FolioFn's ETF Portfolio

Pentagon Federal Credit Union represents 650,000 active and retired members of the armed forces. The credit union has $8 billion in asset. Now the online discount broker FolioFn Inc. is providing its investment services to the Union offering nine ready-made "mini folios" of exchange traded funds (ETFs) tailored to an investor's tolerance for risk and investment goals, the company said.

The FolioFn long-term aggressive mini-folio, for instance, puts 90% in stocks and 10% in less risky bonds. Specifically, the portfolio has 30% each in Vanguard Total Stock Market Vipers (VTI) and iShares Russell Midcap Index (IWR); 15% each in the broad-international stock iShares MSCI EAFE (EFA) and iShares Cohen & Steers Realty Majors (ICF) ; and 10% in iShares Lehman Aggregate Bond (AGG). The short-term conservative model stashes 90% in the bond ETF and 5% each in the U.S. total-market and midcap funds.

The portfolios are more customized than so-called target-date funds, which only take into account an investor's projected time until retirement. Taking one example, a 25-year old might be saving up for the short term to buy a house, while another person the same age may be investing with longer-term retirement goals in mind. To determine their investment profile, members of the Pentagon credit union complete a short questionnaire before selecting one of the mini-folios. From there, participants can own a mini-folio for $5 a month with no minimum investment. The $5 charge covers five trades a month, although it doesn't include the fees charged by the underlying ETFs. The average expense ratio of the ETFs in the long-term aggressive mini-folio, for example, is 0.23%.

FolioFn's subscription service available to the public charges investors $19.95 a month, or $199 a year, which includes 200 monthly trades and access to "ready-to-go folios" of stocks and ETFs that can be further customized.