April 06, 2011 at 13:23 PM EDT
Schwab Select ETF Plan Has Bright Prospects
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)  
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DEBENHAMS DEVELOPMENT SECS ENCRES DUBUIT EUROMEDIS GROUPE GUGGENHEIM S&P 500 EQUAL WEIGHT CONSUMER STAPLES ETF GUGGENHEIM S&P 500 EQUAL WEIGHT ENERGY ETF GUGGENHEIM S&P 500 EQUAL WEIGHT ETF GUGGENHEIM S&P 500 EQUAL WEIGHT FINANCIALS ETF GUGGENHEIM S&P 500 EQUAL WEIGHT HEALTHCARE ETF GUGGENHEIM S&P 500 EQUAL WEIGHT MATERIALS ETF GUGGENHEIM S&P 500 EQUAL WEIGHT TECHNOLOGY ETF GUGGENHEIM S&P 500 EQUAL WEIGHT UTILITIES ETF GUGGENHEIM S&P 500 PURE GROWTH ETF GUGGENHEIM S&P 500 PURE VALUE ETF GUGGENHEIM S&P MIDCAP 400 PURE GROWTH ETF GUGGENHEIM S&P MIDCAP 400 PURE VALUE ETF GUGGENHEIM S&P SMALLCAP 600 PURE GROWTH ETF GUGGENHEIM S&P SMALLCAP 600 PURE VALUE ETF ISH DEV SM CP ISH INTL TRS BD ISHARES 1-3 YEAR TREASURY BOND ETF ISHARES 10-20 YEAR TREASURY BOND ETF ISHARES 20+ YEAR TREASURY BOND ETF ISHARES 3-7 YEAR TREASURY BOND ETF ISHARES 7-10 YEAR TREASURY BOND ETF ISHARES COHEN & STEERS REIT ETF ISHARES CORE S&P 500 ETF ISHARES CORE S&P MID-CAP ETF ISHARES CORE S&P SMALL-CAP ETF ISHARES CORE TOTAL U.S. BOND MARKET ETF ISHARES DOW JONES U.S. ETF ISHARES EUROPE ETF ISHARES GLOBAL 100 ETF ISHARES GLOBAL CONSUMER DISCRETIONARY ETF ISHARES GLOBAL CONSUMER STAPLES ETF ISHARES GLOBAL ENERGY ETF ISHARES GLOBAL HEALTHCARE ETF ISHARES GLOBAL INDUSTRIALS ETF ISHARES GLOBAL TELECOM ETF ISHARES IBOXX $ HIGH YIELD CORPORATE BOND ETF ISHARES INTERMEDIATE CREDIT BOND ETF ISHARES MORNINGSTAR LARGE-CAP GROWTH ETF ISHARES MORNINGSTAR LARGE-CAP VALUE ETF ISHARES MORNINGSTAR MID-CAP ETF ISHARES MORNINGSTAR MID-CAP VALUE ETF ISHARES MORNINGSTAR SMALL-CAP ETF ISHARES MORNINGSTAR SMALL-CAP GROWTH ETF ISHARES MORNINGSTAR SMALL-CAP VALUE ETF ISHARES MSCI EAFE ETF ISHARES MSCI EAFE GROWTH ETF ISHARES MSCI EAFE VALUE ETF ISHARES MSCI EMERGING MARKETS ETF ISHARES MSCI JAPAN ETF ISHARES MSCI PACIFIC EX JAPAN ETF ISHARES NATIONAL AMT-FREE MUNI BOND ETF ISHARES NORTH AMERICAN NATURAL RESOURCES ETF ISHARES RUSSELL 2000 ETF ISHARES RUSSELL 2000 GROWTH ETF ISHARES RUSSELL 2000 VALUE ETF ISHARES RUSSELL 3000 ETF ISHARES RUSSELL 3000 GROWTH ETF ISHARES RUSSELL 3000 VALUE ETF ISHARES RUSSELL MID-CAP ETF ISHARES RUSSELL MID-CAP GROWTH ETF ISHARES RUSSELL MID-CAP VALUE ETF ISHARES S&P GSCI COMMODITY-INDEXED TRUST ISHARES S&P 500 GROWTH ETF ISHARES S&P 500 VALUE ETF ISHARES S&P MID-CAP 400 GROWTH ETF ISHARES S&P MID-CAP 400 VALUE ETF ISHARES S&P SMALL-CAP 600 GROWTH ETF ISHARES S&P SMALL-CAP 600 VALUE ETF ISHARES SHORT TREASURY BOND ETF ISHARES TIPS BOND ETF ISHARES U.S. BASIC MATERIALS ETF ISHARES U.S. FINANCIALS ETF ISHARES U.S. HEALTHCARE ETF ISHARES U.S. INDUSTRIALS ETF ISHARES U.S. REAL ESTATE ETF MARKET VECTORS- LONG MUNICIPAL INDEX ETF MATERIALS SELECT SECTOR FD PIONEERING TECH POWERSHARES 1-30 LADDERED TREASURY PORTFOLIO POWERSHARES DB COMMODITY INDEX TRACKING FUND POWERSHARES DWA BASIC MATERIALS MOMENTUM PORTFOLIO POWERSHARES DWA CONSUMER STAPLES MOMENTUM PORTFOLIO POWERSHARES DWA FINANCIAL MOMENTUM PORTFOLIO POWERSHARES DWA TECHNOLOGY MOMENTUM PORTFOLIO POWERSHARES DWA UTILITIES MOMENTUM PORTFOLIO POWERSHARES DYNAMIC BIOTECHNOLOGY & GENOME PORTFOLIO POWERSHARES DYNAMIC LARGE CAP VALUE PORTFOLIO POWERSHARES FTSE RAFI ASIA PACIFIC EX-JAPAN PORTFOLIO POWERSHARES FTSE RAFI EMERGING MARKETS PORTFOLIO POWERSHARES FUNDAMENTAL HIGH YIELD CORPORATE BOND PORTFOLIO POWERSHARES FUNDAMENTAL PURE MID CORE PORTFOLIO POWERSHARES FUNDAMENTAL PURE MID GROWTH PORTFOLIO POWERSHARES FUNDAMENTAL PURE MID VALUE PORTFOLIO POWERSHARES FUNDAMENTAL PURE SMALL CORE PORTFOLIO POWERSHARES FUNDAMENTAL PURE SMALL GROWTH PORTFOLIO POWERSHARES FUNDAMENTAL PURE SMALL VALUE PORTFOLIO POWERSHARES INSURED NATIONAL MUNICIPAL BOND PORTFOLIO POWERSHARES INTERNATIONAL DIVIDEND ACHIEVERS PORTFOLIO POWERSHARES S&P INTERNATIONAL DEVELOPED HIGH QUALITY PORTFOLIO PROSHARES ULTA SMALLCAP600 PROSHARES ULTRA BASIC MATERIALS PROSHARES ULTRA MIDCAP400 PROSHARES ULTRA RUSSELL 2000 VALUE PROSHARES ULTRA RUSSELL MIDCAP GROWTH PROSHARES ULTRA RUSSELL MIDCAP GROWTH PROSHARES ULTRA RUSSELL MIDCAP VALUE PROSHARES ULTRA RUSSELL2000 PROSHARES ULTRA TECHNOLOGY PROSHARES ULTRA TELECOMMUNICATIONS PROSHARES ULTRA UTILITIES PowerShares DB Energy Fund S&P DEP RECEIPTS SCHWAB EMERGING MARKETS EQUITY ETF SCHWAB INTERNATIONAL SMALL-CAP EQUITY ETF SCHWAB U.S SMALL- CAP ETF SCHWAB U.S. LARGE- CAP ETF SCHWAB U.S. LARGE-CAP GROWTH ETF SCHWAB U.S. LARGE-CAP VALUE ETF SPDR BARCLAYS HIGH YIELD BOND ETF SPDR BARCLAYS INTERMEDIATE TERM TREASUURE ETF SPDR BARCLAYS INTERNATIONAL TREASURY BOND ETF SPDR BARCLAYS LONG TERM TREASURY ETF SPDR DB INTERNATIONAL GOVT INFLATION-PROTECTED BOND SPDR MORGAN STANLEY TECHNOLOGY ETF SPDR NUVEEN BARCLAYS MUNICIPAL BOND ETF SPDR RUSSELL SMALL CAP COMPLETENESS ETF SPDR RUSSELL/NOMURA PRIME JAPAN ETF SPDR S&P INTERNATIONAL FINANCIAL SECTOR SPDR S&P BIOTECH ETF SPDR S&P EMERGING ASIA PACIFIC ETF SPDR S&P EMERGING MARKETS ETF SPDR S&P GLOBAL INFRASTRUCTURE ETF SPDR S&P INTERNATIONAL ENERGY SECTOR SPDR S&P METALS & MINING ETF SPDR S&P MIDCAP 400 ETF TRUST SPDR S&P WORLD EX-US ETF THE DESCARTES SYS UNISYS VANGUARD CONSUMER DISCRETIONARY ETF VANGUARD CONSUMER STAPLES ETF VANGUARD FINANCIALS ETF VANGUARD FTSE ALL-WORLD EX-US ETF VANGUARD FTSE ALL-WORLD EX-US SMALL-CAP INDEX FUND VANGUARD FTSE EMERGING MARKETS ETF VANGUARD FTSE EUROPE ETF VANGUARD FTSE PACIFIC ETF VANGUARD GROWTH ETF VANGUARD HEALTH CARE ETF VANGUARD INDUSTRIALS ETF VANGUARD INTERMEDIATE-TERM BOND ETF VANGUARD LARGE-CAP ETF VANGUARD MATERIALS ETF VANGUARD MID-CAP ETF VANGUARD MID-CAP GROWTH ETF VANGUARD MID-CAP VALUE ETF VANGUARD REIT ETF VANGUARD SMALL-CAP ETF VANGUARD SMALL-CAP GROWTH ETF VANGUARD SMALL-CAP VALUE ETF VANGUARD TOTAL BOND MARKET VANGUARD TOTAL STOCK MARKET ETF VANGUARD TOTAL WORLD STOCK ETF VANGUARD VALUE ETF VANGUARD WORLD FUNDS EXTENDED DURATION ETF VN INT-TR GV BD IDX VN LG-TR GV BD IDX VN SH-TR GV BD IDX WISDOMTREE COMMODITY COUNTRY EQUITY FUND WISDOMTREE DEFA FUND WISDOMTREE EMERGING MARKETS EQUITY INCOME FUND WISDOMTREE GLOBAL EX-US UTILITY FUND WISDOMTREE GLOBAL NATURAL RESOURCES FUND WISDOMTREE JAPAN HEDGED EQUITY FUND WISDOMTREE LARGECAP DIVIDEND FUND WISDOMTREE MIDCAP DIVIDEND FUND WISDOMTREE MIDCAP EARNINGS FUND WISDOMTREE SMALLCAP DIVIDEND FUND
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