While the Schrodinger is an asset allocation portfolio, it is a special type in that the owner does nothing except invest money and specify the stock/bond ratio. If I recall correctly, this portfolio is approximately 70% stocks, 20% bonds, and nearly 10% cash. Check the pie chart below for more specific information.
While this robo advisor portfolio does not provide downside protection as is the case with the other portfolios tracked here at ITA, it is a great example for investors who prefer to do as little as possible when it comes to investing in the stock market. In a family where there are several portfolios, the Schrodinger is a good example for one of those portfolios.
Schrodinger Investment Quiver
Below is the current “Intelligent Portfolio” housed at Schwab. This portfolio is expense free other than the standard expense ratios associated with all ETFs. The owner of this portfolio pays zero for this service and there are no commissions when buy or selling shares. I think Schwab makes their money by equitizing the cash held in all these “intelligent” accounts.
Schrodinger LRPC Recommendations
The following worksheet is not used in the management of the Schrodinger. I include it for interest. That fact that all ETFs are recommended as a Buy indicates we are still in a bull market.
Schrodinger Performance Data
Now we come to the interesting part of this review. The IRR is quite respectable and shows up rather well when compared to the Time-Weighted returns for several benchmarks.
This data runs from 7/31/2017 through 2/17/2021.
Schrodinger Risk Ratios
I pay most attention to the Sortino and Jensen data points. The Sortino provides clues as to portfolio gains while Jensen’s Alpha tells me how well the portfolio is performing based on risk and benchmark measurements. The Jensen is so much more valuable that the simple IRR percentage. Also, pay attention to the trend-line for the Jensen.
I plan to keep one year of this data running and visible in the graph shown below. If you have any questions, write them in the Comments section.