Market Overview

Schwab ETF Fees Hit Rock Bottom


Discount broker Charles Schwab (NYSE: SCHW), sponsor to some of the least expensive ETFs on the market, is making some of those funds even cheaper. In a filing with the Securities and Exchange Commission, Schwab outlined fee cuts a wide array of its ETFs.

Among the Schwab funds with lower expense ratios will be two of the firm's most popular products. The Schwab U.S. Broad Market ETF (NYSE: SCHB) will see its fee reduced to 0.04 percent per year from 0.06 percent. The annual expense ratio on the Schwab U.S. Large-Cap ETF (NYSE: SCHX) goes to 0.04 percent from 0.08 percent. SCHB has $1.1 billion in assets under management while SCHX had $887.5 million in AUM at the end of August.

The Schwab U.S. Large-Cap Growth ETF (NYSE: SCHG), Schwab U.S. Large-Cap Value ETF (NYSE: SCHV). Schwab U.S. REIT ETF (NYSE: SCHH) and the Schwab U.S. Mid-Cap ETF (NYSE: SCHM) will see annual fees reduced to 0.07 percent from 0.13 percent.

The Schwab U.S. Small-Cap ETF (NYSE: SCHA) goes down three basis points to 0.1 percent from 0.13 percent. In the dividend space, Schwab slashed the expense ratio on the Schwab U.S. Dividend Equity ETF (NYSE: SCHD) to 0.07 percent from 0.17 percent.

Schwab also reduced expenses on several of its international funds, including the Schwab International Equity ETF (NYSE: SCHF), which is going to 0.09 percent from 0.13 percent. The Schwab International Small-Cap Equity ETF (NYSE: SCHC) will now have an expense ratio of 0.2 percent down from 0.35 percent.

Interestingly, the Vanguard MSCI Emerging Markets ETF (NYSE: VWO) has lost the title of cheapest emerging markets ETF. That honor now goes to the Schwab Emerging Markets Equity ETF (NYSE: SCHE), which will now charge 0.15 percent compared with 0.25 percent in the past.

Fees on the Schwab U.S. TIPS ETF (NYSE: SCHP) were cut in half to 0.07 percent from 0.14 percent. The Schwab Short-Term U.S. Treasury ETF (NYSE: SCHO) goes to 0.08 percent from 0.12 percent while the Schwab Intermediate-Term U.S. Treasury ETF (NYSE: SCHR) will now charge 0.1 percent compared with 0.12 percent in the past.

The Schwab U.S. Aggregate Bond ETF (NYSE: SCHZ) also cut its fees in half to 0.05 percent from 0.1 percent while the Schwab U.S. REIT ETF (NYSE: SCHH) will now charge 0.07 percent, down from 0.13 percent.

All that on top of the fact that Schwab offers all of its ETFs on a commission-free basis to its clients.

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