Charles Schwab (SCHW) has broadsided the ETF marketplace with rock bottom expense ratios along with commission free trading. And this time, it's more of the same.
The San Francisco, CA-based firm announced the launch of Schwab ETF OneSource- a new ETF platform that gives investors and advisors access to the most commission-free ETFs anywhere in the industry.
Beginning today, Schwab clients can buy and sell 105 ETFs with $0 online trade commissions. The offering spans major asset classes, with funds from leading providers, including State Street SPDR ETFs, Guggenheim Investments, PowerShares, ETF Securities, United States Commodity Funds, and Charles Schwab Investment Management.
"Just as Schwab Mutual Fund OneSource changed the landscape for investors and advisors by providing convenient, affordable access to leading mutual funds when Chuck Schwab introduced it twenty years ago, we believe Schwab ETF OneSource will deliver enormous benefit and change the way our clients buy and sell ETFs," said Walt Bettinger, CEO of Charles Schwab.
ETFs added to the company's commission free trading platform include funds like the Guggenheim S&P 500 Equal Weight ETF (RSP), PowerShares S&P 500 Low Volatility ETF (SPLV), Guggenheim BRIC ETF (EEB), PowerShares Emerging Markets Sovereign Debt ETF (PCY), and the ETFS Physical Precious Metals Basket Shares (GLTR).
Bettinger emphasized that Schwab clients who buy ETFs online through Schwab ETF OneSource will pay exactly the same operating expense ratios (OERs) they would elsewhere, but without paying a commission.
He added, "Awareness and popularity of ETFs have been growing steadily across the range of investors and advisors. Whether there is interest in broad-based exposure to equity markets, access to a single asset class, or a specific fund that seeks to reduce volatility - Schwab ETF OneSource offers a solution - and we're helping investors put more of their money to work for them. It's another example of Schwab challenging the status quo to bring greater value to our clients."
According to the 2012 ETF Investor Study by Charles Schwab, released in October of last year, cost is the number one factor investors look at when selecting ETFs. Investors surveyed said they pay the most attention to OERs, followed by trade commissions. Nearly 40% say the ability to trade ETFs commission-free is either 'most important' or 'very important.'
The same study revealed that investor usage of ETFs is going strong, with 41% planning to invest more in ETFs this year. At the same time, there is a distinct need for investor education, with 45% calling themselves novices when it comes to understanding ETFs.
Total assets in U.S. listed ETFs stand at $1.4 trillion.
Schwab ETFs, which can be bought and sold commission-free online in Schwab accounts, had $8.6 billion in assets as of December 31, 2012.
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