Charles Schwab Investment Management has made a series of Schwab Model Portfolios available on the Riskalyze platform for the first time, expanding their distribution to a larger number of RIAs and others Riskalyze users.
The 14 Schwab Model Portfolios offer advisors risk-based allocations they can implement and adjust using either low-cost, market-cap-weighted exchange-traded funds or a blend of market-cap and strategic beta ETFs, Schwab said Thursday.
A behavioral overlay was also built into the models to help advisors’ clients stay invested across market cycles and conditions, the company said.
The Schwab portfolios offer advisors two approaches to portfolio construction: A Series, a broad asset allocation approach using traditional market-cap-weighted exposures to equity, fixed income and real assets for a diversified, low-cost core portfolio; and AB Series, an approach that builds from the core and incorporates strategic beta, value, growth and other sub-asset class allocation exposures, the company explained.
Adding the 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,” according to Jake Gilliam, head of Multi-Asset Solutions at CSIM.
In August, CSIM announced the availability of turnkey Schwab model ETF portfolios to advisors through the Envestnet Fund Strategist Network using the same A Series and AB Series approach. Wasmer Schroeder fixed income strategies, which Schwab acquired early this year, are also available on Envestnet’s separately managed account platform.
Riskalyze provides quantitative measurements of portfolios on its platform, allowing advisors to align investment solutions with the specific risk tolerance of each client.
One of the key metrics offered 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 of 2020, Schwab said.
— Check out Here’s How Advisors Should Position Portfolios Now: BlackRock on ThinkAdvisor.