Schwab ETFs and Third Party ETFs are selected stringently through strict criteria. This process ensures that the ETFs selected are cost-efficient and diverse. The Robo advisor selects through 2,000 ETFs and chooses the 51 ETFs in the client's portfolios. Here are the criteria used by Schwab Intelligent Portfolios to select the investment ETFs: The Size of the ETFs ETFs without sufficient assets under management are stripped out. These ETFs are often at significant risk of closing, posing a bigger risk to investors. Eschewing Risk Nonstandard ETFs are eliminated from the selection process. These ETFs include those that are leveraged and inverse, the actively managed, those that invest in only one country, and those with less than one month of history. Monitoring Consistency The ETFs on the Schwab Intelligent Portfolios must closely track the indexes since the asset allocation is based on their accuracy. Here the platform measures how accurately the index follows the asset classes represented. Low Operating Expense Ratio (OERs) Schwab Intelligent Portfolios focuses on ETFs with a low operating expense ratio while meeting the tracking, size, and bid-ask spread criteria.