Charles Schwab Collective Trust Funds Surpass $10 Billion in Assets under Management

Funds Increasing in Popularity with a Compound Annual Growth Rate of 29 Percent

Wednesday, June 23, 2010 6:00 am PDT



Public Company Information:

"Investment-only funds can give plan sponsors greater control over what is offered in a plan’s core investment line-up and enable them to further diversify the investments they make available to plan participants."

SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab announced today that assets under management in its collective trust funds, designed specifically for retirement plan sponsors and participants and available through Charles Schwab Trust Company, a division of Charles Schwab Bank, recently surpassed $10 billion. The appeal of these funds, which include active and index target date retirement trust funds, stable value fund, fixed income, and equity funds, has grown consistently in the past five years among both plan sponsors and retirement plan participants. From 2005 through 2009, Schwab’s collective trust funds have grown at a compound annual growth rate of 29 percent.

Schwab’s collective trust funds provide plan sponsors and participants with diversified portfolios across an array of asset allocation strategies based on a non-proprietary investment sub-advisor model, which provides access to each sub-advisor’s expertise in a specific asset class. The use of sub-advisors gives Schwab the flexibility to replace managers and can increase the comfort level of plan sponsors who prefer a multiple manager strategy. In addition, the funds’ collective trust structure helps keep costs down, another key benefit for investors. Collective trust funds can also offer more transparency of underlying holdings, and because only eligible retirement plans may invest, the possibility of relatively predictable and consistent cash flows.

“We have seen very strong interest in collective trust funds, largely because plan sponsors are increasingly enthusiastic about Schwab’s open-architecture approach to using independent sub-advisors in the funds,” said John Sturiale, investment officer at Charles Schwab Bank and managing director with Charles Schwab Investment Management. “Plan sponsors are asking important questions about underlying investments and how they are chosen, and they see our approach as a real differentiator in the industry with many funds still relying heavily on proprietary products.”

Schwab’s suite of collective trust funds includes the following:

  • Schwab Managed Retirement Trust Funds – Actively managed funds tied to target retirement dates in five-year increments from 2010 to 2050.
  • Schwab Indexed Retirement Trust Funds Passively managed funds tied to target retirement dates in five-year increments from 2010 to 2050.
  • Charles Schwab Stable Value Fund – A diversified, low cost capital preservation vehicle supported by a variety of well-known and experienced investment sub-advisors, and wrapped by multiple insurers and banks.
  • Schwab Institutional Core and Core Plus Fixed Income Trust Funds – Low Cost fixed income funds supported by a variety of well known and experienced sub-advisors.
  • Schwab Institutional Large Cap Growth, Value and Small Cap Trust Funds – Low Cost equity funds in differing styles supported by a variety of well known and experienced sub-advisors.

In addition, Schwab has plans to launch an International Collective Trust Fund later in 2010, which will also be available through Charles Schwab Trust Company, have a sub-advisor model, and will be diversified, across large, small and emerging international markets, all in one fund.

The majority of assets in Schwab’s collective trust funds are held in either the Stable Value Fund or in its suite of active and passive target date retirement trust funds. The Stable Value Fund has approximately $5.8 billion in assets under management, and the target funds have approximately $3.6 billion in assets under management.

Defined Contribution Investment-Only Growth

In addition to showing strong growth among Schwab’s bundled retirement plan clients, the firm’s collective trust funds have also displayed growth through the defined contribution investment-only (DCIO) channel for plan sponsors that wish to include Schwab funds in their plan’s investment line-up, but do not use Schwab Retirement Plan Services as their retirement plan recordkeeper. Through the first quarter of 2010, nearly 20 percent of assets held in Schwab’s collective trust funds were through the DCIO channel, including assets held in plans served by Schwab’s third party administrator clients.

“The defined contribution investment-only market is picking up steam,” said Sturiale. “Investment-only funds can give plan sponsors greater control over what is offered in a plan’s core investment line-up and enable them to further diversify the investments they make available to plan participants.”

For more information about Schwab’s collective trust funds, visit

The Schwab Managed Retirement Trust Funds™, the Schwab Indexed Retirement Trust Funds®, the Schwab Institutional Trust Funds®, and the Charles Schwab Stable Value Fund™ are collective trust funds managed and distributed by Charles Schwab Trust Company (CSTC), a division of Charles Schwab Bank. CSTC acts as trustee, manager, and distributor of the Funds and is responsible for the selection, monitoring and replacement of the Funds' investment sub-advisors. The Funds are not mutual funds, and their units are not registered under the Securities Act of 1933, as amended or applicable securities laws of any state or other jurisdiction. The Funds are not registered under Investment Company Act of 1940, as amended, or other applicable law and unit holders are not entitled to the protections of the 1940 Act. The Funds are not insured by CSTC, any of its affiliates, the FDIC or any other person. As defined in the Funds’ Declaration of Trust and Participation Agreement documents, the Funds are available for investment by eligible, qualified retirement plan trusts only.

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, 794,000 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. 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. (“Schwab”) (member SIPC,, 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 Schwab Advisor Services. 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 (0510-2837)


Charles Schwab
Michael Cianfrocca, 415-667-0344
Intermarket Communications
Eric Hazard, 212-754-5610

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