Model portfolios continue to be a major beneficiary of current volatility and uncertainty as evidenced by Charles Schwab seeing $4.6 billion in inflows to its bond ETF according to an article by Bloomberg’s Carly Wanna.

These inflows are being attributed to adjustments made by a model portfolio and are offered by many large asset managers. Currently, there is no firm estimate on the size of the model portfolio industry, but manu speculate that trillions are managed through them. And, they are offered by the largest asset managers including Vanguard and Blackrock. 

But, the best indication of their size and influence is the massive inflows and outflows from ETFs which tends to happen at the beginning or end of quarters. Additionally, it’s easy to match the inflows and outflows from various ETFs. In this case, the model portfolio seems to be reaching for increased yield as it moves out of Treasuries and into lower-rated corporate debt. 

Overall, model portfolios are booming due to the strategy providing the benefits of active management with lower costs and increased transparency.

Finsum: Model portfolios are having an impact on Wall Street as evidenced by the huge inflows into Schwab’s bond ETF.