To preface this, I'm planning on leaving betterment this coming year and moving everything to vanguard. My reasons fall in line with this post over on GCC:
http://www.gocurrycracker.com/why-betterment-has-zero-of-our-dollars/That said, I'd prefer to not turn this into another debate of betterment vs. vanguard. Seems like good reasons on either side, I've just chosen to go the vanguard route.
Anywho, I'm looking through my betterment roth IRA portfolio and I see they've put about 10% of my money into EEM-iShares MSCI Emerging Markets ETF, with a fee of .69. They've got a ! next to the fee on their site, with a little box that says "Betterment's tax algorithms moved you into a slightly higher fee fund to save you taxes".
Now, I'm just a novice investor, but I'm a bit confused. I get that you may receive a tax credit due to holding foreign investments, but I fail see how that would work in a roth. Most sources I've seen have recommended using your taxable accounts, not your roth, to invest internationally for tax benefits (
https://www.bogleheads.org/wiki/Tax-efficient_fund_placement).
Am I missing something here? Is there some legit reason betterment would put me in a high fee international fund to somehow save me taxes in my roth? I fully intend to contact betterment about this tomorrow, but I wanted to get some outside input too.
Thanks for taking the time to read through this.