Schwab Introduces Three Low-Cost Bond Exchange-Traded Funds (ETFs)

New Bond ETFs Have Low Operating Expenses and No Online Trading Commissions for Schwab Clients

Thursday, August 5, 2010 6:00 am PDT



Public Company Information:

"Fixed Income ETFs are the fastest growing segment of the ETF market. We see tremendous potential for their continued growth."

SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab, a marketplace leader of ETFs, today announced the launch of three proprietary bond ETFs, adding to a suite of eight equity Schwab ETFs™. The Schwab Bond ETFs provide single-investment exposure to three types of U.S. Treasuries – short-term, intermediate-term and inflation-protected securities.

“There is growing demand from investors, traders and advisors for ETFs at a low cost,” said Peter Crawford, senior vice president at Schwab. “Fixed Income ETFs are the fastest growing segment of the ETF market. We see tremendous potential for their continued growth.”

Schwab ETFs offer investors an impressive value: they have low operating expense ratios (expenses) for exchange-traded funds and also offer commission-free online trading for clients through their Schwab accounts.

The three new Schwab ETFs are the Schwab U.S. TIPS ETF™ (SCHP), Schwab Short-Term U.S. Treasury ETF™ (SCHO) and Schwab Intermediate-Term U.S. Treasury ETF™ (SCHR).

Charles Schwab is an established leader in the ETF market with nearly twenty-five percent of total U.S. retail ETF assets as of year-end 2009, according to FUSE Research Network and Schwab. Schwab’s eight equity ETFs have $1.4 billion in assets under management as of July 30, 2010 and all eleven of Schwab’s ETFs offer among some of the lowest expenses in the industry.

Schwab Bond ETFs may be appropriate for investors who seek to add exposure to core fixed-income holdings in a diversified portfolio and can be purchased in increments as small as one share per trade. Schwab ETFs are immediately marginable by Schwab clients. Schwab ETFs are listed on NYSE Arca, and can also be traded on other exchanges.

Beyond Schwab’s comprehensive ETF lineup, the firm continues to build out the resources and tools in the proprietary ETF Center to help clients learn about the role of ETFs can serve in a portfolio and choose ETFs that may best serve their investment needs.

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.

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 $187 billion in assets under management as of June 30, 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 ETFs™ and Schwab Funds®, CSIM is investment adviser for the institutional-style, sub-advised Laudus Fund family. CSIM currently manages 73 mutual funds, 11 exchange traded funds, and four separate account model portfolios.

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, 803,000 banking accounts, and $1.36 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 by J.D. Power and Associates, 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. 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 (0810-4748)

Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 1-800-435-4000. Please read the prospectus carefully before investing.

ETFs are subject to risks similar to those of stocks. 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.

All ETFs are subject to management fees and expenses.

Restrictions Apply: Online trades of Schwab ETFs™ are commission-free at The Charles Schwab & Co., Inc. (Member SIPC), while trades of 3rd-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 more details.

An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Government backing applies only to the government-issued bonds that make up of the fund, not the fund itself.

TIPS generally have lower yields than conventional fixed rate bonds and will likely decline in price during periods of deflation, which could result in losses.

The Schwab Exchange-Traded Funds™ (Schwab ETFs) are distributed by SEI Investments Distribution Co. (SIDCO). Charles Schwab Investment Management, Inc. (CSIM) serves as the registered investment adviser to Schwab ETFs. CSIM and Charles Schwab & Co, Inc. are wholly-owned subsidiaries of the Charles Schwab Corporation, none of which is affiliated with SIDCO.

© 2010 Charles Schwab & Co., Inc. Member SIPC

Photos/Multimedia Gallery Available:


Charles Schwab
Matt Hurwitz, 415-667-0480
SunStar Strategic
Melissa Murphy, 703-894-1056

Multimedia Files:

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Peter Crawford, senior vice president, Charles Schwab (Photo: Business Wire)
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Comparable Expense Ratios: Expense comparison data for non-Schwab ETFs was obtained from the funds' prospectuses as of 7/01/10. Comparisons are made between each Schwab ETF and ETFs in the same asset class from the three largest ETF providers. Expense ratios are subject to change. (Graphic: Business Wire)

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