Schwab Expands Fixed Income Offerings with PIMCO Professionally Managed Municipal Bond 'Ladders'

Schwab Offers Four PIMCO Muni Bond Strategies Designed to Provide Tax-Exempt Income and Ongoing Credit Monitoring

Monday, March 15, 2010 5:00 am PDT



Public Company Information:

"Highest in Investor Satisfaction with Self-Directed Services"

SAN FRANCISCO--(BUSINESS WIRE)--As part of its commitment to providing investors with a wide array of fixed income solutions and simplicity in the investing process, Charles Schwab & Co., Inc. is offering four Municipal Bond Ladder Separately Managed Account (SMA) strategies managed by PIMCO, one of the most respected bond managers in America. The competitively priced strategies are designed for fixed income investors seeking tax-advantaged solutions and income generation as well as ongoing professional management. According to a recent Schwab study, 55 – 70 year old investors are more concerned with income generation and principal preservation than portfolio growth when compared to younger investors.

Laddering municipal bonds involves buying municipal bonds that mature at staggered future dates to help minimize overall exposure to interest rate fluctuations while providing tax-exempt income. The Schwab-sponsored PIMCO Municipal Bond Ladder SMAs employ a professionally managed buy-and-hold strategy with a focus on investment selection and ongoing credit monitoring. Investors work with their Schwab consultant or an independent investment advisor to select from four municipal bond ladder strategies that use PIMCO’s bond selection expertise.

PIMCO conducts continual credit surveillance, reinvests maturing securities, and provides institutional purchasing power, all for a highly competitive fee. The SMAs have an investment minimum of $250,000 and a program management fee of 0.35% for the first $1 million invested, 0.30% for the next $4 million and 0.25% for investments above $5 million.

“The new municipal bond ladder SMA strategies were built to make investing in fixed income easier and more transparent, while offering professional ongoing management by PIMCO,” said Andy Gill, senior vice president of Fixed Income. “Because of continued market volatility and the distinct possibility of tax hikes, we are seeing more investors looking for ways to protect their retirement portfolios and generate predictable, tax-advantaged income.”

Investors enjoy the benefits of a separately managed account including professional investment management and ownership of the underlying bonds and can select one of four strategies, each composed of 10 or more rungs for diversification:

  • PIMCO 1-12 Year Municipal Bond Ladder Separately Managed Account Strategy
  • PIMCO 1-18 Year Municipal Bond Ladder Separately Managed Account Strategy
  • PIMCO 1-12 Year California Municipal Bond Ladder Separately Managed Account Strategy
  • PIMCO 1-18 Year California Municipal Bond Ladder Separately Managed Account Strategy

The new PIMCO Municipal Bond Ladder SMA strategies are the latest addition to the robust fixed income solutions and professional advice available at Schwab. Investors and independent investment advisors receive Schwab’s access to the bonds and fixed income market along with the tools and guidance to find the fixed income investments that meet their needs.

The PIMCO Municipal Bond Ladder strategies are available through Schwab’s Managed Account Connection™ program (“Connection”). Please read Schwab’s Schedule H brochure for important information and disclosures relating to Connection and Schwab’s Managed Account Services. In addition, please read PIMCO’s Form ADV or brochure for important information and disclosures. Investments in managed accounts should be considered in view of a larger, more diversified investment portfolio. Bonds in the PIMCO Municipal Bond Ladder strategies may have a rating as low as A- at time of purchase. The strategies may hold callable bonds, which may increase interest rate risk exposure.

Charles Schwab & Co., Inc. (“Schwab”) and Pacific Investment Management Company LLC (“PIMCO”) are separate and unaffiliated companies.

This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, Financial Planner or Investment Manager.


PIMCO is a global investment management firm that was founded in Southern California in 1971. The firm serves an array of clients and manages retirement and other assets that reach more than 8 million people in the U.S. and millions more around the world. Clients include state, municipal, union and private sector pension and retirement plans, educational institutions, foundations, endowments, philanthropic and healthcare institutions, individual and investment saving accounts, public sector reserve management and other public entities in North and South America, Europe, the Middle East and Asia. PIMCO is owned by Allianz S.E., a global insurance company.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 7.7 million client brokerage accounts, 1.5 million corporate retirement plan participants, 739,000 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. (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. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (0310-1853)


Charles Schwab
Lara Edge, 415-667-0588
Eugene Colter, 212-739-3646

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