Income with Growth Portfolio by Schwab
The Income with Growth Portfolio by Schwab is a model allocation from Charles Schwab that tilts toward fixed income while maintaining a meaningful equity allocation to provide long-run growth above pure income-oriented portfolios. It sits between Schwab's conservative income models and its balanced portfolio on the risk spectrum, targeting investors who need regular income but also want their portfolio to grow modestly over time. The portfolio uses broad index funds across domestic and international equities and a diversified bond allocation.
Investment Philosophy
Schwab's income-with-growth model reflects the practical reality that many investors — particularly those in or approaching retirement — cannot rely solely on bonds for income without risking that inflation gradually erodes the real value of their savings. By maintaining a meaningful equity allocation alongside a larger fixed-income position, the portfolio aims to balance current income needs against the long-run imperative to preserve purchasing power. The equity component provides the growth engine; the bond allocation provides stability and income.
Who It's For
This portfolio is suited to investors in or near retirement who need to generate income from their portfolio but have a time horizon long enough that some equity exposure remains appropriate. It fits investors with a moderate-to-low risk tolerance who are willing to accept some short-term volatility in exchange for better long-run inflation protection than a pure bond portfolio provides.
Pros
- Income-oriented bond allocation provides regular distributions
- Equity component offers growth potential to counteract inflation over time
- Simple, low-cost index implementation from a well-known provider
Cons
- Lower equity allocation constrains long-run growth for younger investors
- Bond portfolio is exposed to interest rate risk, which can erode capital values when rates rise
- The income generated may be insufficient without accompanying drawdown from the portfolio in low-yield environments
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Target Allocation
Performance Snapshot
Rolling Returns
| Period | Low | Average | High |
|---|---|---|---|
| 1 Year | -15.5% | +5.0% | +23.6% |
| 3 Year | -2.7% | +4.7% | +12.0% |
| 5 Year | +0.5% | +4.6% | +9.5% |
| 10 Year | +2.7% | +4.6% | +6.8% |
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.