How Charles Schwab ETFs Hit $100 Billion AUM

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Money managers like Charles Schwab have charged into the ETF industry by catering toward client needs, bringing to market many tried and true strategies that have worked well within their own management businesses.

"We tend to curate a small number of ETFs that we really try to make sure will fit big needs in a client's portfolio," Jonathan De St. Paer, Head of Strategy and Product Development for Charles Schwab Investment Management, said at the Inside ETFs 2018 conference. "If it gets large scale, we can pass the benefit of that scale in exceedingly low prices. We really like that recipe because that works for our investors, first and foremost, and also works for us as a firm."

Charles Schwab is now the fifth largest ETF provider on the market, with $104 billion in ETF assets under management. The firm is also known for its ultra cheap passive index-based ETFs that help investors gain broad market exposure.

For instance, Schwab offers some of the cheapest U.S.-listed ETFs on the market, including the Schwab U.S. Large-Cap ETF (NYSEArca: SCHX) and Schwab U.S. Broad Market ETF (NYSEArca: SCHB), which both come with a 0.03% expense ratio.

Charles Schwab has also been growing its ETF business through commission-free ETF trades on its ETF OneSource platform, which provides free trades on over 200 ETFs from 16 fund providers, including Schwab’s own suite of ETFs. There are now more assets in ETFs on Charles Schwab's platform than any other out there.

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