Balanced Portfolio by Schwab
The Balanced Portfolio by Schwab is one of several model portfolios published by Charles Schwab as part of its Schwab Intelligent Portfolios and general investment guidance offerings. It targets a roughly equal split between equities and fixed income, providing a middle-ground approach for investors who want growth exposure without committing fully to stocks. The portfolio uses broad index funds across domestic and international asset classes.
Investment Philosophy
Schwab's balanced model is grounded in modern portfolio theory: diversification across asset classes reduces volatility without proportionally sacrificing return. The roughly even equity-to-bond weighting is designed to smooth out the ride during equity market downturns while still participating meaningfully in long-term growth. It reflects the conventional wisdom that a mix of stocks and bonds is appropriate for investors with intermediate time horizons who cannot stomach the full volatility of an all-equity portfolio.
Who It's For
This portfolio suits investors with a medium risk tolerance who have a time horizon of roughly five to fifteen years and want a simple, low-cost solution without active management. It is appropriate for someone saving toward a medium-term goal, such as retirement in a decade or a significant future expense.
Pros
- Simple, broadly diversified structure that is easy to implement and maintain
- Low-cost index fund approach keeps fees minimal
- Balanced equity-bond split provides meaningful downside cushion relative to an all-equity portfolio
Cons
- The equal stock-bond split may be too conservative for younger investors with long time horizons
- Bond allocation introduces interest rate risk that can hurt nominal returns in rising-rate environments
- Limited factor exposure means it captures only market beta, leaving potential risk-adjusted returns on the table
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Target Allocation
Performance Snapshot
Rolling Returns
| Period | Low | Average | High |
|---|---|---|---|
| 1 Year | -22.9% | +6.6% | +28.5% |
| 3 Year | -3.8% | +6.0% | +14.6% |
| 5 Year | +0.9% | +5.9% | +12.0% |
| 10 Year | +3.5% | +5.8% | +8.9% |
Growth of $10,000
Historical Drawdown
Percentage decline from the portfolio's peak value at each point in time.
Rolling Returns
Annualised return for each rolling period ending on that date.
Annualised return for each 1Y period ending on that date.