Aug. 7, 2002 — Charles Schwab & Co. Inc. (SCH) said it has launched the Schwab Hedged Equity Fund, a new mutual fund that will leverage Schwab equity ratings to invest in both long and short positions in U.S. securities.
Schwab said the fund is designed to provide investors with long-term capital appreciation with less volatility than the broad equity market.
The fund went into subscription August 6 and will commence operations on September 3. During the subscription period, which ends August 30, Schwab clients can invest in the fund at an offering price of $10 per share. The initial minimum investment in the fund is $25,000, with subsequent investment minimums of $5,000. Operating expenses are 2%.
The fund will buy stocks that Schwab believes will outperform the market while at the same time partially offsetting its overall exposure by selling “short” stocks that Schwab believes will under-perform the market to hedge or to reduce the risk of the overall portfolio.