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Schwab Select ETF Plan Has Bright Prospects
Posted on April 06, 2011 at 13:23 PM EDT
Schwab ETF Plan Has Good Pedigree and Bright Prospects Retirement is now a "hair on fire" problem. There is much talk of working longer, downsizing, living on less. However, there is something you can do to help improve your risk adjusted returns. Look at your portfolios and plans to build a diversified portfolio with a systematic investment strategy. This is not as hard as you might think -- to highlight this point, we feature a plan created by a non professional that matches up well with any of the other plans. Kevin Carr . is an individual investor who employs a long term strategy. He manages an individual common stock portfolio as well as many plans on MyPlan IQ. If you have any questions regarding this plan please contact him. This plan provides you with Schwab's experts’ top picks of low-cost ETFs representing approximately 50 ETFs, based on rigorous criteria including expenses, tracking error, trading volume, and more. Schwab ETFs trade commission free. There are no redemption periods so you can start today and not worry about holding periods. We report on this Schwab ETF Select List which consists of 49 funds. These funds give exposure to 6 major assets: US Equity, Commodity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income. Asset Class Ticker Name LARGE BLEND SCHX Schwab U.S. Large-Cap ETF LARGE GROWTH SCHG Schwab U.S. Large-Cap Growth ETF LARGE VALUE SCHV Schwab U.S. Large-Cap Value ETF MID-CAP BLEND VO Vanguard Mid-Cap ETF Mid-Cap Growth VOT Vanguard Mid-Cap Growth ETF MID-CAP VALUE VOE Vanguard Mid-Cap Value ETF SMALL BLEND SCHA Schwab U.S. Small-Cap ETF Small Growth VBK Vanguard Small Cap Growth ETF SMALL VALUE VBR Vanguard Small Cap Value ETF LARGE BLEND SCHB Schwab U.S. Broad Market ETF LARGE VALUE VYM Vanguard High Dividend Yield Indx ETF Foreign Large Blend SCHF Schwab International Equity ETF Foreign Large Growth EFG iShares MSCI EAFE Growth Index Foreign Large Value EFV iShares MSCI EAFE Value Index FOREIGN SMALL/MID GROWTH SCHC Schwab International Small-Cap Eq ETF DIVERSIFIED EMERGING MKTS SCHE Schwab Emerging Markets Equity ETF Foreign Large Blend VEU Vanguard FTSE All-World ex-US ETF WORLD STOCK VT Vanguard Total World Stock Index ETF EUROPE STOCK VGK Vanguard European ETF DIVERSIFIED PACIFIC/ASIA VPL Vanguard Pacific Stock ETF JAPAN STOCK EWJ iShares MSCI Japan Index China Region GXC SPDR S&P China Intermediate-Term Bond BND Vanguard Total Bond Market ETF SHORT GOVERNMENT SCHO Schwab Short-Term U.S. Treasury ETF Intermediate Government SCHR Schwab Intermediate-Term U.S. Trsy ETF LONG GOVERNMENT TLH iShares Barclays 10-20 Year Treasury Bd Inflation-Protected Bond SCHP Schwab U.S. TIPS ETF Intermediate-Term Bond CIU iShares Barclays Intermediate Credit Bd High Yield Bond JNK SPDR Barclays Capital High Yield Bond WORLD BOND BWX SPDR Barclays Capital Intl Treasury Bond Muni National Long MUB iShares S&P National AMT-Free Muni Bd Consumer Discretionary XLY Consumer Discret Select Sector SPDR Consumer Staples XLP Consumer Staples Select Sector SPDR Equity Energy XLE Energy Select Sector SPDR Financial XLF Financial Select Sector SPDR Health XLV Health Care Select Sector SPDR Industrials XLI Industrial Select Sector SPDR Natural Resources XLB Materials Select Sector SPDR Technology XLK Technology Select Sector SPDR Communications IYZ iShares Dow Jones US Telecom Utilities XLU Utilities Select Sector SPDR COMMODITIES BROAD BASKET DBC PowerShares DB Commodity Index Tracking Commodities Agriculture DBA PowerShares DB Agriculture Commodities Precious Metals IAU iShares Gold Trust Commodities Industrial Metals DBB PowerShares DB Base Metals Commodities Energy USL United States 12 Month Oil MISCELLANEOUS SECTOR PFF iShares S&P U.S. Preferred Stock Index REAL ESTATE VNQ Vanguard REIT Index ETF Asset Class Number of funds Balanced Fund 0 REITs 1 Fixed Income 9 Commodity 5 Sector Fund 11 Foreign Equity 8 Emerging Market Equity 3 US Equity 11 Other 1 Total 49 Many are looking for access to a well rounded ETF plan through Schwab. This fills this hole and as Schwab makes more of their own funds available, it will be possible to move them into the plan. On this review, the only comment would be to add another REIT choice. The other asset classes have a good number of selections without being overwhelming. As of Apr 4, 2011, this plan investment choice is rated as above average based on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings: Diversification -- Rated as great (99%) Fund Quality -- Rated as average (47%) Portfolio Building -- Rated as average (56%) Overall Rating: above average (66%) Thehigh diversification score means that all the major and minor asset classes have been ticked. Fund quality is lower because some of the ETF's don't have a long history but that shouldn't impede the ability for the future. Portfolio Discussions The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies. For comparison purpose, we also include the moderate model portfolios of a typical 6 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent: US Equity: SPY or VTI Commodity: DBC Foreign Equity: EFA or VEU REITs: IYR or VNQ or ICF Emerging Market Equity: EEM or VWO Fixed Income: AGG or BND Performance chart (as of Apr 4, 2011) Performance table (as of Apr 4, 2011) Portfolio Name 1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe Schwab ETF Select List Tactical Asset Allocation Moderate 9% 82% 8% 72% 12% 89% Schwab ETF Select List Strategic Asset Allocation Moderate 14% 118% 3% 15% 4% 20% Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate 9% 81% 10% 82% 13% 89% Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate 14% 121% 4% 20% 7% 34% This portfolio performs well against the six asset ETF benchmark SAA provides lower volatility while albeit delivering lower historical returns but as more of the newer funds are applied to the portfolio, there will be more opportunity for closing the gap The TAA portfolios run neck and neck over the five year period In a future article, we will review performance over the last three months to see how the plan has performed in the light of recent events. Kay Takeaways Building a plan of funds is not the preserve of the few -- anybody who has the interest and application to research can provide well constructed plans It is possible to benefit from those individuals while still having transparency and not being captive to any particular broker Symbols: SPY , VTI , EFA , VEU , EEM , VWO , IYR , VNQ , ICF , AGG , BND , DBC , HYG , JNK , PHB , CIU , BIV , MUB , TFI , PZA , MLN , GII , PUI , DBU , RYU , UPW , IYH , IXJ , VHT , XBI , PBE , DBR , RYH , EFG , IXP , PTE , DGG , LTL , IYM , IGE , VAW , XLB , XME , PYZ , DBN , RTM , UYM , MTK , PTF , DBT , RYT , ROM , GWL , PFA , IVE , IWW , JKF , VTV , ELV , PWV , RPV , SCHV , EFV , PID , DWM , IYF , VFH , IPF , PFI , DRF , RYF , KXI , VDC , PSL , DPN , RHS , RXI , VCR , IYJ , EXI , VIS , IGOV , BWX , WIP , IVV , IYY , IWV , VV , DLN , RSP , SCHX , IOO , VT , SHY , SHV , VGSH , PLK , USY , TLT , TLH , IEF , EDV , VGLT , TLO , PLW , IEV , VGK , PEF , DEB , IVW , IWZ , JKE , VUG , ELG , QQQQ , RPG , SCHG , IJJ , IWS , JKI , VOE , EMV , PWP , RFV , UVU , IJH , IWR , JKG , VO , MDY , EMM , PJG , DON , EZM , MVV , IFSM , VSS , SCHC , IJS , IWN , JKL , VBR , DSV , PWY , RZV , UVT , IJR , IWM , JKJ , VB , DSC , PJM , DES , SAA , UWM , SCHA , GMM , PXH , DEM , SCHE , ITE , IXC , IPW , DBE , RYE , DKA , IEI , VGIT , IJK , IWP , VOT , EMG , PWJ , RFG , UKW , IJT , IWO , JKK , VBK , DSG , PWT , RZG , UKK , TIP , EPP , VPL , GMF , PAF , EWJ , JPP , PJO , DXJ , GSG Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical. comments(0)
DEBENHAMS DEVELOPMENT SECS ENCRES DUBUIT EUROMEDIS GROUPE Market Vectors Long Municipal Index PIONEERING TECH PowerShares 1-30 Laddered Treasury Portfolio PowerShares Active Low Duration Portfolio PowerShares DB Commodity Index Fund PowerShares DB Energy Fund PowerShares Dynamic Basic Materials Sector Portfolio PowerShares Dynamic Consumer Staples Sector Portfolio PowerShares Dynamic Financial Sector Portfolio PowerShares Dynamic Technology Sector Portfolio PowerShares ETF Trust Dynamic Biotech & Genome Port PowerShares ETF Trust Dynamic Utilities Portfolio PowerShares ETF Trust International Dividend Achievers Portfolio PowerShares Exchange Traded Fund PowerShares Exchange Traded Fund Dynamic Mid Cap Portfolio PowerShares Exchange Traded Fund Dynamic Small Cap Portfolio PowerShares Exchange Traded Fund Trust Dynamic Large Cap Value Portfolio PowerShares Exchange Traded Fund Trust Dynamic Mid Cap Value Portfolio PowerShares Exchange Traded Fund Trust Dynamic Small Cap Growth Portfolio PowerShares Exchange Traded Fund Trust Dynamic Small Cap Value Portfolio PowerShares Exchange-Traded Fund Trust II PowerShares FTSE RAFI Emerging Markets Portfolio PowerShares FTSE RAFI Asia Pacific ex-Japan Portfolio PowerShares Fundamental High Yield Corporate Bond Portfolio PowerShares Insured Municipal Bond Portfolio PowerShares S&P International Developed High Quality Portfolio ProShares Ultra Basic Materials ProShares Ultra MidCap400 ProShares Ultra Russell MidCap Growth ProShares Ultra Russell MidCap Value ProShares Ultra Russell2000 ProShares Ultra Russell2000 Growth ProShares Ultra Russell2000 Value ProShares Ultra SmallCap600 ProShares Ultra Technology ProShares Ultra Telecommunications ProShares Ultra Utilities Rydex ETF Trust Rydex S&P Equal Weight Consumer Staples ETF Rydex ETF Trust Rydex S&P Equal Weight ETF Rydex ETF Trust Rydex S&P Equal Weight Energy ETF Rydex ETF Trust Rydex S&P Equal Weight Financial ETF Rydex ETF Trust Rydex S&P Equal Weight Health ETF Rydex ETF Trust Rydex S&P Equal Weight Materials ETF Rydex ETF Trust Rydex S&P Equal Weight Technology ETF Rydex ETF Trust Rydex S&P Equal Weight Utilities ETF Rydex ETF Trust S&P 500 Pure Growth ETF Rydex ETF Trust S&P 500 Pure Value ETF Rydex ETF Trust S&P Midcap 400 Pure Growth ETF Rydex ETF Trust S&P Midcap 400 Pure Value ETF Rydex ETF Trust S&P Smallcap 600 Pure Growth ETF Rydex ETF Trust S&P Smallcap 600 Pure Value ETF S&P DEP RECEIPTS SPDR Barclays Capital International Treasury Bond ETF SPDR Barclays High Yield Bond ETF SPDR Barclays Intermediate Ter SPDR Barclays Long Term Treasu SPDR DB International Government Inflation-Protected Bond ETF SPDR DJ Mid Cap ETF SPDR Morgan Stanley Technology SPDR Nuveen Barclays Municipal SPDR Russell Nomura PRIME Japan Fund SPDR S&P Biotech ETF SPDR S&P Emerging Asia Pacific ETF SPDR S&P Emerging Markets ETF SPDR S&P Global Infrastructure SPDR S&P International Energy Sector ETF SPDR S&P International Financial Sector ETF SPDR S&P Metals & Mining ETF SPDR S&P MidCap 400 ETF Trust SPDR S&P World ex-US ETF Schwab Emerging Markets Equity ETF Schwab International Small-Cap Equity ETF Schwab U.S. Large -Cap Growth ETF Schwab U.S. Large -Cap Value ETF Schwab U.S. Large-Cap ETF Schwab U.S. Small-Cap ETF Select Sector SPDR-Materials THE DESCARTES SYS UNISYS VN INT-TR GV BD IDX VN LG-TR GV BD IDX VN SH-TR GV BD IDX Vanguard Consumer Discretionar Vanguard Consumer Staples ETF Vanguard Extended Duration ETF Vanguard FTSE All World ex US Small Cap ETF Vanguard FTSE All-World ex-US ETF Vanguard FTSE Emerging Markets Vanguard FTSE Europe ETF Vanguard FTSE Pacific ETF Vanguard Financials ETF Vanguard Growth ETF Vanguard Health Care ETF Vanguard Index Funds Mid Cap Growth Vanguard Index Funds Mid Cap Value Vanguard Industrials ETF Vanguard Intermediate-Term Bond ETF Vanguard Large-Cap ETF Vanguard Materials ETF Vanguard Mid-Cap ETF Vanguard REIT ETF Vanguard Small-Cap ETF Vanguard Small-Cap Growth ETF Vanguard Small-Cap Value ETF Vanguard Total Bond Market ETF Vanguard Total Stock Market ETF Vanguard Total World Stock ETF Vanguard Value ETF WisdomTree Emerging Markets Eq WisdomTree Trust DIEFA Fund WisdomTree Trust International Basic Materials Sector Fund WisdomTree Trust International Energy Sector Fund WisdomTree Trust International Utilities Sector Fund WisdomTree Trust Japan Total Dividend Fund WisdomTree Trust LargeCap Dividend WisdomTree Trust MidCap Dividend WisdomTree Trust MidCap Earnings Fund WisdomTree Trust WisdomTree SmallCap Dividend iShare Morningstar Large Growth Index Fund iShares Barclays 10-20 Year iShares Barclays 3-7 Year Trea iShares Barclays Intermediate iShares Barclays Lehman 1-3 Year Treasury Bond Fund iShares Barclays Short Treasury Bond Fund iShares Barclays TIPS Bond Fund iShares Core S&P 500 ETF iShares Core S&P Mid-Cap ETF iShares Core S&P Small-Cap ETF iShares Core Total US Bond Fund iShares DJ US Real Estate Index Fund iShares Dow Jones U.S. Financial Sector Index Fund iShares FTSE Small Cap ex-North America Index Fund iShares Inc. Russell 2000 Growth Index Fund iShares Inc. Russell 2000 Value Index Fund iShares Inc. Russell 3000 Growth Index Fund iShares Inc. Russell 3000 Value Index Fund iShares Inc. S&P Europe 350 Index Fund iShares Inc. S&P MidCap 400 Growth Index Fund iShares Inc. S&P MidCap 400 Value Index Fund iShares Inc. S&P SmallCap 600 Growth Index Fund iShares Inc. S&P SmallCap 600 Value Index Fund iShares MSCI Emerging Markets Index Fund iShares MSCI Growth Index Fund iShares MSCI Japan Index Fund iShares MSCI Pacific ex-Japan Index Fund iShares MSCI Value Index Fund iShares Morningstar Large Value Index Fund iShares Morningstar Mid Core Index Fund iShares Morningstar Mid Value Index Fund iShares Morningstar Small Core Index Fund iShares Morningstar Small Growth Index Fund iShares Morningstar Small Value Index Fund iShares Russell 2000 Index Fund iShares Russell 3000 Index Fund iShares S&P 500 Value Index Fund iShares S&P 500/Barra Growth Index Fund iShares S&P GSCI Commodity-Indexed Trust iShares S&P GSSI Natural Resources Sector Index Fund iShares S&P Global 100 Index Fund iShares S&P Global Consumer Discretionary Sector Index Fund iShares S&P Global Consumer Staples Sector Index Fund iShares S&P Global Industrial Sector Index Fund iShares S&P National AMT-Free Municipal Bond Fund iShares S&P/Citigroup International Treasury Bond Fund iShares Trust Barclays 20+ Year Treasury Bond Fund iShares Trust Barclays 7-10 Year Treasury Bond Fund iShares Trust Cohen & Steers Realty Majors Index Fund iShares Trust Dow Jones U.S Industrial Sector Index Fnd iShares Trust Dow Jones U.S. Basic Materials Sector Index Fund iShares Trust Dow Jones U.S. Healthcare Sector Index Fund iShares Trust Dow Jones U.S. Index Fund iShares Trust MSCI EAFE Index Fund iShares Trust Russell MidCap Index Fund iShares Trust Russell MidCap Value Index Fund iShares Trust Russell Midcap Growth Index Fund iShares Trust S&P Global Energy Sector Index Fund iShares Trust S&P Global Healthcare Sector Index Fund iShares Trust S&P Global Telecommunications Sector Index Fund iShares iBoxx $ High Yield Corporate Bond Fund
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