Schwab Launches Schwab ETF OneSource™

New platform offers the most commission-free ETFs available, spanning major asset categories from leading providers

Thursday, February 7, 2013 8:30 am PST

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"Today’s investors, and the advisors who serve them, want sophisticated, low-cost strategies and more control over their investment choices and outcomes"

SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab announced today the launch of Schwab ETF OneSource™ — a new ETF platform that gives investors and advisors access to the most commission-free ETFs anywhere in the industry1.

Beginning today, Schwab clients can buy and sell 105 ETFs with $0 online trade commissions. The offering spans major asset classes, with funds from leading providers, including State Street SPDR® ETFs, Guggenheim Investments, PowerShares, ETF Securities, United States Commodity Funds, and Charles Schwab Investment Management.

“Just as Schwab Mutual Fund OneSource changed the landscape for investors and advisors by providing convenient, affordable access to leading mutual funds when Chuck Schwab introduced it twenty years ago, we believe Schwab ETF OneSource will deliver enormous benefit and change the way our clients buy and sell ETFs,” said Walt Bettinger, CEO of Charles Schwab.

Bettinger emphasized that Schwab clients who buy ETFs online through Schwab ETF OneSource will pay exactly the same operating expense ratios (OERs) they would elsewhere, but without paying a commission.

No Commissions, More Control.

“Today’s investors, and the advisors who serve them, want sophisticated, low-cost strategies and more control over their investment choices and outcomes,” said Bettinger. “By working with these leading ETF managers to offer the largest selection, we’ve created a new home for clients to buy and sell ETFs that is an important complement to the tools and resources we offer to help them achieve their goals.”

He elaborated, “Awareness and popularity of ETFs have been growing steadily across the range of investors and advisors. Whether there is interest in broad-based exposure to equity markets, access to a single asset class, or a specific fund that seeks to reduce volatility – Schwab ETF OneSource offers a solution – and we’re helping investors put more of their money to work for them. It’s another example of Schwab challenging the status quo to bring greater value to our clients.”

Cost Matters

According to the 2012 ETF Investor Study by Charles Schwab, released in October of last year, cost is the number one factor investors look at when selecting ETFs. Investors surveyed said they pay the most attention to OERs, followed by trade commissions. Nearly forty percent say the ability to trade ETFs commission-free is either ‘most important’ or ‘very important.’

The same study revealed that investor usage of ETFs is going strong, with 41 percent planning to invest more in ETFs this year. At the same time, there is a distinct need for investor education, with 45 percent calling themselves novices when it comes to understanding ETFs.

Assets in ETFs stand at $1.4 trillion as investors continue to embrace the diversification, low cost, trading flexibility and transparency that ETFs tend to offer.

“Our goal is to make ETF investing accessible, affordable and understandable,” said Peter Crawford, senior vice president of Charles Schwab. “So while Schwab ETF OneSource offers a highly compelling pricing story, this is not about cost alone. Side-by-side with affordability, we also provide the guidance and educational resources to help investors and advisors select the right ETFs to meet their needs.”

New Portfolio-Building Tool

Crawford cited today’s debut of the Schwab ETF Portfolio Builder™ as notable for self-directed clients who want to create all-ETF portfolios that meet their chosen risk profiles. Constructed from standard risk profiles and featuring eight commission-free ETFs at launch (from Charles Schwab Investment Management as well as others), this new tool makes it simple and affordable to build a well-diversified portfolio. Clients choose a risk profile and can adjust the number of shares for each ETF while viewing the impact on their portfolio, and purchase the portfolio online.

The Schwab ETF Portfolio Builder rounds out Schwab’s robust set of tools and resources, which includes:

  • The recently launched ETF Education Exchange™, another example of industry partnership, where investors have comprehensive access to the latest insights and intelligence from industry-wide ETF thought leaders;
  • The “ETF Research” tab on Schwab.com, where investors can access interactive tutorials and education in the “Understanding ETFs” tab to learn how ETFs work, and search for ETFs based on a wide range of criteria using the ETF Screener; and
  • ETF Select List™, where investors can find high-quality, low-cost ETFs screened by Schwab experts to help fill a gap or develop diversified portfolios.

For a list of the ETFs available commission-free on Schwab ETF OneSource, visit schwab.com/ETFOneSource.

A leader in the retail ETF market, Charles Schwab had $152 billion custodied on its platform as of December 31, 2012. Schwab ETFs™, which can be bought and sold commission-free online in Schwab accounts, had $8.6 billion in assets as of December 31, 2012. In September 2012, Schwab announced dramatic cuts to the expense ratios of all 15 Schwab ETFs, making them the lowest expense ratios in their respective Lipper categories2.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 8.8 million active brokerage accounts, 1.6 million corporate retirement plan participants, 865,000 banking accounts, and $1.95 trillion in client assets as of December 31, 2012. 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; compliance and trade monitoring solutions; 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 lending 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. (0213-1113)

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Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can obtain a prospectus by visiting schwab.com or calling 800-435-4000. Please read the prospectus carefully before investing.

Charles Schwab & Co., Inc. receives remuneration from third-party ETF companies participating in Schwab ETF OneSource for recordkeeping, shareholder services, and other administrative services, including program development and maintenance.

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. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

The information here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The type of securities and investment strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation.

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

PowerShares® is a registered trademark of Invesco PowerShares Capital Management LLC (Invesco PowerShares). Invesco PowerShares and Invesco Distributors, Inc. are indirect, wholly owned subsidiaries of Invesco Ltd. “SPDR” is a registered trademark of Standard & Poor’s Financial Services, LLC (S&P) and has been licensed for use by State Street Corporation. No financial product offered by State Street or its affiliates is sponsored, endorsed, sold, or promoted by S&P. USCF® and the United States Commodity Funds® are registered trademarks of United States Commodity Funds LLC. All rights reserved. Charles Schwab Investment Management, Inc. is the investment advisor for Schwab ETFs and an affiliate of the Charles Schwab Corporation.

© 2013 Charles Schwab & Co., Inc. Member SIPC.

1 Conditions Apply: Trades in ETFs available through Schwab ETF OneSourceTM (including Schwab ETFs™) are available without commissions when placed online in a Schwab account. Service charges apply for trade orders placed through a broker ($25) or by automated phone ($5). An exchange processing fee applies to sell transactions. Certain types of Schwab ETF OneSource transactions are not eligible for the commission waiver, such as short sells and buys to cover (not including Schwab ETFs). Schwab reserves the right to change the ETFs we make available without commissions. All ETFs are subject to management fees and expenses. See the pricing guide for additional information.

2 This claim is based on expense ratio data comparisons between Schwab and non-Schwab ETFs in their respective Lipper categories. Expense ratio data was obtained from Strategic Insight Simfund as of 12/31/12. 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. Expense ratios are subject to change.

Multimedia Files:

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Inside the Mind of ETF Investors* (Infographic courtesy of Charles Schwab & Co., Inc. 0213-1183)
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Contact:

Charles Schwab
Alison Wertheim, 415-667-0475
alison.wertheim@schwab.com
or
The Neibart Group
David Neibart, 718-875-4198
dneibart@neibartgroup.com

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