Portfolio construction
Picture a framework for portfolio construction that empowers clients to stick with a plan across ever-changing market conditions. With combinations of low-cost passive, strategic beta, and actively managed strategies, our building block approach adapts to fit a range of client goals, objectives, risk tolerances, and circumstances.
A flexible, cost-efficient asset allocation framework
Our ABC asset allocation framework can help you implement personalized portfolio solutions that are easy to explain to your clients and centered around your desired time and comfort level with managing investments.
Three straightforward approaches
Allocates across core asset classes
Strategic asset allocation using traditional market cap-weighted exposures for a diversified low-cost core portfolio designed to meet either total return or income objectives.
Incorporates strategic beta, style, and sub-asset class allocations
Enhances opportunity set by adding strategic beta, value, growth, and other expanded allocation exposures.
Captures active management opportunities
Integrates actively managed exposures to provide additional diversification, and/or meet customized client needs.
Choose your desired level of involvement and complexity
This ABC framework can help deliver a diversified, low-cost core allocation and add degrees of portfolio complexity when it makes sense—all in an easy and scalable way.
Illustrative efficient frontier. Underlying investments under A (market cap), B (styles and strategic beta) are assumed to be represented by low-cost ETFs or mutual funds, and investments under C (active) are assumed to be represented by actively managed funds with relatively higher operating expenses.
Select the approach to suit your clients' goals
Use the ABC allocation framework to meet your clients where they are. We offer approaches designed to pursue different goals: total return and income. And both approaches can adapt to clients' specific risk appetites.
Three ways to leverage our asset allocation framework
Implement on your own
Use our framework and allocations to implement in your own portfolio management system.
Schwab Target Index Funds
Invest in Schwab Target Index Funds for an asset allocation solution using similar asset class exposure as our A total return allocations.
We’re here to help you design portfolios for lasting client relationships
To learn more about our ABC asset allocation framework and how you can implement it in your practice, contact your Charles Schwab Investment Management representative.
Insights on portfolio construction
Appreciating simplicity in portfolio construction
Our straightforward building block framework utilizes a behaviorally based approach to encourage positive investor behavior and help clients stay the course.
Fundamentally weighted index strategies: A primer on asset allocation in three core asset classes
Combining fundamentally weighted strategies with cap-weighted strategies may improve a portfolio's risk-return characteristics.
Positioning client portfolios for a potential market change
It’s an important time for advisors to consider whether client portfolios are positioned for a potential market cycle change where value and international stocks may take over performance leadership from growth and domestic equities.