Schwab Slashes Expenses On Its ETFs

Charles Schwab has slashed the operating expense ratios (OERs) for each of its 15 Schwab ETFs™, dramatically elevating its position in the ETF industry with the lowest OERs in their respective Lipper categories.

“In this period of uncertainty in the markets, the expenses investors pay are the only sure thing. As a long-time advocate for investors, we want to offer our clients a truly low-cost way to build a diversified portfolio.”

Schwab is an industry leader in serving ETF investors, with $142 billion in client ETF assets as of August 31, 2012. The company launched its own Schwab ETFs in November 2009, becoming the first to introduce commission-free online trading of ETFs in client accounts. Since then, Schwab ETFs have grown to over $7.2 billion in assets under management as of August 31, 2012. Schwab has a 21-year history of directly managing passive index products, with $34.8 billion in assets under management in these investments as of August 31, 2012.

According to CEO Walt Bettinger, “In this period of uncertainty in the markets, the expenses investors pay are the only sure thing. As a long-time advocate for investors, we want to offer our clients a truly low-cost way to build a diversified portfolio.”

He continued, “It shouldn’t cost a lot for investors to do the right things with their money. Our roots are in building great tools and products for clients at affordable prices that improve the investing experience, from discount brokerage services and online trading to advice products like Schwab Managed Portfolios™ and commission-free online trading of our ETFs. We’re committed to being at the forefront of the ETF industry and to making the ETF investment equation simple and smart, whether the investment is small or large.”

Marie Chandoha, President of Charles Schwab Investment Management, added, “For investors, one of the keys to long-term success is constructing well-diversified portfolios that address their goals as cost-effectively as possible. We believe Schwab ETFs are a great tool for this because they provide our clients with exposure to core asset categories, and have a history of being tax efficient and performing in line with their indexes. Today’s announcement lowers one more barrier for investors who use our ETFs as the building blocks of their portfolios.”

The operating expense ratio changes, which took effect yesterday, are as follows:

Schwab ETFs™
Lipper Category:Domestic Equity ETFs Schwab ETFs Vanguard
OER
Effective
9/4
SPDR
OER
Effective
9/4
Former
OER
OER
Effective
9/20
Multi-Cap Core 0.06% SCHB

0.04%

VTI0.06% TMW0.20%
Large-Cap Core 0.06% SCHX0.04% VV0.10% ELRY0.20%
Multi-Cap Growth 0.13% SCHG0.07% N/A N/A
Large-Cap Value 0.13% SCHV0.07% VTV0.10% SPYV0.20%
Equity Income 0.17% SCHD0.07% VYM0.13% N/A
Mid-Cap 0.13% SCHM0.07% VO0.10% EMM0.25%
Small-Cap Core 0.13% SCHA0.10% VB0.16% SLY0.20%
Real Estate 0.13% SCHH

0.07%

VNQ

0.10%

RWR

0.25%

Lipper Category:International Equity ETFs Schwab ETFs Vanguard
OER
Effective
9/4
SPDR
OER
Effective
9/4
Former
OER
OER
Effective
9/20
International Large-Cap 0.13% SCHF0.09% VEA0.12% CWI0.34%
Emerging Markets 0.25% SCHE0.15% VWO0.20% BIK0.50%
International Small-/Mid-Cap Growth 0.35% SCHC

0.20%

VSS

0.28%

GWX

0.59%

Lipper Category:Fixed Income ETFs Schwab ETFs Vanguard
OER
Effective
9/4
SPDR
OER
Effective
9/4
Former
OER
OER
Effective
9/20
General U.S. Treasury  

0.12%

SCHO0.08%

 

SCHR

0.10%

EDV0.13% ITE0.13%
Intermediate Investment Grade 0.10% SCHZ0.05% BND0.10% LAG0.17%
U.S. TIPS 0.14% SCHP0.07% N/A IPE0.18%

Based on expense ratio data comparisons between Schwab and non-Schwab ETFs in their respective Lipper categories. Expense ratio data for non-Schwab ETFs were obtained from the funds’ prospectuses, data pulled as of 9/4/12. Expense ratio data for Schwab ETFs are as of 9/20/12. ETFs in the same Lipper category may track different indexes, have differences in holdings, and show different performance. Competitors may offer more than one ETF in a Lipper category. The non-Schwab ETFs shown represent the funds with the lowest expense ratio within their fund family in their respective Lipper category. Expense ratios are subject to change.

Schwab ETFs can be bought and sold without commissions in Schwab accounts if purchased online**, regardless of the number of shares traded.

Schwab offers a host of resources to help clients understand and choose ETFs that fit their investment needs, including the Schwab ETF Select List™; tutorials, research and tools available via Schwab’s online ETF center; and workshops at local Schwab branches.

About Charles Schwab Investment Management

Founded in 1989, Charles Schwab Investment Management, Inc. (CSIM), a subsidiary of The Charles Schwab Corporation, is one of the nation’s largest asset management companies with $208.6 billion in assets under management as of August 31, 2012. It is among the country’s largest money market fund managers and is the third-largest provider of retail index funds1. In addition to managing Schwab’s proprietary funds, CSIM provides oversight for the institutional-style, sub-advised Laudus Fund family. CSIM currently manages 75 mutual funds, 24 of which are actively-managed funds, in addition to four separate account model portfolios, and 15 ETF offerings2.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 8.7 million active brokerage accounts, 1.5 million corporate retirement plan participants, 838,000 banking accounts, and $1.86 trillion in client assets. The company was ranked “Highest in Investor Satisfaction With Self-Directed Services” in the 2012 US Self-Directed Investor Satisfaction StudySM from J.D Power and Associates. 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. 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. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides trust and custody services, banking and mortgage services and products. Investment products offered by Charles Schwab & Co., Inc. are not insured by the FDIC, are not deposits or obligations of Charles Schwab Bank, and are subject to investment risk, including the possible loss of principal invested. More information is available at www.schwab.com andwww.aboutschwab.com. (0912-6043)

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© 2012 Charles Schwab & Co., Inc. Member SIPC

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