Top Tier ETF Provider Playoffs
10/19/2010 0 comments
In this article we are going to compare Schwab and TD Ameritrade.
Schwab (Ticker SCHW) is a relative late comer to the ETF party. They offer the fewest ETF’s and the ETF’s have the shortest history. They only provide their own ETF's commission free. However, Schwab has a huge network and powerful brand so we expect Schwab to be a significant player in the market.
Schwab ETF
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NEW Bond ETFs
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Schwab U.S. TIPS ETF™
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Schwab Short-Term U.S. Treasury ETF™
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Schwab Intermediate-Term U.S. Treasury ETF™
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Domestic Equity ETFs
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Schwab U.S. Broad Market ETF™
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Schwab U.S. Large-Cap ETF™
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Schwab U.S. Large-Cap Growth ETF™
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Schwab U.S. Large-Cap Value ETF™
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Schwab U.S. Small-Cap ETF™
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International Equity ETFs
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Schwab International Equity ETF™
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Schwab International Small-Cap Equity ETF™
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Schwab Emerging Markets Equity ETF™
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Asset Class | Ticker | Name |
---|---|---|
LARGE VALUE | SCHV | Schwab U.S. Large-Cap Value ETF |
LARGE BLEND | SCHX | Schwab U.S. Large-Cap ETF |
LARGE BLEND | SCHB | Schwab U.S. Broad Market ETF |
LARGE GROWTH | SCHG | Schwab U.S. Large-Cap Growth ETF |
LARGE GROWTH | IWF | iShares Russell 1000 Growth Index |
SMALL VALUE | IJS | iShares S&P SmallCap 600 Value Index |
SMALL BLEND | SCHA | Schwab U.S. Small-Cap ETF |
Small Growth | IJT | iShares S&P SmallCap 600 Growth |
Foreign Large Blend | SCHF | Schwab International Equity ETF |
FOREIGN SMALL/MID GROWTH | SCHC | Schwab International Small-Cap Eq ETF |
DIVERSIFIED EMERGING MKTS | SCHE | Schwab Emerging Markets Equity ETF |
Inflation-Protected Bond | TIP | iShares Barclays TIPS Bond |
Intermediate Government | IEI | iShares Barclays 3-7 Year Treasury Bond |
SHORT GOVERNMENT | SHY | iShares Barclays 1-3 Year Treasury Bond |
Inflation-Protected Bond | SCHP | Schwab U.S. TIPS ETF |
SHORT GOVERNMENT | SCHO | Schwab Short-Term U.S. Treasury ETF |
Intermediate Government | SCHR | Schwab Intermediate-Term U.S. Trsy ETF |
LARGE VALUE | VTV | Vanguard Value Index |
LARGE BLEND | VTI | Vanguard Total Stock Market ETF |
LARGE VALUE | VTV | Vanguard Value ETF |
DIVERSIFIED EMERGING MKTS | VWO | Vanguard Emerging Markets Stock ETF |
Foreign Small/Mid Value | SCZ | iShares MSCI EAFE Small Cap Index |
Foreign Large Blend | EFA | iShares MSCI EAFE Index |
As of Oct 15, 2010, the Schwab ETF investment choice is rated asaverage 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 below average (19%)
Fund Quality -- Rated as average (59%)
Portfolio Building -- Rated as average (41%)
Overall Rating: average (40%)
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies ( SAA and TAA , both provided by MyPlanIQ).
For comparison purpose, we also include the moderate model portfolios of a typical five asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:
Foreign Equity:( EFA or VEU )
Emerging Market Equity:( EEM or VWO )
US Equity:( SPY or VTI )
Performance chart (as of Oct 15, 2010)
Portfolio Name
|
1Yr AR
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1Yr Sharpe
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3Yr AR
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3Yr Sharpe
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5Yr AR
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5Yr Sharpe
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2%
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17%
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6%
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44%
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14%
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88%
|
|
1%
|
10%
|
5%
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38%
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12%
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88%
|
|
10%
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71%
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1%
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2%
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9%
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40%
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|
10%
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76%
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1%
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4%
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8%
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37%
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The Schwab Funds perform adequately against the SIB’s.
This is an almost ideal platform for retirement investing with a 30 day redemption period. With a web based application to monitor all of the funds in the plan, it should be possible to put together a very solid portfolio and deliver excellent results.
These funds provide exposure to 6 major assets: Emerging Market Equity , Foreign Equity , Fixed Income , US Equity , Commodity , Real estate.
The list of minor asset classes covered:
Conservative Allocation: AOK
DIVERSIFIED EMERGING MKTS: EEM , GMM , PXH , DEM , SCHE
Emerging Markets Bond: PCY
EQUITY: VTI,VT
EUROPE STOCK: IEV , VGK , PEF , DEB
Foreign Large Blend: EFA , VEU , GWL , PFA
Foreign Large Growth: EFG
Foreign Large Value: EFV , PID , DWM
FOREIGN SMALL/MID GROWTH: IFSM , VSS , SCHC
Foreign Small/Mid Value: SCZ
Global Real Estate: IFGL , RWX
High Yield Bond: HYG , JNK , PHB
Inflation-Protected Bond: TIP
Intermediate Government: IEI , VGIT , ITE
Intermediate-Term Bond: AGG,CIU , BIV,BND
JAPAN STOCK: EWJ , JPP , PJO , DXJ
LARGE BLEND: IVV,IYY,IWV , VTI,VV , SPY , DLN , RSP , SCHX
LARGE GROWTH: IVW,IWZ,JKE , VUG , ELG , QQQQ , RPG , SCHG
LARGE VALUE: IVE,IWW,JKF , VTV , ELV , PWV , RPV , SCHV
Latin America Stock: ILF , GML
LONG GOVERNMENT: TLT,TLH,IEF , EDV,VGLT , TLO , PLW
Long-Term Bond: CLY,LQD , BLV,VCLT
MID-CAP BLEND: IJH,IWR,JKG , VO , MDY,EMM , PJG , DON,EZM , MVV
Mid-Cap Growth: IJK,IWP , VOT , EMG , PWJ , RFG , UKW
MID-CAP VALUE: IJJ,IWS,JKI , VOE , EMV , PWP , RFV , UVU
Moderate Allocation: AOM
Multisector Bond: AGG,GBF , BND , LAG
Muni National Interm: ITM
Muni National Long: MUB , TFI , PZA , MLN
Muni National Short: SUB , SHM , PVI , SMB
PACIFIC/ASIA EX-JAPAN STK: EPP,AAXJ , GMF , PAF , DND
REAL ESTATE: IYR,ICF , VNQ
SHORT GOVERNMENT: SHY,SHV , VGSH , PLK , USY
Short-Term Bond: CSJ , BSV,VCSH
SMALL BLEND: IJR,IWM,JKJ , VB , DSC , PJM , DES , SAA,UWM , SCHA
Small Growth: IJT,IWO,JKK , VBK , DSG , PWT , RZG , UKK
SMALL VALUE: IJS,IWN,JKL , VBR , DSV , PWY , RZV , UVT
SPECIALTY-REAL ESTATE: RWR , PSR , URE
World Allocation: AOR , AOA
WORLD BOND: IGOV , BWX,WIP
WORLD STOCK: IOO , VT
Diversification -- Rated as great (97%)
Fund Quality -- Rated as below average (28%)
Portfolio Building -- Rated as great (90%)
Overall Rating: above average (73%)
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies ( SAA and TAA , both provided by MyPlanIQ).
For comparison purpose, we also include the moderate model portfolios of a typical five asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:
REITs:( IYR or VNQ or ICF )
Fixed Income:( AGG or BND )
Commodity:(DBC)
Foreign Equity:( EFA or VEU )
Emerging Market Equity:( EEM or VWO )
US Equity:( SPY or VTI )
Performance chart (as of Oct 15, 2010)
Portfolio Name
|
1Yr AR
|
1Yr Sharpe
|
3Yr AR
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3Yr Sharpe
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5Yr AR
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5Yr Sharpe
|
13%
|
87%
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13%
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86%
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20%
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128%
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|
10%
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83%
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-1%
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-6%
|
9%
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46%
|
|
10%
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65%
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9%
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66%
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17%
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114%
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|
11%
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84%
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2%
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9%
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9%
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42%
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Currently, asset classes in REITs( IYR , VNQ , ICF ) , Fixed Income( AGG , BND ) and Emerging Market Equity( EEM , VWO ) are doing relatively well. These asset classes are available to TD Ameritrade Commission Free ETFs participants.
Portfolio Name
|
1Yr AR
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1Yr Sharpe
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3Yr AR
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3Yr Sharpe
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5Yr AR
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5Yr Sharpe
|
13%
|
87%
|
13%
|
86%
|
20%
|
128%
|
|
1%
|
10%
|
5%
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38%
|
12%
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88%
|
|
10%
|
83%
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-1%
|
-6%
|
9%
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46%
|
|
10%
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71%
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1%
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2%
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9%
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40%
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TD Ameritrade's two key advantages are:
labels:investment,
Symbols:SUB,SHM,PVI,SMB,EPP,AAXJ,GMF,PAF,DND,SHY,SHV,VGSH,PLK,USY,CSJ,BSV,VCSH,AOR,AOA,IGOV,BWX,WIP,IOO,VT,RWR,PSR,URE,IJS,IWN,JKL,VBR,DSV,PWY,RZV,UVT,IJT,IWO,JKK,VBK,DSG,PWT,RZG,UKK,IJR,IWM,JKJ,VB,DSC,PJM,DES,SAA,UWM,SCHA,ITM,MUB,TFI,PZA,MLN,AGG,GBF,BND,LAG,IJJ,ETFs,Portfolio,Building,Asset,Allocation,Commission,Free,
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