Schwab Asset Management is cutting expense ratios for four equity index ETFs and executing forward share splits in six Schwab mutual funds, the Charles Schwab division announced Monday.
With the ETF fee reductions, effective Tuesday, the cost for all Schwab equity and fixed income market cap-weighted index ETFs will be lower than 10 basis points.
The operating expense ratios for the Schwab 1000 Index ETF (SCHK) and the Schwab International Equity ETF (SCHF) will drop to 0.03% from 0.05% and 0.06% respectively. The operating expense ratio for the Schwab International Small-Cap Equity ETF (SCHC) will drop to 0.08% from 0.11%, while expenses for the Schwab Emerging Markets Equity ETF (SCHE) will decrease to 0.07% from 0.11%.
“Schwab is proud to be a leader in democratizing investing, and we are constantly looking for new opportunities to make investing as accessible as possible,” John Sturiale, product management and innovation head at Schwab Asset Management, said. “Today, we’re taking another important step in advancing our commitment to providing investors with low-cost, high-quality building blocks for a well-diversified portfolio.”
In February, rival Vanguard cut costs for 87 mutual and exchange-traded funds, the largest reduction in its history.
The forward share splits, scheduled for Aug. 15, will boost the number of shares outstanding and lower the net asset value per share. They won't alter rights or change the total value of a shareholder’s investment, nor create a taxable event for shareholders.
A share split wil take place in the Schwab 1000 Index Fund (SNXFX), which will return to a net asset value more closely aligned to its initial share price of $10. Other funds scheduled for share splits are the Schwab U.S. Large-Cap Growth Index Fund (SWLGX), Schwab Total Stock Market Index Fund (SWTSX), Schwab S&P 500 Index Fund (SWPPX), Schwab U.S. Mid-Cap Index Fund (SWMCX) and Schwab U.S. Large-Cap Value Index Fund (SWLVX).
Credit: Diego Radzinschi/ALM
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