Schwab Adds Low-Cost Market-Cap-Weighted And Blended ETF Model Portfolios To Riskalyze Platform, Enabling Advisors To Create And Compare Investment Portfolios Based On Client Risk Tolerance

Charles Schwab Investment Management, Inc. (CSIM), an asset management arm of The Charles Schwab Corporation, today announced the availability of a series of Schwab Model Portfolios to advisors on the Riskalyze platform.
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Charles Schwab Investment Management, Inc. (CSIM), an asset management arm of The Charles Schwab Corporation, today announced the availability of a series of Schwab Model Portfolios to advisors on the Riskalyze platform.

The 14 Schwab Model Portfolios offer advisors risk-based allocations they can implement and adjust using either low-cost, market-cap-weighted ETFs or a blend of market-cap and strategic beta ETFs. A behavioral overlay is also built into the models with the aim of helping advisors' clients stay invested across market cycles and conditions.

Riskalyze provides quantitative measurements of portfolios on its platform so advisors can align investment solutions with the risk tolerance of their clients. One of the key metrics provided is the Riskalyze GPA®, which measures return efficiency among portfolios with similar risk profiles and scores them on a scale similar to that used in a school grading system, ranging from 1.0 to 4.3. Higher scores indicate more efficient portfolios. The 14 Schwab Model Portfolios earned Riskalyze GPA scores ranging from 3.5 to 4.1 for the fourth quarter 2020.

The portfolios offer advisors two straightforward approaches to portfolio construction:

  • A Series - a broad asset allocation approach that uses traditional market-cap-weighted exposures to equity, fixed income and real assets for a diversified, low-cost core portfolio
  • AB Series - an approach that builds from the core and incorporates strategic beta, value, growth, and other sub-asset class allocation exposures

Average weighted expenses for the Schwab Model Portfolios range from 0.04% to 0.12% when using Schwab ETFs.*

Advisors on Riskalyze can choose to implement the Schwab Model Portfolios as presented or adjust their allocations, mixing and matching with other mutual funds and ETFs from Schwab or a different provider as they see fit. When changes are made, a new Riskalyze GPA score is issued to each portfolio. Average weighted expenses may change if advisors add or remove specific ETFs or mutual funds within the portfolios they build.

"Years of research and expertise went into the construction of these model portfolios so we were pleased to see that reflected in the GPA scores they earned from Riskalyze," said Jake Gilliam, Head of Multi-Asset Solutions at CSIM. "Advisor response to the model portfolios has been strong, so we are excited to be expanding distribution to the more than 7,000 RIAs and institutions using the Riskalyze platform today."

More information about the Schwab Model Portfolios is available here.

Expanding Distribution

"The addition of these model portfolios to the Riskalyze platform aligns with our strategy to expand distribution of our models as well as turnkey portfolios on leading third-party platforms to meet demand from advisors, IBDs and other institutions," added Gilliam.

In August, CSIM announced the availability of turnkey model ETF portfolios to advisors through the Envestnet Fund Strategist Network using the same A Series and AB Series approach as the model portfolios on the Riskalyze platform. In addition, Wasmer Schroeder fixed income strategies, which Schwab acquired earlier this year, are available on Envestnet's Separately Managed Account Platform.

About Charles Schwab Investment Management, Inc.

As of September 30, 2020, Charles Schwab Investment Management managed approximately $534.0 billion on a discretionary basis and approximately $18.0 billion on a non-discretionary basis. More information is available at www.schwabfunds.com.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients' goals with passion and integrity.

More information is available at aboutschwab.com. Follow us on Twitter, Facebook, YouTube, and LinkedIn.

Disclosures

Charles Schwab Investment Management, Inc. (CSIM) is the investment advisor for Schwab Funds and Schwab ETFs. Schwab Funds are distributed by Charles Schwab & Co., Inc. (Schwab), Member SIPC. Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). CSIM and Schwab are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation and are not affiliated with SIDCO.

Investing involves risk. Diversification strategies do not ensure a profit and do not protect against losses in declining markets. Information concerning portfolio allocations and holdings is representative of the portfolio allocations for this strategy and does not necessarily reflect an actual account. Actual portfolios may differ as a result of account size, client-imposed investment restrictions, the timing of client investments, market, economic and individual company considerations. Futures and options may not be used in the portfolio to create leverage or for any other reason.

Past performance does not guarantee or indicate future results.This information should not be relied upon as investment advice, research, or a recommendation by CSIM regarding (i) the ETFs, (ii) the use or suitability of the model portfolio allocations or (iii) any security in particular. This information is intended for use only by third party financial advisors, with other information, as a resource to help build a portfolio or as an input in the development of investment advice for their own clients. Such financial advisors are responsible for making their own independent judgment as to how to use this information, and only clients and their advisors know enough about their financial circumstances to make investment decisions. CSIM does not have investment discretion over or place trade orders for any portfolios or accounts derived from this information. Performance of any account or portfolio derived from this information may vary materially from the performance shown herein. There is no guarantee that any investment strategy illustrated will be successful or achieve any particular level of results.

Riskalyze, Inc. is a separate and unaffiliated entity from Charles Schwab Investment Management, Inc. Riskalyze GPA® is a registered trademark of Riskalyze, Inc.

Envestnet is a separate and unaffiliated entity from Charles Schwab Investment Management, Inc.

* Cost is the average weighted expense ratio as of April 30, 2020. Portfolio allocations are composed of certain low-cost Schwab ETFs. Other ETFs may be appropriate for a given asset class and should be evaluated on a case-by-case basis.

©2020 Charles Schwab Investment Management, Inc. All rights reserved.

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