Schwab Managed Portfolios – Are They Worth The Price?

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This is the article displaying the portfolios by the managed portfolios over at Charles Schwab. Here you will find a description, resources, and performance for the portfolios as well as detailed information on how to implement them yourself.

Schwab Managed Portfolios – are they worth the price?

Charles Schwab founded his business in 1971 and is now one of the largest banks with a brokerage and an ETF business. Schwab brokerage offers to manage your portfolios according to your risk level using several portfolios. Schwab also offers one-fund target-date retirement funds. The Charles Schwab story is interesting in itself and is vividly described in Charles Schwab: How One Company Beat Wall Street and Reinvented the Brokerage Industry.

Schwab also has its own robo advisor called intelligent portfolios.

Description of Charles Schwab managed portfolios

The Charles Schwab managed portfolios are a collection of portfolios managed by Charles Schwab using Schwab funds. As usual, they employ a ladder of portfolios to cater to every risk level.

This video explains how they manage risk. One thing stood out from viewing that video:

“And, we build that asset allocation for today’s world; not the markets of the 90’s or early 2000’s.”

– Jim Peterson, Cheif Investment Officer, Charles Schwab

From an investing perspective, there is no difference in investing 50 years ago and today. The only thing that has changed is the amount of information and the investment vehicles you use.

Portfolioeinstinein.com is proof enough that you don’t invest in a particular market or a particular time. It does not help your returns, on the contrary. See the article Meet Susan: The Most Important Question In Investing.

Charles Schwab's breakdown of which asset classes they use in their managed portfolios
Charles Schwab’s breakdown of which asset classes they use in their managed portfolios. Source: charlesschwab.com

Performance of Charles Schwab managed portfolios

NameAsset class countYear to dateReturn in 201910 year returnCAGR since 1989 (%)Risk levelExpense ratio
Schwab Managed Portfolio, Conservative Income61.478.443.55%5.6810.10%
Schwab Managed Portfolio, Income With Growth10-0.512.174.89%6.410.09%
Schwab Managed Portfolio, Balanced11-3.415.695.63%7.1610.11%
Schwab Managed Portfolio, Balanced With Growth11-5.5919.456.87%7.8520.11%
Schwab Managed Portfolio, Growth9-7.8622.397.80%8.2330.11%
Schwab Managed Portfolio, Aggressive Growth7-9.7524.88.80%8.5630.10%

Asset Allocation of Charles Schwab managed portfolios

Schwab Managed Portfolio, Aggressive Growth               

  • 33.00%  US Large Cap (VV)
  • 13.00%  US Small Cap (VIOO)
  • 5.00%    REITs (VNQ)
  • 31.00%  International Developed Blend (VEA)
  • 9.00%    Emerging Markets (VWO)
  • 5.00%    Cash (money market fund) (BIL)
  • 4.00%    Commodities (DBC)

Schwab Managed Portfolio, Balanced With Growth                       

  • 22.00%  US Large Cap (VV)
  • 7.00%    US Small Cap (VIOO)
  • 5.00%    REITs (VNQ)
  • 20.00%  International Developed Blend (VEA)
  • 5.00%    Emerging Markets (VWO)
  • 26.00%  Total US Bond Market    (BND)
  • 5.00%    Cash (money market fund) (BIL)
  • 6.00%    Commodities (DBC / GSG)
  • 1.00%    High Yield Corporate Bonds         (HYG / JNK)
  • 2.00%    TIPS       (VTIP)
  • 1.00%    Non-US Bonds   (BNDX)

Schwab Managed Portfolio, Growth                      

  • 29.00%  US Large Cap      (VV)
  • 9.00%    US Small Cap      (VIOO)
  • 5.00%    REITs     (VNQ)
  • 26.00%  International Developed Blend      (VEA)
  • 7.00%    Emerging Markets           (VWO)
  • 12.00%  Total US Bond Market    (BND)
  • 5.00%    Cash (money market fund)          (BIL)
  • 6.00%    Commodities     (DBC / GSG)
  • 1.00%    TIPS       (VTIP)

Schwab Managed Portfolio, Balanced   

  • 15.00%  US Large Cap      (VV)
  • 5.00%    US Small Cap      (VIOO)
  • 5.00%    REITs     (VNQ)
  • 13.00%  International Developed Blend      (VEA)
  • 4.00%    Emerging Markets           (VWO)
  • 33.00%  Total US Bond Market    (BND)
  • 15.00%  Cash (money market fund)          (BIL)
  • 5.00%    Commodities     (DBC / GSG)
  • 1.00%    High Yield Corporate Bonds         (HYG / JNK)
  • 2.00%    TIPS       (VTIP)
  • 2.00%    Non-US Bonds   (BNDX)

Schwab Managed Portfolio, Income with Growth                            

  • 9.00%    US Large Cap      (VV)
  • 2.00%    US Small Cap      (VIOO)
  • 5.00%    REITs     (VNQ)
  • 8.00%    International Developed Blend      (VEA)
  • 37.00%  Total US Bond Market    (BND)
  • 20.00%  Cash (money market fund)          (BIL)
  • 1.00%    Commodities     (DBC / GSG)
  • 4.00%    High Yield Corporate Bonds         (HYG / JNK)
  • 10.00%  TIPS       (VTIP)
  • 4.00%    Non-US Bonds   (BNDX)

Schwab Managed Portfolio, Conservative Income                           

  • 5.00%    REITs     (VNQ)
  • 40.00%  Total US Bond Market    (BND)
  • 25.00%  Cash (money market fund)          (BIL)
  • 7.00%    High Yield Corporate Bonds         (HYG / JNK)
  • 18.00%  TIPS       (VTIP)
  • 5.00%    Non-US Bonds   (BNDX)

Check the best mutual funds and ETFs at What Is The Best ETF And Mutual Fund?

Resources for Charles Schwab managed portfolios

Charles Schwab has a good youtube channel with lots of useful information.

Here are the managed portfolios at Schwab.

Conclusion

The Charles Schwab Managed Portfolios may smooth the ride but they do cost a bit of money to implement.

Is it worth it?

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