Market Overview

Schwab Introduces Two New Low-Cost ETFs


Charles Schwab Investment Management, Inc. (CSIM) has launched another two exchange-traded funds with low operating expense ratios and commission-free online trading in Schwab accounts.

The Schwab U.S. Large-Cap Growth ETF (SCHG) and the Schwab U.S. Large-Cap Value ETF (SCHV) began trading on Dec. 11. The first four Schwab ETFs — U.S. Broad Market (SCHB)(FREE stock trend analysis), U.S. Large-Cap (SCHX)(FREE stock trend analysis), U.S. Small-Cap (SCHA)(FREE stock trend analysis) and International Equity (SCHF)(FREE stock trend analysis) were launched Nov. 3.

As of Dec. 9, CSIM had $209 million in assets under management in the first four Schwab ETFs, and trading volume across the four ETFs has averaged approximately 555,000 shares per day since inception.

Two additional Schwab ETFs, covering emerging markets and international small-cap equity, are expected to be launched in January 2010.

“Individual investors and investment advisors count on Schwab for products which provide exceptional value, and our clients have indicated an interest in ETFs as a way to invest in and trade entire segments of the market,” said Peter Crawford, senior vice president at Charles Schwab & Co., Inc. “These two new ETFs allow investors to tilt their portfolios based on whichever style, growth or value, they think will lead the market in the future.”

The new Schwab ETFs have some of the lowest expense ratios in the market — the two new funds each have an expense ratio of 0.15 percent. Like the first four funds, the two new Schwab-managed ETFs can be bought and sold commission-free online in Schwab accounts.

“Investors are attracted to ETFs because they provide a liquid, low-cost and more tax-efficient way to trade segments of the market,” Crawford said. “Commission-free online trades make the Schwab ETFs even more cost-effective, especially for investors who wish to dollar-cost average.”

Commission-free online trading of Schwab ETFs is available to individual investors at Schwab, to the more than 6,000 independent investment advisors who use Schwab’s custodial 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 approximately $210 billion in assets under management as of Sept. 30, 2009. 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 Funds, CSIM is investment adviser for the institutional-style, sub-advised Laudus Fund family. CSIM currently manages 76 mutual funds, including 33 actively-managed funds, in addition to six ETFs and four separate account model portfolios.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq: SCHW)(FREE stock trend analysis) is a leading provider of financial services, with more than 300 offices and 7.6 million client brokerage accounts, 1.5 million corporate retirement plan participants, 687,000 banking accounts, and $1.3 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 (1209-12005)

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.

Exchange Traded Funds 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. Diversification may not protect against investment loss.

Schwab ETFs distributed by SEI Investments Distribution Co (SIDCO). SIDCO is not affiliated with Charles Schwab & Co., Inc. Schwab ETFs are managed by Charles Schwab Investment Management, Inc. (CSIM). SIDCO is not affiliated with CSIM. (2009-4808)

Online trades of Schwab ETFs are commission-free at Schwab, while trades of third-party ETFs are subject to commissions. Broker-Assisted and Automated Phone trades of Schwab ETFs are subject to service charges. Direct Access trades are subject to commissions of $.003 for each share over the first 5,000. Minimum $1,000 deposit is required to open most Schwab brokerage accounts. Waivers may apply. See the Charles Schwab Pricing Guide for details. All ETFs are subject to management fees and expenses. (09-12127)

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