Schwab Reduces Fees on Six Proprietary Exchange Traded Funds

No other ETFs offer lower expense ratios in their categories than Schwab ETFs™ and Schwab clients can trade them commission-free online at schwab.com

Low OERs, commission-free trading, and tools, research and Schwab guidance combine for industry leading ETF value

Monday, June 14, 2010 5:15 am PDT

Dateline:

SAN FRANCISCO

Public Company Information:

NYSE:
SCHW
"ETFs provide a liquid, low-cost and more tax-efficient way to invest in and trade entire segments of the market"

SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab, a marketplace leader of exchange traded funds (ETFs), today announced permanent operating expense ratios (OERs) reductions on six of eight Schwab ETFs™, meaning that no other ETFs offer lower expense ratios in their categories than Schwab ETFs™. The six ETFs reducing OERs include:

  • Schwab U.S. Broad Market ETFTM from 0.08% to 0.06%
  • Schwab U.S. Large-Cap Growth ETFTM from 0.15% to 0.13%
  • Schwab U.S. Large-Cap Value ETFTM from 0.15% to 0.13%
  • Schwab U.S. Small-Cap ETFTM from 0.15% to 0.13%
  • Schwab International Equity ETFTM from 0.15% to 0.13%
  • Schwab Emerging Markets Equity ETFTM from 0.35% to 0.25%

Schwab clients will continue to be able to trade all these ETFs commission free online in their Schwab accounts.

“Schwab is committed to providing investors with the building blocks for a well-diversified portfolio at an exceptionally low-cost. Following these most recent reductions, no other ETFs offer lower expense ratios in their categories than Schwab ETFs™ and we will continue to offer them commission-free online for clients that trade in their Schwab accounts,” said Peter Crawford, senior vice president, Investment Management Services at Charles Schwab. “The combination of low costs and the resources to put together smart investment strategies make ETF investing an unbeatable value at Schwab.”

SCHWAB ETFs™*

Domestic Equity ETFs   Former

OER

 

OER Effective 6/14

  Vanguard   iShares   SPDRs
U.S. Broad Market   0.08%   SCHB

0.06%

  VTI

0.07%

  IWV

0.21%

  TMW

0.21%

U.S. Large-Cap   0.08%   SCHX

0.08%

  VV

0.12%

  IVV

0.09%

  SPY

0.09%

U.S. Large-Cap Growth   0.15%   SCHG

0.13%

  VUG

0.14%

  IVW

0.18%

  ELG

0.20%

U.S. Large-Cap Value   0.15%   SCHV

0.13%

  VTV

0.14%

  IVE

0.18%

  ELV

0.21%

U.S. Small-Cap   0.15%   SCHA

0.13%

  VB

0.14%

  IJR

0.20%

  DSC

0.32%

         
International Equity ETFs   Former

OER

 

OER Effective 6/14

  Vanguard   iShares   SPDRs
International Equity   0.15%   SCHF

0.13%

  VEA

0.15%

  EFA

0.35%

  CWI

0.34%

International Small-Cap Equity   0.35%   SCHC

0.35%

  VSS

0.40%

  SCZ

0.40%

  GWX

0.59%

Emerging Markets Equity   0.35%   SCHE

0.25%

  VWO

0.27%

  EEM

0.72%

  GMM

0.59%

*All fund expense ratios are based on the most recent prospectus available as of 6/14/10.

 

Schwab ETFs can be bought and sold without commissions in Schwab accounts if purchased online, regardless of the number of shares traded. They are designed to be core holdings in a diversified portfolio and can be purchased in blocks as small as one share per trade.

Commission-free online trading of Schwab ETFs is available to individual investors at Schwab, to the more than 6,000 independent investment advisor firms who use Schwab’s custodial services through Schwab Advisor Services and through Schwab retirement accounts that permit trading of ETFs. Schwab ETFs are listed on NYSE Arca, and can also be traded on other exchanges.

“ETFs provide a liquid, low-cost and more tax-efficient way to invest in and trade entire segments of the market,” said Crawford. “Schwab has lowered expenses to make it more cost effective for more investors, advisors and traders to take advantage of this investment option.”

*Expense comparison data was obtained from the funds’ prospectuses as of 6/14/10. Comparisons are made between each Schwab ETF and ETFs in the same Morningstar asset class. Schwab ETFs expense ratios are equal to or lower than comparative ETFs in their respective asset class. ETFs in the same asset class may track different indexes, have differences in holdings, and show different performance. Expense ratios are subject to change.

Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can obtain a prospectus 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.

In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Investments in smaller companies typically exhibit higher volatility.

Diversification may not protect against market risk.

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.

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

About Charles Schwab Investment Management

Founded in 1989, Charles Schwab Investment Management, Inc., a subsidiary of the Charles Schwab Corporation, is one of the nation's largest asset management companies with more than $199 billion in assets under management as of March 31, 2010. 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 78 mutual funds, 32 of which are actively-managed funds, four separate account model portfolios, and eight ETF offerings.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 7.9 million client brokerage accounts, 1.5 million corporate retirement plan participants, 783,000 banking accounts, and $1.5 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. Named Highest in Investor Satisfaction with Self-Directed Services by J.D. Power and Associates in 2009, 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 banking and mortgage services and products. More information is available at www.schwab.com. (0610-3479)

© 2010 Charles Schwab & Co., Inc. All rights reserved. Member SIPC.

Contact:

SunStar Strategic
Melissa Murphy, 703-894-1056
or
Charles Schwab
Matt Hurwitz, 415-606-9204

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