Schwab ETF Logs $4.6 Billion Inflow Amid Quarter-End Shuffle

Wall Street’s model-portfolio boom appears to have flashed its invisible power for the second time in this week after a once-sleepy Charles Schwab Corp. bond exchange-traded fund received another monster inflow.

About $2.6 billion entered the Schwab 5-10 Year Corporate Bond ETF (ticker SCHI) on Thursday, according to data compiled by Bloomberg, adding to the nearly $2 billion that flowed into the fund on Monday. Assets in the ETF have surged more than ten-fold from the end of last week, racking up the largest inflows among US ETFs tracked by Bloomberg over that period.

While it’s often difficult to determine precisely who is behind a fund flow, such large additions suggest the adjustment of a model portfolio. These products are essentially off-the-shelf investment strategies, usually comprising a set of ETFs, which are offered by large asset managers direct to their investors.

Falling fund management costs, improving technology and a new era of retail investing have combined to see their popularity explode in recent years.

Schwab did not comment on the Thursday inflow except to say the firm periodically reviews and updates “the asset allocations and ETF selections across our packaged solutions.” The firm has been under pressure this month as scrutiny of the US banking sector battered the brokerage.

It’s hard to gauge the exact size of the model portfolio industry on Wall Street because many money managers don’t publish figures, but it’s thought they now command trillions of dollars of assets.