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Schwab introduces two low-cost ETFs

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

The Schwab US Large-Cap Growth ETF and the Schwab US Large-Cap Value ETF began trading on 11 December.

The first four Schwab ETFs — US Broad Market, US Large-Cap, US Small-Cap and International Equity were launched on 3 November.

As of 9 December, Charles Schwab Investment Management had USD209m 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,” says Peter Crawford, senior vice president at Charles Schwab. “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 per cent. 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 adds. “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 advisers who use Schwab’s custodial services and through Schwab retirement accounts that permit trading of ETFs.

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