Charles Schwab

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Charles Schwab Corporation, based originally in San Francisco, was founded in 1971 by Charles Schwab. The firm began discount brokerage on May 1, 1975. [1]. An investor can implement the precepts advocated in the Bogleheads investment philosophy by choosing index products available on the Schwab platform.

Indexing at Schwab

Schwab manages its own index mutual funds and exchange traded funds (ETFs). As a broker, Schwab provides access to other firm's index funds (usually subject to transaction fees unless the fund is a part of the no-transaction-fee network). Third-party ETFs can be bought with commissions.

The information below was last revised in June, 2011. Writers have striven for accuracy, but investors should verify information before taking action.

Schwab index mutual funds

Charles Schwab manages five index stock mutual funds, [2] with low expense ratios ranging from 9 to 29 basis points:

  • Schwab 1000 Index Fund (SNXFX)
  • Schwab Total Stock Market Index Fund (SWTSX)
  • Schwab S&P 500 Index Fund (SWPPX)
  • Schwab Small-Cap Index Fund (SWSSX)
  • Schwab International Index Fund (SWISX)

The Schwab 1000, Schwab Small Cap, and Schwab International index mutual funds are benchmarked to proprietary benchmarks created by Schwab. The total market index is benchmarked to the Dow Jones Total Market Index.

  • Schwab manages two indexed bond funds, a total bond market index fund (SWLBX) and a short term bond index fund (SWBDX). [4] Expense ratios for bond index funds are 0.29% after waivers.

Schwab exchange traded funds

Schwab offers a growing selection of low cost ETFs (expense ratios range from 4 to 20 basis points), [5] which can be traded with no commissions at Schwab. Schwab manages intermediate-term investment grade and treasury bond index ETFs (short-term; intermediate term; TIPs), US stock market ETFs (broad; large; growth; value; mid; and small) benchmarked to Dow Jones indices, a US REIT index (Dow Jones sector index) and international index ETFs (developed large; developed small; emerging markets) benchmarked to FTSE indices. The table below provides individual ETF expense ratios.

Schwab ETFS
ETF Ticker ER
US stocks
Multi-Cap Core SCHB .04%
Large-Cap Core SCHX .04%
Large-Cap Growth SCHG .07%
Large-Cap Value SCHV .07%
Equity Income SCHD .07%
Mid-Cap Core SCHM .07%
Small-Cap Core SCHA .10%
Real Estate SCHH .07%
International stocks
International Multi-cap Core SCHF .09%
International Small/Mid Core SCHC .19%
Emerging Markets SCHE .14%
US bonds
Intermediate Investment Grade SCHZ .05%
TIPS SCHP .07%
General US Treasury Short-Term SCHO .08%
General US Treasury Intermediate- Term SCHR .10%

Vanguard funds at Schwab

Vanguard mutual funds can be purchased at Schwab's mutual fund supermarket, One Source, with a transaction fee of $49.95 for on-line trades. Vanguard ETFs are more cost efficient, since they can be purchased for the $8.95 commission Schwab charges for on-line stock trades. [6]

Treasury bonds at Schwab

Schwab charges no commissions for on-line treasury bond purchases for both auction purchases and purchases made on the secondary markets. Treasury securities include treasury bills, treasury notes, treasury bonds, and TIPs. [7]

Minimum investment:

  • Treasury Bills, Notes, Bonds, and TIPs - $1,000

See also

References

  1. Charles Schwab Corporation, Wikipedia
  2. Schwab equity index strategies
  3. Charles Schwab RAFI fundamental index funds
  4. Schwab bond funds
  5. Schwab ETFs
  6. Fees and Minimums
  7. Bonds and Fixed Income