The world of automated investing is growing—and shows no signs of slowing down.
Barron's recently reported on a new study from Backend Benchmarking, which tracks the performance of robo-advisors. As of December 31 of last year, Backend has two full years of performance data for certain portfolios within several automated investment platforms, including Schwab Intelligent Portfolios®.
Their calculations show that the portfolio they built using Schwab Intelligent Portfolios had the best performance among similar taxable portfolios, with a return of 27.7%. While it can be difficult to rank the performance of robo-advisors due to their customized nature, Backend aimed to create similar asset allocations at each firm, according to the article. All portfolios studied were based on a moderate risk tolerance level with an allocation of roughly 60% stocks and 40% bonds.
Schwab Intelligent Portfolios is designed to provide broad diversification across stocks, bonds, commodities and cash, with up to 20 asset classes in any single portfolio. Additionally, automated rebalancing within Schwab Intelligent Portfolios accounts helps investors stay on track with their strategic asset allocation plans.
And while performance is an important factor for investors to consider when choosing a robo-advisor, progress toward your long-term goals is perhaps even more crucial. That's why Schwab Intelligent Portfolios uses a unique algorithm to build a portfolio based on each individual's time horizon, risk tolerance and financial goals—free of advisory fees, commissions and account service fees.
Read the full article from Barron's here.