Sunset on Columbia River.
Before moving into the Schrodinger update, register as a Guest and wait to be elevated to the Platinum level if you wish to read all blog posts.
Schrodinger is the Schwab Intelligent Portfolio up for review this morning. As a reminder to new readers, the Schrodinger is managed by computer at Schwab. There is no cost to the management other than the standard expense ratios assigned to the different ETFs. Otherwise, there is zero cost to this portfolio. All one needs to do is save and let the computer algorithm make the buy and sell decisions. There is very little turnover in this portfolio and the fact that it is larger than $50,000 means it qualifies to be tax managed. I would not hesitate to use the Intelligent Portfolio model with either tax deferred or taxable accounts.
Schrodinger Asset Allocation
Below is the current Asset Allocation layout for the Schrodinger. I would prefer fewer holdings and a minimum of 3% to be held for each asset. A percentage of 0.2% for SCHH contributes little to nothing to the portfolio performance. In addition, SCHH and USRT likely overlap considerably.
Schrodinger Performance Data
Since 12/31/2021 the Schrodinger doubled the SPY benchmark. The gap is even larger for the other potential benchmarks. With this investing model investors can sit back, do nothing, and let the computers do their work. As Artificial Intelligence (AI) improves, I expect computers will do more and more work when it comes to portfolio management.
Schrodinger Risk Ratios
Over the past year the Jensen Alpha or Jensen Performance Index dropped into the negative zone only once – back in October of 2023.
The Information Ratio is the head to head comparison with SPY and we see the portfolio bested the benchmark each month. Last October was a close call, but still a victory for the Schrodinger. Thus far there is very little to criticize when it comes to Schwab’s Intelligent Portfolio investing model.
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