Schwab is cutting costs, again. Charles Schwab Corp. announced January 7 that it will begin charging a flat $8.95 per online trade of equities or non-Schwab exchange traded funds to retail investors, including clients of Schwab Advisor Services-affiliated advisors who use Schwab’s E-Delivery Services.
In addition to the pricing move on trades, Schwab also introduced in the New Year Schwab Managed Portfolios–ETFs, a fee-based advisory service that was scheduled to be launched January 19. These portfolios have an investment minimum of $100,000, and will use ETFs representing up to 20 asset classes, including equities, fixed income, real estate, commodities, and TIPS.
In announcing the moves, Schwab said it expects the lower fees may reduce its Q1 2010 consolidated revenues by “$15 to $20 million.”
As for its ETF family, Schwab Investment Management launched in December two new exchange traded funds to join its four other low-priced ETFs introduced in November that feature no commissions on trades for Schwab customers. The two new funds, each with expense ratios of 0.15%, that began trading on December 11 are the Schwab U.S. Large-Cap Growth ETF (SCHG) and the Schwab U.S. Large-Cap Value ETF (SCHV). The first four Schwab ETFs–U.S. Broad Market (SCHB), U.S. Large-Cap (SCHX), U.S. Small-Cap (SCHA), and International Equity (SCHF)–were launched November 3 by the investment management arm of Charles Schwab Corp.
Charles Schwab Investment Management (CSIM) said the four ETFs launched November 3 had already attracted $209 million as of December 9, with average daily trading volume across the four ETFs of 555,000 shares since their inception. The ETFs for a planned January 2010 launch are one for emerging markets and the other for international small-cap stocks.