Commentary March 21, 2022 at 07:44 AM Share & Print
What You Need to Know
- Schwab’s new thematic stock lists are designed to help self-directed investors pick stocks aligned with their interests and values.
- The new Schwab offering adds greater personalization to clients at a time when investors increasingly demand such options.
- Schwab plans to offer added personalized experiences to clients in the future.
Charles Schwab has introduced thematic stock lists, a new resource that it said is designed to help self-directed investors looking to invest in stocks aligned with their interests and values.
The new Schwab offering adds greater personalization to clients at a time when investors increasingly demand such options, according to the company.
“There are significant opportunities for growth in the RIA sector, as long as advisors continue to not only offer value through personalization to their clients but also step up their personalization efforts,” Schwab CEO Walt Bettinger said in the fall.
“Personalized investing is coming at all of us like a freight train,” he said in the opening session of his company’s second straight all-virtual Schwab Impact conference.
“Technology is bringing the opportunity for personalization to everyone: to large investors, to medium investors, small investors and the whole range of RIAs also,” he explained at the time.
Using Schwab’s thematic stock lists, which it called one of the largest theme-based stock list resources available in the sector, clients can “easily view potential investments from a list of 45 different thematic categories and approximately 900 total companies representing a range of trends including data advancement, medical breakthroughs, and environmental innovation,” it said in a news release.
Schwab’s thematic stock lists are available to clients for no additional fee at Schwab.com and on Schwab’s mobile app.
“Individual investors are broadening how they think about investing,” according to Divya Krishnan, Schwab product management director. “Nearly a third of our clients today tell us they’re interested in customizing their portfolio to align with themes that are important to them,” she said in a statement.
“Whether it’s an area that speaks to someone’s individual values, or it’s something they have a deep passion for — like space or pets — investors increasingly want the ability to personalize their portfolios,” she added.
Her prediction is that “this investing approach will continue to grow in importance moving forward,” she said. “This introduction is another step in Schwab’s continued plans to deliver additional personalized experiences to clients with more to come in the future.”
Although most thematic stock lists rely on third-party research sources, Schwab’s thematic stock lists are built using a sophisticated proprietary algorithm, according to the company.
Its algorithm uses natural language processing to “mine terabytes of data and millions of public documents, such as patent grants, clinical trials, and regulatory filings to objectively identify publicly traded companies based on their relevance to a particular investment theme,” Schwab said.
The algorithm is able to quickly “ingest thousands of pages of text and quantify thematic relevance for companies — a task that might take an investor multiple days to accomplish on their own,” according to the company.
Schwab’s “Robotic Revolution” thematic stock list includes companies from across different sectors, including industrials, health care and information technology, that the company said are building and using robotic solutions for manufacturing, logistics and medical services.
Other available themes include blockchain, cybersecurity, genomics, online gaming, renewable energy and social networking, Schwab said.
All of Schwab’s thematic stock lists are available on its new online thematic investing hub.
Schwab has also published a white paper that provides more in-depth information about its thematic research approach.