Schwab told investors last month it expects to lose as much as $200 million in revenue this year from reducing fees on money market funds because of a drop in interest rates. Those fees may be reinstated once the Federal Reserve raises interest rates from their current near-zero level, Merk said.
Schwab lost 15 cents today to $18.58 at 5 p.m. in composite trading on the Nasdaq Stock Market. The shares have gained 15 percent this year, compared with a 17 percent advance in the KBW Capital Markets Index.
Schwab is awaiting approval from the U.S. Securities and Exchange Commission to introduce its own line of exchange-traded funds. Schwab clients represent about a fifth of all retail investor assets in ETFs, giving the company a base of clients that may help fuel growth of the new funds, said Merk.
“We want to be a bigger player in the ETFs than we have been,” he said. “This will be a multiyear effort.”