: eight new Schwab-managed ETFs with low operating expense ratios and commission-free online trading for clients in their Schwab accounts.
“Schwab has been an innovator on behalf of investors and savers for decades and has endeavored to help them become financially fit. Today, we continue this tradition by offering investors an exceptional value through low cost access to domestic and global equity markets,” said Walt Bettinger, Schwab Chief Executive Officer. “Our low cost ETFs can be purchased and sold through Schwab.com commission free. This means that investors of all kinds, and especially those who wish to dollar cost average modest sums, can do so in a cost-effective way. We believe there simply isn’t an easier way to buy and sell ETFs than what we’re making available to all Schwab clients.”
Starting November 3, Charles Schwab Investment Management, Inc. (CSIM) will launch its first four ETFs – Schwab U.S. Broad Market ETFTM, Schwab U.S. Large-Cap ETF TM Schwab U.S. Small-Cap ETFTM and Schwab International Equity ETFTM. In December, CSIM will offer four additional ETFs – Schwab U.S. Large-Cap Growth ETFTM, Schwab U.S. Large-Cap Value ETFTM, Schwab International Small-Cap Equity ETFTM and Schwab Emerging Markets Equity ETFTM.
The new Schwab exchange traded funds have some of the lowest operating expense ratios on the market and can be bought and sold without commissions in Schwab accounts if purchased online, regardless of the number of shares traded. They are designed to be core holdings in a diversified portfolio and can be purchased in blocks as small as one share per trade.
|Schwab ETF Name||Schwab OER||Vanguard OER||BGI OER||SSGA OER|
|Schwab U.S. Broad Market ETF||SCHB 0.08%||VTI 0.09%||IWV 0.21%||TMW 0.20%|
|Schwab U.S. Large-Cap ETF||SCHX 0.08%||VV 0.13%||IVV 0.09%||SPY 0.09%|
|Schwab U.S. Large-Cap Growth ETF||SCHG 0.15%||VUG 0.15%||IVW 0.18%||ELG 0.20%|
|Schwab U.S. Large-Cap Value ETF||SCHV 0.15%||VTV 0.15%||IVE 0.18%||ELV 0.20%|
|Schwab U.S. Small-Cap ETF||SCHA 0.15%||VB 0.15%||IJR 0.20%||DSC 0.25%|
|Schwab International Equity ETF||SCHF 0.15%||VEA 0.16%||EFA 0.34%||CWI 0.34%|
|Schwab International Small-Cap Equity ETF||SCHC 0.35%||VSS 0.38%||SCZ 0.40%||GWX 0.59%|
|Schwab Emerging Markets Equity ETF||SCHE 0.35%||VWO 0.27%||EEM 0.72%||GMM 0.59%|
Source: Expense Ratios from most recent prospectus filings as of 9/30/09.
Commission-free online trading of Schwab ETFs will be available to individual investors at Schwab, to the more than 6,000 independent investment advisor firms who use Schwab’s custodial services through Schwab Advisor Services and through Schwab retirement accounts that permit trading of ETFs. The Schwab ETFs will be listed on NYSE Arca, and can also be traded on other exchanges.
“Investors were first attracted to ETFs in the 1990s because they provided a liquid, low-cost and more tax-efficient way to invest in and trade entire segments of the market,” said Peter Crawford, senior vice president at Schwab. “These ETFs will accelerate that growth and appeal to a broad range of investors: from registered investment advisors, to individual investors. Only 16% of our individual investors currently own ETFs and 43% of advisors who custody with Schwab told us this summer in our semi-annual Advisor Outlook Study, that they plan to increase their usage of ETFs in the next six months. This makes them vehicles with tremendous potential for growth.”
Representing an additional step in the firm’s ongoing commitment to value in index investing, today’s ETF announcement follows changes Schwab made on May 5, 2009 when the firm reduced expense ratios and lowered investment minimums on its equity index mutual funds.
Schwab Exchange Traded Fund Line-up and Launch Date
11/3 ETF Introduction
|Schwab U.S. Broad Market ETF||SCHB||Dow Jones U.S. Broad Stock Market IndexSM||.08%||Large Blend|
|Schwab U.S. Large-Cap ETF||SCHX||Dow Jones U.S. Large-Cap Total Stock Market IndexSM||.08%||Large Blend|
|Schwab U.S. Small-Cap ETF||SCHA||Dow Jones U.S. Small-Cap Total Stock Market IndexSM||.15%||Small Blend|
|Schwab International Equity ETF||SCHF||FTSE Developed ex-US Index||.15%||Foreign Large Blend|
|Schwab U.S. Large-Cap Growth ETF||SCHG||Dow Jones U.S. Large-Cap Growth Total Stock Market IndexSM||.15%||Large Growth|
|Schwab U.S. Large-Cap Value ETF||SCHV||Dow Jones U.S. Large-Cap Value Total Stock Market IndexSM||.15%||Large Value|
|Schwab International Small-Cap Equity ETF||SCHC||FTSE Developed Small Cap ex-US Liquid Index||.35%||Foreign Small/Mid Cap|
|Schwab Emerging Markets Equity ETF||SCHE||FTSE All-Emerging Index||.35%||Diversified Emerging Markets|
About Charles Schwab Investment Management
Founded in 1989, Charles Schwab Investment Management, Inc., a subsidiary of The Charles Schwab Corporation, is one of the nation’s largest asset management companies with more than $210 billion in assets under management as of September 30, 2009. It is among the country’s largest money market fund managers and is the third-largest provider of retail index funds. In addition to managing Schwab Funds, CSIM is investment adviser for the institutional-style, sub-advised Laudus Fund family. CSIM currently manages 79 mutual funds, including 36 actively-managed funds, and six separate account model portfolios.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 667,000 banking accounts, and $1.36 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Named Highest in Investor Satisfaction by J.D. Power and Associates, its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 1-800-435-4000. Please read the prospectus carefully before investing.
Exchange Traded Funds are subject to risks similar to those of stocks. Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Diversification may not protect against investment loss.
Schwab ETFs distributed by SEI Investments Distribution Co (SIDCO). SIDCO is not affiliated with Charles Schwab & Co., Inc. Schwab ETFs are managed by Charles Schwab Investment Management, Inc. (CSIM). SIDCO is not affiliated with CSIM. (2009-4808)
Online trades of Schwab ETFs are commission-free at Schwab, while trades of third-party ETFs are subject to commissions. Broker-Assisted and Automated Phone trades of Schwab ETFs are subject to service charges. Direct Access trades are subject to commissions of $.003 for each share over the first 5,000. Minimum $1,000 deposit is required to open most Schwab brokerage accounts. Waivers may apply. See the Charles Schwab Pricing Guide for details. All ETFs are subject to management fees and expenses.
“Dow Jones,” and the names identifying the Dow Jones Indexes underlying Schwab’s Domestic ETFs are trademarks of Dow Jones & Company, Inc. The Dow Jones Total Stock Market Indexes are calculated by Dow Jones Indexes and have been licensed for use for certain purposes by Charles Schwab Investment Management, Inc. “FTSE®”, “FT-SE®” and “Footsie®” are trademarks jointly owned by the London Stock Exchange Plc and The Financial Times Limited and are used by FTSE International Limited (“FTSE”) under licence. The FTSE Global Equity Index Series is calculated by FTSE. “FTSE®” is a trademark of The Financial Times Limited (“FT”) and the London Exchange plc (the “Exchange”), and has been licensed for use for certain purposes by Charles Schwab Investment Management, Inc. The Schwab Domestic ETFs, based on The Dow Jones Indexes, are not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation regarding the advisability of investing in such products.
©2009 Charles Schwab & Co., Inc. Member SIPC