Schwab Preparing To Jump Into The ETF Race
Schwab hopes to gain regulatory approval to introduce its own line of exchange-traded funds by the end of the year. It is clear that Schwab, like all mutual fund providers, is feeling the heat from the growing popularity of exchange-traded funds (ETFs) over the past few years. ETFs’ growing acceptance is not surprising: They not only typically charge lower fees than conventional mutual funds, but provide more flexibility and transparency to investors. They also give holders the ability to better control the taxes they pay on any capital gains they realize.
According to Don Dion, writing for thestreet.com, “Schwab is in a good position to stake out the new ETF territory. While other money managers felt the pullback caused by economic distress, Schwab brought in $113 billion though brokerage services and funds…
…The success of ETF products depends largely on the volume that they are able to drive. Higher volume results in more liquid funds, and customers look to buy ETFs at or near net asset value. Schwab’s corner on the independent advisor market could spell huge success for its ETFs. When it comes to new ETF funds, Schwab will certainly have a captive audience.”
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