Schwab sets $100 buy-in for funds, lowers equity-indexed fund fees
Charles Schwab Investment Management Inc. has lowered expenses on all of its equity index funds and reduced the minimum investment to $100 across all of its funds.
Charles Schwab Investment Management Inc. has lowered expenses on all of its equity index funds and reduced the minimum investment to $100 across all of its funds.
Formerly, the minimum investment ranged from $100 to $50,000.
The new minimum investment improves access for all investors, said Peter Crawford, senior vice president of product management at Schwab.
In addition, the firm reduced the expense ratio for all other bond and equity funds to the lowest expense share class available for each fund.
Expense ratios will now range from 0.35% to 1.72% on these funds, effective yesterday.
The move is geared toward simplifying the fee structures across different share classes.
For the index fund series, the Schwab Total Stock Market Fund (SWTSX), which previously had an expense ratio of 0.38% or 0.53%, depending on the share class; the Schwab S&P 500 Index Fund (SWPPX), which had an expense of 0.19%; and the Schwab Institutional Select S&P 500 Fund (ISLCX), which had an expense of 0.1%, will all now have an expense ratio of 0.09%.
The expense for the Schwab 1000 Fund (SNXFX) was reduced to 0.29%, from 0.34% and 0.49%, depending on the share class. The Schwab International Index Fund’s (SWISX) expense was reduced to 0.19%, from 0.5% or 0.6%, depending on share class; and the Schwab Small-Cap Index Fund (SWSSX) was reduced to 0.19% from 0.42% or 0.57%, depending on share class.
“For the last four or five years, Schwab has been systematically going across our products and services, and improving the value that we provide our clients,” Mr. Crawford said.
“Now we are turning our attention to the Schwab funds to make sure that the products are priced competitively.”
The firm is able to cut expenses because of the scale of its business, Mr. Crawford said.
“We have very efficient economies of scale that we are able to pass through to our clients,” he said
Charles Schwab Investment Management, a division of The Charles Schwab Corp. in San Francisco, had $236 billion in assets under management as of Dec. 31.
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