Reduced Expenses, with Low Minimum Investments, Continue Schwab’s Tradition of Making Low-Cost Investing Available to All Investors

Tuesday, May 5, 2009 8:55 am PDT



Public Company Information:


SAN FRANCISCO--(BUSINESS WIRE)--Please replace the second photo with the accompanying corrected photo of Randall W. Merk.

The release reads:


Reduced Expenses, with Low Minimum Investments, Continue Schwab’s Tradition of Making Low-Cost Investing Available to All Investors

Charles Schwab Investment Management, Inc. today announced lower expenses and simplified share classes on its Schwab equity index funds. All Schwab equity index funds now offer the same low fund expenses to investors regardless of how much they invest, starting at a low $100 minimum investment. The changes provide low-cost simple solutions for investors of all asset levels who want broad market exposure as part of their investment strategy.

For example, with a low operating expense ratio and $100 minimum, Schwab’s S&P 500 Index Fund is an industry-beating value:

Equity Index Fund


Investment Minimum


Expense Ratio

Schwab S&P 500 Index Fund     $100     .09%
Vanguard 500 Index Fund Investor Shares     $3,000     .15%
Fidelity Spartan 500 Index Fund Investor Class     $10,000     .10%

Vanguard 500 Index Fund Investor Shares. Source: as of 04/03/09.

Fidelity Spartan 500 Index Fund Investor Class. Source: as of 04/03/09.

Schwab equity and bond funds are also simplifying their fees with one expense ratio available at investments of $100 or more. All Schwab Funds will continue to be sold with no-loads.

“Over the years, Schwab has created a business that stands for good value and straightforward products and services that are accessible to everyone. It’s what our clients expect from us — all of our clients — and we’re committed to that now and into the future,” said Walt Bettinger, Schwab CEO. “Every Schwab client is important and by reducing our fund expenses and simplifying the fees, more investors of all sizes and types can plan for a brighter future.”

Investing in Schwab Funds is now easier and more affordable based on the following changes:

  • Reduced fund expenses for all six Schwab Equity Index Funds:
    Schwab S&P 500 Index Fund, Schwab Total Stock Market Fund, Schwab 1000 Fund, Schwab International Index Fund, Schwab Small-Cap Index Fund, and Schwab Institutional Select S&P 500 Fund. Notably, the Schwab S&P 500 Index Fund and the Schwab Total Stock Market Index Fund will now have expense ratios of only 0.09%.1
  • Across all Schwab equity and bond funds, everyone in the same fund will now pay the same lowest fund expenses, regardless of the size of investment.
    For example, an investor owning the investor share class of Schwab’s Dividend Equity Fund will see an immediate 0.15% expense reduction, matching expenses on Select Shares of the fund, the lowest expense share class currently available.
  • A low initial investment of just $100 for Schwab equity and bond funds makes it easier for everyone to start investing.

These changes continue to position Schwab on the frontier of providing investors and independent investment advisor clients with great value in mutual funds. In this spirit, Schwab Funds also recently lowered expense ratios on its Hedged Equity and Target Date funds.

According to Randy Merk, president and CEO of Charles Schwab Investment Management, “Our belief is that lower expenses and investment minimums, and simpler choices, will encourage clients to invest for the long-term. We understand that investing has been challenging over the past year, and while we can’t tell clients what the market is going to do tomorrow, we can help them by making good investment options easier, less costly and available.”

1 Effective May 5, 2009, Charles Schwab & Co. Inc. and the investment adviser have agreed to limit the “net operating expenses” (excluding interest, taxes and certain non-routine expenses) of each of the Schwab S&P 500 Fund and the Schwab Total Stock Market Fund to 0.09% for so long as the investment adviser serves as the adviser to the Fund. Net operating expenses of other Equity Index Funds are also limited and will range from 0.19% to 0.29%. "Equity Index Funds" do not include the Schwab Fundamental Index* Funds. See a Fund's prospectus for more information on expense limitations.

*Fundamental Index is a registered trademark of Research Affiliates, LLC.

Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can view, download and print a prospectus by clicking on Prospectuses & Reports. Please read the prospectus carefully before investing.

Trades in Schwab Funds are available without a transaction fee when placed through or our automated phone channels. For each trade order placed through a broker, a $25 service charge applies.

S&P 500® is a trademark of the McGraw-Hill Companies, Inc., and has been licensed for use by the Schwab S&P 500 Fund. The Schwab S&P 500 Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.

About Charles Schwab Investment Management, Inc.

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 $236 billion in assets under management as of Dec. 31, 2008. 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 84 mutual funds.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.5 million client brokerage accounts, 1.5 million corporate retirement plan participants, 508,000 banking accounts, and $1.1 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,, 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. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0509-8909)

Photos/Multimedia Gallery Available:


Charles Schwab
David Weiskopf, 415-636-5753
Matt Hurwitz, 415-636-3700
SunStar PR
Melissa Murphy, 703-894-1056

Multimedia Files:

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Randall W. Merk, president and chief executive officer, Charles Schwab Investment Management (Photo: Business Wire)
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Walter W. Bettinger II, president and chief executive officer, The Charles Schwab Corporation (Photo: Business Wire)

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