BackEnd Benchmarking published the sixth edition of The Robo Report, which assesses the performance of portfolios managed by digital advisers, on Thursday.
For the first time, the report includes full two-year performance return numbers of robo-advisers from seven companies: Betterment, SigFig, Charles Schwab, The Vanguard Group, Personal Capital, WiseBanyan and Acorns.
According to BackEnd Benchmarking's research, Schwab's Intelligent Portfolios had the best equity returns for the combined period of 2016 and 2017 at 38%.
(See more: Getting a handle on robo-advisers' returns)
Ken Schapiro, founder of BackEnd Benchmarking and publisher of The Robo Report, attributed this success to Schwab dedicating 7% of the total portfolio to emerging markets, the second-highest allocation among the seven robos.
SigFig had the largest allocation to emerging markets at 13% and had the second-highest two-year performance with a 37% return. Conversely, Acorns had the second-lowest equity performance of the group with a 32% return for the two years, and allocated just 3% of the portfolio to emerging markets.
For comparison, the Standard & Poor's 500 index over this combined 2016 and 2017 period returned 36% with dividends reinvested, according to Morningstar.
"International stocks in 2017 were driven by positive economic numbers across the globe, and gave rise to the term 'synchronized growth,' helping both emerging and developed market stocks post fantastic returns for the year," Mr. Schapiro wrote in the report.
BackEnd Benchmarking also reported that Schwab and SigFig had the best performing fixed-income portfolios over the last two years as well, returning 14% and 11%, respectively.
To measure digital advisers' performance and compare how funds are invested, BackEnd Benchmarking opens and funds accounts seeking a similar investor profile across each platform. For taxable accounts, the researcher aims for a moderate allocation of roughly 60% stocks and 40% bonds for an investor in a high tax bracket, while IRAs are invested in the most-aggressive allocation possible.
Looking just at the fourth quarter of 2017, Wealthfront posted the best total portfolio returns, followed by TD Ameritrade's Essential Portfolios and SigFig.
BackEnd Benchmarking added portfolio results from digital advisers launched by Zack's Advantage and T. Rowe Price, bringing the total number of robo-advisers studied to 20. The company said its next report will feature data from digital advice portfolios at USAA, Wells Fargo, Morgan Stanley, United Income and Capital One.