Public Company Information:
SAN FRANCISCO--(BUSINESS WIRE)--Building on the success of its innovative suite of Fundamental Index mutual funds, Charles Schwab Investment Management, the asset management subsidiary of the Charles Schwab Corporation, has added two new international funds to its lineup.
The new Schwab Fundamental International Small-Mid Company Index Fund and the Schwab Fundamental Emerging Markets Index became available on January 31, 2008. They are the latest additions to the three Schwab Fundamental Index funds that were launched in April 2007 to invest in large U.S. companies, large international companies, and small-mid size U.S. companies.
All five of Schwab’s Fundamental Index Funds are based on the FTSE RAFI Index series, for which Schwab Funds is the exclusive non-ETF equity mutual fund provider in the United States. They leverage the groundbreaking research of Robert Arnott and his company, Research Affiliates, as well as FTSE Group's global indexing expertise.
The Fundamental Index methodology differs from traditional indexes, which are weighted by market capitalization, by selecting and weighting stocks based on four fundamental financial measures: sales, cash flow, book value and dividends.
Randall Merk, president and CEO of Charles Schwab Investment Management, notes that Charles Schwab was one of the early pioneers of index fund investing, and its cap-weighted funds remain among its most popular investment options. “The addition of Fundamental Index Funds gives investors and their advisors another option to capture performance, and a way to take advantage of the latest sophisticated research and tools in the indexing field,” Merk said.
Merk said the first three Schwab Fundamental Index funds attracted nearly $900 million in assets in their first eight months of operation. “Our investment managers will continue to evaluate other possible applications of what Arnott calls ‘the next generation of indexing’,” he added.
“The Fundamental Index approach aims to capture performance by eliminating the Achilles heel of cap-weighted indexes, because we no longer overweight overvalued companies and underweight those that are undervalued,” Arnott said. “Our research shows the performance advantage is even more pronounced in less-efficient asset classes such as emerging markets and the small- to mid-size international sector.”
Each Schwab Fundamental Index fund is available in three share classes: Investor Shares with a $100 minimum investment, Select Shares with a $50,000 minimum, and Institutional Shares with a $500,000 minimum. Advisors may aggregate client funds to meet the investment minimums for Select and Institutional Shares. Net expense ratios for the new funds are as follows:
|Schwab Fundamental International Small-Mid Company Index Fund|
Investor: (SFIVX) 0.79%1
Select: (SFSMX) 0.64%1
Institutional: (SFILX) 0.55%1
|Schwab Fundamental Emerging Markets Index Fund|
Investor: (SFEMX) 0.84%1
Select: (SFESX) 0.69%1
Institutional: (SFENX) 0.60%1
More information about Schwab’s line-up of Fundamental Index Funds is available at www.schwabfunds.com/fundamental or by calling (800) 308-1486.
Jeff Mortimer, senior vice president and chief investment officer, equities, for Charles Schwab Investment Management, Inc., has overall responsibility for the management of Schwab’s Fundamental Index funds. He joined Schwab in 1997 after working for nine years in asset allocation and manager selection. Larry Mano, senior portfolio manager, is responsible for the day-to-day management of the funds. Prior to joining Schwab in 1998, he worked for 20 years in equity management.
About Charles Schwab Investment Management
Founded in 1991, Charles Schwab Investment Management, Inc., (CSIM) a subsidiary of the Charles Schwab Corporation, is one of the nation's largest asset management companies with over $236 billion in assets under management as of December 31, 2007. 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 proprietary funds, CSIM provides oversight for the institutional-style, sub-advised Laudus Fund family. CSIM currently manages 73 mutual funds, including 35 actively-managed funds, and five separate account model portfolios.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.0 million client brokerage accounts, 1.2 million corporate retirement plan participants, 262,000 banking accounts, and $1.4 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, http://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 Schwab Institutional division. The Charles Schwab Bank, (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com. (2008-1029)
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 (877) 796-6740. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. INVESTMENT VALUE AND RETURN WILL FLUCTUATE SUCH THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN ORIGINAL COST.
1 Net OER guaranteed through February 27, 2009 (excluding interest, taxes and certain non-routine expenses).
International investing involves special risks such as currency fluctuation and political instability. Investing in emerging markets may accentuate these risks. Historically, small-cap stocks have been more volatile than the stocks of larger, more-established companies.
Schwab Funds is the exclusive FTSE RAFI Index Series provider of non-exchange traded passively managed equity mutual funds. The Fundamental Index, Fundamentals Weighted and RAFI trade names and patent-pending concept are the exclusive property of Research Affiliates, LLC and are used by Charles Schwab Investment Management under license through FTSE. FTSE, Rob Arnott and Research Affiliates, LLC are not affiliated with Charles Schwab & Co., Inc. and its affiliates, parents and subsidiaries.