By ranking over 40 global market indexes, assessed on their expected risk-adjusted returns,1 Windhaven® diversifies investments more than many traditional models, and may offer exposure to a combination of U.S. and international stocks, bonds, real estate, commodities and currencies.
This broad diversification, coupled with a focus on risk management, may help reduce losses during market upheavals while striving to take advantage of long-term growth opportunities.
Windhaven updates its proprietary quantitative model using the latest economic, market, and behavioral data—including inflation, global interest rates, and market prices.
Designed to earn returns in excess of inflation over time, while maintaining a focus on downside risk management. This strategy is structured to benefit from economic prosperity, while striving to manage risk against a variety of potential economic scenarios.
Designed to achieve equity-like returns over full market cycles, but with less risk.2
Designed to take advantage of global capital market investment opportunities while exhibiting less volatility and maximum drawdown than conventional equity portfolios over full market cycles.
Charts are representative of The Windhaven® strategies. Asset classes and the proportional weightings in the portfolios may change at any time without notice, subject to the discretion of Windhaven Investment Management®.
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Talk to a Schwab Investment Professional to see if Windhaven is right for you.
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1. Risk-adjusted return: A concept that refines an investment’s return by measuring how much risk is involved in producing that return, which is generally expressed as a number or rating. Risk-adjusted returns are applied to individual securities, investment funds, and portfolios. There are several important risk measures and each measure is unique in how it measures risk. Windhaven’s approach is a proprietary combination balancing compound annualized return, standard deviation (as measured by the Sharpe Ratio), and Maximum Drawdown collectively at the portfolio level. When comparing two or more potential investments, an investor should compare the same risk measures to each different investment in order to get a relative performance perspective.
2. Risk is measured in terms of maximum drawdown and volatility. Over short periods of time, the Diversified Growth strategy has exhibited risk characteristics similar to those of an all-equity portfolio, but over longer time periods, the maximum drawdown and volatility have been less than those of an all-equity portfolio.
Please refer to Windhaven's ADV Part 2 for more information.
Windhaven's risk-management process includes an effort to monitor and manage risk, but should not be confused with, and does not imply, low risk, or the ability to control risk.
Diversification strategies do not ensure a profit and do not protect against losses in declining markets.
The dynamic allocations can result in more portfolio concentration in a certain asset class or classes, which could reduce overall return if the concentrated assets underperform Windhaven expectations.
There are risks associated with any investment approach, and Windhaven strategies have their own set of risks to be aware of. First, there are the risks associated with the long-term core strategic holdings for each of the strategies. The more aggressive the Windhaven strategy selected, the more likely the strategy will contain larger weights in riskier asset classes, such as equities. Second, there are distinct risks associated with Windhaven strategies' shorter-term dynamic allocations, which can result in more concentration of the portfolios toward a certain asset class or classes. This introduces the risk that Windhaven could be on the wrong side of a tactical over- or underweight, thus resulting in a drag on overall performance.
International investments involve additional risks, which include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.
Windhaven Diversified strategies are available through Schwab's Managed Account Connection™ program. Please read Schwab's disclosure brochure for important information and disclosures relating to Schwab Managed Account Connection and Schwab Managed Account Services™.
Portfolio management is provided by Windhaven Investment Management, Inc. ("Windhaven"), a registered investment advisor. Windhaven and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.