Thursday, January 20, 2011
Schwab Expands its ETF Lineup to 13
News summary by MFWire's editors
] just launched two new ETFs.
Yesterday the San Francisco-based firm unveiled the Schwab U.S. REIT ETF
the Schwab U.S. Mid-Cap ETF
, bringing its total proprietary ETF count to 13.
Both funds cost 13 basis points, which appears to put them at the cheapest end of the
ETF pack when Schwab compares them with similar products at the ETF giants.
ETF Guide picked up
Company Press Release
SAN FRANCISCO--Charles Schwab, a marketplace leader of ETFs, today announced it
offers the new Schwab U.S. REIT ETF™ (SCHH) and the new Schwab U.S. Mid-Cap ETF™
(SCHM), expanding its existing proprietary offering to 13 equity and fixed income
ETFs. Like all other Schwab ETFs, they can be bought and sold commission-free* online
in Schwab accounts and have among the lowest operating expense ratios (OERs) in the
“Individual investors, traders and advisors continue to demand ETFs at a low cost
that can function as building blocks in their portfolios.”
The Schwab U.S. REIT ETF and Schwab U.S. Mid-Cap ETF began trading on Thursday,
January 13, 2011.
“Individual investors, traders and advisors continue to demand ETFs at a low cost
that can function as building blocks in their portfolios,” said Tamara Bohlig, vice
president of product management at Schwab. “Our newest ETFs are part of Schwab’s
ongoing commitment to offering broad exposure to core market segments at a compelling
The Schwab U.S. REIT ETF and Schwab U.S. Mid-Cap ETF seek to track as closely as
possible, before fees and expenses, the total return of the Dow Jones U.S. Select
REIT Index and the Dow Jones U.S. Mid-Cap Total Stock Market Index. As of December
31, 2010, Dow Jones U.S. Select REIT Index had 82 securities and the Dow Jones U.S.
Mid-Cap Total Stock Market Index had 495 securities.
The Schwab U.S. REIT ETF (SCHH) may be appropriate for investors seeking to add
exposure to both the commercial and residential U.S. real estate markets, providing
greater sector diversification than by investing directly in real estate. The Schwab
U.S. Mid-Cap ETF (SCHM) can offer long term growth potential and access to the mid-
cap segment of the U.S. equity market, giving investors diversified exposure
representative of the broader U.S. stock market.
Charles Schwab is a leader in the ETF market, with more than $110 billion in total
ETF assets custodied on their platform as of year-end 2010. Schwab’s suite of 11 ETFs
had $2.7billion in assets under management as of December 31, 2010, and all Schwab
ETFs™ ended the 2010 tax year without any capital gains.
Schwab ETF Fund symbol & expense ratio comparison1
NEW ETFs Schwab Vanguard iShares SPDRs
Schwab U.S. REIT ETF™ SCHH 0.13%
Schwab U.S. Mid-Cap ETF™ SCHM 0.13%
Domestic Equity ETFs Schwab Vanguard iShares SPDRs
Schwab U.S. Broad Market ETF™ SCHB 0.06%
Schwab U.S. Large-Cap ETF™ SCHX 0.08%
Schwab U.S. Large-Cap Growth ETF™ SCHG 0.13%
Schwab U.S. Large-Cap Value ETF™ SCHV 0.13%
Schwab U.S. Small-Cap ETF™ SCHA 0.13%
International Equity ETFs Schwab Vanguard iShares SPDRs
Schwab International Equity ETF™ SCHF 0.13%
Schwab International Small-Cap Equity ETF™ SCHC 0.35%
Schwab Emerging Markets Equity ETF™ SCHE 0.25%
Bond ETFs Schwab Vanguard iShares SPDRs
Schwab U.S. TIPS ETF™ SCHP 0.14%
Schwab Short-Term U.S. Treasury ETF™ SCHO 0.12%
Schwab Intermediate-Term U.S. Treasury ETF™ SCHR 0.12%
1 Expense comparison data was obtained from the funds' prospectuses as of 1/1/11.
Comparisons are made between each Schwab ETF and ETFs in the same Morningstar asset
class from the three largest ETF providers. ETFs in the same asset class may track
different indexes, have differences in holdings, and show different performance.
Expense ratios are subject to change.
In addition to offering investors impressive value through its own Schwab ETFs,
Schwab continues to expand its resources to help clients learn about and choose ETFs
that may best serve their investment needs. This includes tutorials, research and
tools via the online ETF Center, as well as live client events in local Schwab
Commission-free* online trading of Schwab ETFs is available to individual investors
at Schwab, to the more than 6,000 independent investment advisors firms who use
Schwab’s custodial services through Schwab Advisor Services, and through Schwab
retirement accounts that permit trading of ETFs. Schwab ETFs are immediately
marginable by Schwab clients and have no minimum required holding period in order to
be eligible for commission-free online trading. Schwab ETFs are listed on NYSE Arca
and can be traded on other exchanges.
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 $200 billion in assets under management as of December 31, 2010. 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 ETFs™ and Schwab Funds®, CSIM is
investment adviser for the institutional-style, sub-advised Laudus Fund family. CSIM
currently manages more than 70 mutual funds, 13 exchange traded funds, and four
separate account model portfolios.
About Charles Schwab
The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial
services, with more than 300 offices and 8.0 million client brokerage accounts, 1.5
million corporate retirement plan participants, 690,000 banking accounts, and $1.57
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. 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 banking and mortgage services and products. More information is available at
www.schwab.com and www.aboutschwab.com. (0111-0436)
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
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 does not eliminate the risk of market loss.
There is no guarantee that capital gains distributions will not be made in the
*Restrictions Apply: Online trades of Schwab ETFs™ are commission-free at The Charles
Schwab & Co., Inc. (Member SIPC), while trades of 3rd-party ETFs are subject to
commissions. Broker-Assisted and Automated Phone trades are subject to service
charges. Minimum $1,000 deposit is required to open most Schwab brokerage accounts.
Waivers may apply. See the Charles Schwab Pricing Guide for more details. All ETFs
are subject to management fees and expenses.
An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Investing in REITs may pose additional risks such as real estate industry risk,
interest rate risk and liquidity risk. Schwab REIT ETF is not diversified and may
invest in securities of relatively few issuers. As a result, the fund may experience
Dow Jones®, and the names identifying the Dow Jones Indexes underlying Schwab’s
Domestic ETFs are trademarks of Dow Jones Trademark Holdings, LLC (“Dow Jones”), have
been licensed to CME Group Index Services LLC (“CME Indexes”) and sublicensed for use
for certain purposes by Charles Schwab Investment Management, Inc. (CSIM). The Dow
Jones Total Stock Market Indexes are a product of Dow Jones Indexes, a licensed
service mark of CME Indexes, and have been sublicensed for use for certain purposes
The Schwab Exchange-Traded Funds™ (Schwab ETFs) are distributed by SEI Investments
Distribution Co. (SIDCO). Charles Schwab Investment Management, Inc. (CSIM) serves as
the registered investment adviser to Schwab ETFs. CSIM and Charles Schwab & Co, Inc.
are wholly-owned subsidiaries of the Charles Schwab Corporation, none of which is
affiliated with SIDCO. Neither SIDCO nor CSIM, nor any of their affiliates, are
affiliated with the companies listed above.
Neil Anderson, Managing Editor
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