Charles Schwab Index Fund Portfolio

Charles Schwab is another household name for stock market investing. They are more known for stock trading than mutual funds investing. BUT, Charles Schwab offers quite a good number of mutual funds and index funds. This may be a competitive response to the big three mutual fund companies.

The good thing about Index funds is that they track an index that remains standard across all similar index funds offered by other companies. There is only slight a variability, known as tracking error, that differs from company to company and depends on efficiency of the fund company to manage fund inflows and outflows. But, for an average investor, Index fund remains fairly seamless to the index it is tracking.

Given this information, if you like Charles Schwab, here are my suggestions for building index funds portfolios using Charles Schwab Index funds.

The percentage numbers are not prescriptive, but merely suggestions. You can tweak these number depending on your goals, age, and risk tolerance profile. Please remember that, even if you divide your asset allocation equally among all your funds, you will still come out ahead simply for getting started. So, don't sweat too much into percentages. Eventually, as you buy and hold your investments for longer timeframes, you can tweak your asset allocation by diverting more or less money.

Portfolio #1: Schwab Simple Three Index Fund Portfolio

If you like simplicity, here is a simple three index fund portfolio. These funds cover the entire gamut of financial markets.

Fund	Aggressive	Moderate	Conservative
Schwab Total Stock Market Index Fund	40%	40%	30%
Schwab International Index Fund	40%	30%	30%
Schwab Total Bond Market Fund	20%	30%	40%

Portfolio #2: Schwab Five Index Fund Portfolio

If you like control over your asset allocation, here is a five index fund portfolio.

Fund	Aggressive	Moderate	Conservative
Schwab Total Stock Market Index Fund	40%	35%	30%
Schwab S&P 500 Index Fund	10%	10%	10%
Schwab Small-Cap Index Fund	10%	10%	10%
Schwab International Index Fund	30%	25%	20%
Schwab Total Bond Market Fund	10%	20%	30%

Portfolio #3: Schwab Six Index Fund Portfolio

If you like to diversify and further control over your asset allocation, here is a six index fund portfolio.

Fund	Aggressive	Moderate	Conservative
Schwab Total Stock Market Index Fund	30%	25%	20%
Schwab S&P 500 Index Fund	10%	15%	10%
Schwab Small-Cap Index Fund	10%	10%	10%
Schwab International Index Fund	30%	20%	20%
Schwab Fundamental Emerging Markets Large Company Index Fund	10%	10%	5%
Schwab Total Bond Market Fund	10%	20%	30%