An automated system monitors your portfolio closely—this includes:
  • Rebalancing as needed: Your portfolio won’t trade every day, however we perform daily check-ins. When an asset class exceeds its allocated portion in your portfolio, the excess ETF shares are sold, and the proceeds are used to buy positions that have fallen below their target percentage; this keeps your portfolio consistent with your Investor Profile.
  • Professional oversight: Periodic evaluations are performed to ensure that your asset allocation represents the right mix of risk and return. The ETFs included in Schwab Intelligent Portfolios are also evaluated to ensure that they continue to meet the stringent selection criteria.
  • Tax-loss harvesting: If you have an account with $50,000 or more in assets, and you've elected to automate tax-loss harvesting, your account will be tracked daily for opportunities to offset capital gains by strategically realizing losses.
Typically, exchange-traded fund (ETF) shares in your portfolio will be sold for one of two reasons: to rebalance your strategic asset allocation, or to take advantage of tax-loss harvesting opportunities. An entire ETF position might also be sold if it no longer meets the investing criteria, but such instances are rare. Learn More

Every portfolio has a target asset allocation—a combination of stocks, bonds, commodities and cash determined by the investor's stated goals, risk tolerance and time horizon. Over time, however, contributions/withdrawals, gains, and losses cause your portfolio to stray from the original target and become unbalanced.

The solution is rebalancing—the act of periodically buying or selling assets to restore your portfolio to its original target allocations. Schwab Intelligent Portfolios automatically rebalances accounts thanks to an algorithm that adjusts your account when an asset class shifts above or below its target range.

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Rebalancing and Tax-Loss Harvesting in Schwab Intelligent Portfolios™

If a taxable security has lost value since you purchased it, you can sell it at a loss, and use the loss to offset your capital gains, and up to $3,000 of ordinary income a year, for federal income tax purposes. This is the essence of tax-loss harvesting, a powerful process designed to reduce investment-related taxes.

Tax-loss harvesting can be complicated and time consuming but with a Schwab Intelligent Portfolios account of $50,000 or more, tax-loss harvesting will be handled automatically once you enroll in this service. Your accounts will be monitored for tax-loss harvesting opportunities—examining not only the loss itself, but also your cost basis for tax purposes, as well as the amount of time you've held the position. Please note, if your spouse also has a Schwab Intelligent Portfolio, you can elect to have those accounts grouped to be considered together in the tax-loss harvesting process. 
 
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Rebalancing and Tax-Loss Harvesting in Schwab Intelligent Portfolios™

The Sweep Program is a feature that allows for the cash allocation in your Schwab Intelligent Portfolios account to earn interest by being "swept" to a FDIC-insured deposit account at Schwab Bank. Cash earns interest at a rate that is determined by taking the greater of (i) the rate determined by reference to a third party index for retail deposits at the $100,000 level based on a survey as calculated by RateWatch; or (ii) the rate paid on cash balances of $1,000,000 or more in Schwab's bank sweep program for brokerage accounts. See Current Interest Rates to see the rate applied to Cash Balances.

You can view the cash allocation on your portfolio dashboard at Intelligent.Schwab.com.  You can withdraw cash from your Schwab Intelligent Portfolios account at any time by logging in to your account and requesting a transfer.