Schwab Slashes Expenses on Its ETFs

Schwab ETFs now feature lowest expense ratios in their respective Lipper categories

Friday, September 21, 2012 8:10 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"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."

SAN FRANCISCO--(BUSINESS WIRE)--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.

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%

    VTI

0.06%

    TMW

0.20%

Large-Cap Core    

0.08%

    SCHX

0.04%

    VV

0.10%

    ELRY

0.20%

Multi-Cap Growth     0.13%     SCHG

0.07%

    N/A     N/A
Large-Cap Value     0.13%     SCHV

0.07%

    VTV

0.10%

    SPYV

0.20%

Equity Income     0.17%     SCHD

0.07%

    VYM

0.13%

    N/A
Mid-Cap     0.13%     SCHM

0.07%

    VO

0.10%

    EMM

0.25%

Small-Cap Core     0.13%     SCHA

0.10%

    VB

0.16%

    SLY

0.20%


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%     SCHF

0.09%

    VEA

0.12%

    CWI

0.34%

Emerging Markets     0.25%     SCHE

0.15%

    VWO

0.20%

    BIK

0.50%

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%

    SCHO

0.08%

 

SCHR

0.10%

    EDV

0.13%

    ITE

0.13%

Intermediate Investment Grade     0.10%     SCHZ

0.05%

    BND

0.10%

    LAG

0.17%

U.S. TIPS     0.14%     SCHP

0.07%

    N/A     IPE

0.18%

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 and www.aboutschwab.com. (0912-6043)

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Read our blog: Schwab Talk

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

**Restrictions Apply: Online trades of Schwab ETFs™ are commission-free at Schwab, while trades of third-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 details. All ETFs are subject to management fees and expenses.

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 or by visiting www.schwabetfs.com. Please read the prospectus carefully before investing.

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.

Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO is not affiliated with The Charles Schwab Corporation or any of its affiliates.

Information has been sourced by Lipper, a Thomson Reuters Company (“Lipper Content”). All such information is protected by copyright: ©2012 THOMSON REUTERS.

Not FDIC Insured • No Bank Guarantee • May Lose Value

1 As of 7/31/12, Strategic Insight

2 As of 9/13/12, CSIM

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Marie Chandoha, President of Charles Schwab Investment Management, announces that Schwab has slashed the operating expense ratios (OERs) for each of its 15 Schwab ETFs(TM). (Photo: Business Wire)
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Contact:

Charles Schwab
Alyson Nikulicz, 212-403-9240
alyson.nikulicz@schwab.com

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