Investing in the 1,000 largest U.S. companies will soon be cheaper and the competition between low-cost index providers substantially hotter once Charles Schwab launches its index ETF comprising the 1,000 largest U.S. stocks.
The Schwab 1000 Index ETF (SCHK) will start trading Oct. 11 with an operating expense ratio of just five basis points (0.05%), and it will be available on Schwab ETF OneSource, the firm’s commission-free ETF platform. Comparable ETFs from State Street, Vanguard and iShares charge between 10 and 15 basis points.
The new ETF will be the 22nd fund in Schwab’s ETF lineup. Schwab introduced its first ETF in 2009 and currently has $88 billion in ETF assets. It is the fifth largest ETF provider after BlackRock (iShares), Vanguard, State Street (SPDR) and Invesco (PowerShares).