The latest mutual fund partnership between Schwab and London-based Mondrian is the Laudus Mondrian Global Fixed Income Fund.
In a phone interview with MFWire this afternoon, John Sturiale, vice president and head of proprietary investment product management, explained that Schwab's timing for the launch of this product was influenced by economic trends and strong investor demands for fixed income vehicles. Bond funds have experienced strong inflows recently as investors seek yield and diversification, he explained.
Sturiale noted that only 10 percent of bond mutual fund assets in the U.S. were invested in international bond funds, and contrasted this with the industry's strong diversification for equity products. He observed that investors wanted "more options and more diversity on the fixed income side."
Sturiale added that Schwab has a strong, already-existing relationship with Mondrian as a subadvisor to its funds.
While Mondrian is known for its work on retirement plans and other offerings, its investment management services have only been accessible to institutions and high net worth individuals. This has changed with Mondrian's role as sub-advisor for this fund, which has a minimum initial investment of $100.
The fund invests in bonds issued by governments and government agencies in developed and emerging market countries. Today was the first trading day for the fund, although there was a reduced-expense advance buy-in period.
Company Press Release
Schwab Launches New Laudus Mondrian Global Fixed Income Fund
Investors can access international developed, U.S., and emerging market bond markets in one fund
SAN FRANCISCO--Charles Schwab Investment Management, Inc. announced today the launch of the Laudus Mondrian Global Fixed Income Fund (LMGDX). The new fund provides investors with a single vehicle to access international developed, U.S., and emerging market bond markets worldwide.
Managed by Charles Schwab Investment Management, the value-oriented Laudus Mondrian Global Fixed Income Fund seeks long-term total returns by investing in fixed-income securities around the world. The fund is generally comprised of high-quality bonds issued by the governments or government agencies of developed and emerging market countries. The fund has a gross operating expense ratio (OER) of 1.03 percent, with a net OER of 0.85 percent,1 which is waived through January 10, 2013. The fund is available for a $100 minimum investment.
"Our clients tell us they want exposure to the world’s expanding bond markets – both for their performance potential and for their historically low correlation with other asset classes," said John Sturiale, vice president of Charles Schwab. "We're pleased we can now offer investors the ability to access these markets through one fund managed by an institutional money manager known for its international fixed income capabilities."
The fund's sub-adviser, institutional investment manager Mondrian Investment Partners Limited, takes a value-oriented approach to analyzing global bond markets, looking for opportunities in countries that can provide U.S. investors a high prospective real, inflation-adjusted yield over a market cycle, with the potential for capital gain and currency appreciation. Assets are selected for the portfolio using a disciplined process that combines proprietary fundamental country research, a systematic top-down approach, and a bottom-up analysis of each security’s creditworthiness.
Laudus Mondrian Funds are sub-advised by Mondrian Investment Partners Limited, a London-based institutional investment manager with more than $65 billion in assets for some of the world’s largest companies and public retirement plans as of June 30, 2012. Through Laudus Mondrian Funds, Schwab investors can gain access to institutional quality investment management capabilities. Founded in 1990, Mondrian is known for its international expertise and adherence to a common and consistent value-oriented investment philosophy.
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 $202 billion in assets under management as of May 31, 2012. It is among the country's largest money market fund managers and is the third-largest provider of retail index funds2. In addition to managing Schwab’s proprietary funds, CSIM provides oversight for the institutional-style, sub-advised Laudus Fund family. CSIM currently manages 73 mutual funds, 25 of which are actively-managed funds, in addition to four separate account model portfolios, and 15 ETF offerings3.
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, 815,000 banking accounts, and $1.76 trillion in client assets, as of May 31, 2012. 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 Schwab Advisor Services. 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.