social investing component is what is most intriguing. I think there’s a huge subset of investors out there who trade stocks, options, whatever for fun and for potential fortune. Motif is creating a new investment class that will catch on if it can keep costs competitive and show performance.

    Any backtesting of ideas over 10, 20, 30+ years?


  24. “Or you could buy an expensive target date retirement fund that typically costs over 1% in fees.”

    This may be true, but not necessarily. According to Vanguard’s own website:
    “Vanguard Target Retirement Funds average expense ratio: 0.17%. Industry average expense ratio for comparable target-date funds: 1.05%. Sources: Vanguard and Lipper, a Thomson Reuters Company, as of December 31, 2013.”

    I myself prefer to remain in a diversified portfolio of some half-dozen Vanguard index funds and don’t see jumping ship for a relatively new and untested design like Motif. BTW, I once did a 10-year performance comparison between my portfolio and the comparable Vanguard target fund, and I found I beat the target fund – but only just slightly.

    1. I love Vanguard and for the vast majority of investors, sticking with a Vanguard index fund is the way to go. For those who like to trade and invest on their own, I think Motif is an innovative way to go.

      I’m always going to be investing about 10% of my equities exposure myself. There are fortunes to be made every day. Just got to go find them.

  25. Wall Street Playboys

    Essentially this is a work around to the expense ratio/fees if you really think about it.

    Roughly speaking if you have a vanguard index ETF that has a 0.10% expense ratio (typical for them), then you need to invest exactly $10,000 if motif has the exact same portfolio you want to create.

    The banks have got to love this because retail investors don’t have much emotional control and are going to rebalance/sell/buy individual stocks for sure.

    Would invest in company.

    1. Fees, the bane of all clients. Fees are always under pressure in finance, and practically everywhere except for the collusive real estate industry where 5-6% commissions STILL remain unbelievably.

      Motif will need to develop stickier and reoccurring revenue streams over time.

  26. Great Idea!

    I really like the custom-ability of the ‘Motifs’.

    I have recently been looking at purchasing some ETFs, however feel the types are relatively limited in the Australian market when it comes down to industry exposure (essentially heavily Financial + Mining). Without the ability to focus into other industries in a meaningful way through a diversified product. This seems like a way to bridge that gap between ETFs and individual stocks.

    One issue I can think of is how do you have direct ownership over the stocks if it is within the ‘motif’ where the weightings and differing prices leave you with partial ownership of some stocks? Hypothetically, what happens in the situation Motif goes bust?


    1. Hi Matt –

      I am a registered employee of Motif. To address your questions.

      We have a trading platform that allows individuals to trade fractional shares in real-time, just as full shares would trade. You may only buy .1 shares of Google in your motif, but you still own the value of those shares.

      We do not take custody of any customer assets, our clearing broker Apex does this. If Motif went under, you would have your account held at Apex until you decide what to do with it.


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