Charles Schwab & Co. announced Wednesday the release of an exchange-traded funds “Select List,” a tool designed to help retail investors break through the thicket of ETFs that have sprung up in the marketplace and find low-cost funds suitable for their portfolios.
“With a thousand ETFs now available and more coming out weekly, investors tell us that selecting an ETF can be an overwhelming experience,” said Beth Flynn, Schwab vice president of ETF platform development, in a statement. “Our goal is to help our clients make informed choices about these increasingly popular investment vehicles.”
Flynn said in a separate interview that the quarterly ETF Select List’s “design target” is average retail investors looking to put $5,000 into an ETF and hold onto the investment for at least a year.
Created by Charles Schwab Investment Advisory Inc. (CSIA), the Select List filters all of the ETFs in the marketplace to highlight pre-screened, low-cost funds that can be used to fill portfolio gaps. CSIA, a Schwab affiliate, is an independent registered investment advisor (RIA) and serves as the investment advisor for Schwab Managed Portfolios.
To accompany the Select List, Schwab published a companion piece, The ETF Investor: 2010 in Review, a collection of research from CSIA that offers data on ETF usage by Schwab retail investors and advisor clients. The review, which functions as an advanced primer explaining everything from ETF operating expenses to equity ETFs and beyond, supports RIAs’ efforts to educate individual investors about ETFs. It is available to advisors who custody with Schwab through SchwabAdvisorCenter.com.
Michael Iachini (left), CSIA’s director of Investment Manager Research, is the author of the review's commentary as well as the ETF Select List’s fund picker. Iachini recommends that RIAs use the ETF Select List as a tool to validate their own research.
To be eligible for the Schwab ETF Select List, a fund must meet certain minimum requirements for criteria such as assets under management, length of