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Rating:Schwab Plans a $24B-AUM Fund Merger Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, June 18, 2024

Schwab Plans a $24B-AUM Fund Merger

by: Neil Anderson, Managing Editor

The team at a publicly traded brokerage's asset management arm is preparing to merger a $24-billion-AUM pair of mutual funds at the end of the summer.

Omar Aguilar
Schwab Asset Management
CEO, Chief Investment Officer
Last Thursday (June 13), the folks at Charles Schwab Investment Management, Inc. (CSIM) [profile] revealed plans to merge the Schwab Variable Share Price Money Fund (SVUXX) into the ultra shares of the Schwab Government Money Fund (SGUXX). Both funds' boards have approved the merger, which is scheduled for September 6.

Both funds are series of the Charles Schwab Family of Funds, both come with an expense ratio of 19 basis points, and both are institutioanl (with a minimum initial investment of $1 million). According to the CSIM team, the two funds "pursue a substantially similar investment objective."

The CSIM team notes that the merger could help provide further economies of scale down the line. And they note that the merger comes in advance of new SEC regulations that, starting October 2, would have forced SVUXX "to implement mandatory liquidity fees ... which would impose operational complexities and may result in reduced investor demand."

SVUXX's inception date was February 25, 2016. As of yesterday, it held about $5.723 billion in AUM.

SGUXX's inception date was September 24, 2020. As of yesterday, it held about $18.67 billion in AUM.

CSIM serves as administrator and investment advisor to both funds. Linda Klingman, managing director and head of money market strategies, serves on the PM teams for both funds. SVUXX's other PMs include: Jonathan Feske, portfolio manager; Michael Lin, senior PM; Karim Menoufy, PM; and Jonathan Roma, senior PM. SGUXX's other PMs include: Lynn Paschen, senior PM; and Nicole Perret-Gentil, PM.

The two funds' other service providers include: BNY Mellon Investment Servicing (US) Inc. as transfer agent; State Street Bank and Trust Company as custodian and fund accountant; and Charles Schwab & Co., Inc. as distributor. 

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