Published September 21, 2012
Discount broker Charles Schwab (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 (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 (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 (SCHG), Schwab U.S. Large-Cap Value ETF (SCHV). Schwab U.S. REIT ETF (SCHH) and the Schwab U.S. Mid-Cap ETF (SCHM) will see annual fees reduced to 0.07 percent from 0.13 percent.
The Schwab U.S. Small-Cap ETF (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 (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 (SCHF), which is going to 0.09 percent from 0.13 percent. The Schwab International Small-Cap Equity ETF (SCHC) will now have an expense ratio of 0.2 percent down from 0.35 percent.
Interestingly, the Vanguard MSCI Emerging Markets ETF (VWO) has lost the title of cheapest emerging markets ETF. That honor now goes to the Schwab Emerging Markets Equity ETF (SCHE), which will now charge 0.15 percent compared with 0.25 percent in the past.
Fees on the Schwab U.S. TIPS ETF (SCHP) were cut in half to 0.07 percent from 0.14 percent. The Schwab Short-Term U.S. Treasury ETF (SCHO) goes to 0.08 percent from 0.12 percent while the Schwab Intermediate-Term U.S. Treasury ETF (SCHR) will now charge 0.1 percent compared with 0.12 percent in the past.
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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