Schwab Intelligent Portfolios outperformed all other robo-advisors in the third quarter for portfolios composed of a 60/40 stock/bond mix for investors in high tax brackets, according to a recent report cited by ThinkAdvisor.
Leader of the Pack, But Not for the Year
Schwab’s robo, which is the second-largest by assets after Vanguard Personal Advisor Services, gained 3.97% in the third quarter, according to BackEndBenchmarking’s latest Robo Report, which looks at comparable portfolios in taxable accounts across 20 robo-advice platforms, according to the publication.
It was Schwab’s rivals, however, that delivered the best results year to date and year-over-year. Betterment was the second-best performing robo platform in the third quarter but beat Schwab by a hair for one-year performance, ThinkAdvisor writes. Betterment’s portfolio delivered 11.97% over the 12 months ending Sept. 30 while Schwab’s robo gained 11.93%, according to the publication. TD Ameritrade led the robos in year-to-date performance, gaining 11.98% through Sept. 30, ThinkAdvisor writes.
But Schwab’s model portfolio was also the least risky for the year ended Sept. 30, according to the publication. It had the highest Sharpe ratio and the lowest standard deviation, capturing 77% of the market’s downside but 105% of its upside, ThinkAdvisor writes.
The Robo Report notes, however, that performance is only one criteria for evaluating robo-advisors, according to the publication. Other important factors to consider are online tools, account communications and financial planning options, according to the report, ThinkAdvisor writes. Here, however, a new report by MyPrivateBanking Research, which takes into account portfolio management and financial planning, also places Schwab at the top, according to the publication.
