Schwab ETF's ticker symbols and expense ratios announced

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MnD
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Schwab ETF's ticker symbols and expense ratios announced

Post by MnD » Thu Oct 29, 2009 11:58 am

Fund
Ticker
Index
Expense Ratio

Schwab U.S. Broad Market ETF
SCHB
Dow Jones U.S. Broad Stock Market Index
0.08%

Schwab U.S. Large-Cap ETF
SCHX
Dow Jones U.S. Large-Cap Total Stock Market Index
0.08%

Schwab U.S. Large-Cap Growth ETF
SCHG
Dow Jones U.S. Large-Cap Growth Total Stock Market Index
0.15%

Schwab U.S. Large-Cap Value ETF
SCHV
Dow Jones U.S. Large-Cap Value Total Stock Market Index
0.15%

Schwab U.S. Small-Cap ETF
SCHA
Dow Jones U.S. Small-Cap Total Stock Market Index
0.15%

Schwab International Equity ETF
SCHF
FTSE Developed ex-US Index
0.15%

Schwab International Small Cap Equity ETF
SCHC
FTSE Developed Small Cap ex-US Liquid Index
0.35%

Schwab Emerging Markets Equity ETF
SCHE
FTSE All-Emerging Index
0.35%

Tramper Al
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Post by Tramper Al » Thu Oct 29, 2009 12:03 pm

Nothing really grabs me as being either innovative or inexpensive. Am I missing something, or is Schwab just several years late to the table with this?

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Post by MnD » Thu Oct 29, 2009 12:15 pm

Nothing innovative about a 2% cash back Visa, high yield checking and savings linked to brokerage accounts, low cost ETF's, very competitive mortgages and HELOC's etc.

What Schwab seems to be doing is trying to create competitive offerings in just about every area of retail banking and investing even if it means adding some "me too" offerings. A lot of money in plain-vanilla ETF's are in funds that charge much more than ER's like these.

Schwab used to be just my broker. Now I take a look at them at least for just about all my financial dealings.

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Post by Tramper Al » Thu Oct 29, 2009 12:29 pm

MnD wrote:Nothing innovative about a 2% cash back Visa, high yield checking and savings linked to brokerage accounts, low cost ETF's, very competitive mortgages and HELOC's etc.

What Schwab seems to be doing is trying to create competitive offerings in just about every area of retail banking and investing even if it means adding some "me too" offerings. A lot of money in plain-vanilla ETF's are in funds that charge much more than ER's like these.

Schwab used to be just my broker. Now I take a look at them at least for just about all my financial dealings.

OK, I didn't see the OP as a pitch for Schwab in general. I do appreciate the info on new ETFs. Since one need not be a Schwab brokerage customer to buy a Schwab ETF, and you are in the know on this, could you please help some of the rest of us by pointing out which of these ETFs have lower ERs than the usual competition? Thanks!

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curiouskitty
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Post by curiouskitty » Thu Oct 29, 2009 12:31 pm

MnD wrote:Nothing innovative about a 2% cash back Visa, high yield checking and savings linked to brokerage accounts, low cost ETF's, very competitive mortgages and HELOC's etc.

What Schwab seems to be doing is trying to create competitive offerings in just about every area of retail banking and investing even if it means adding some "me too" offerings. A lot of money in plain-vanilla ETF's are in funds that charge much more than ER's like these.

Schwab used to be just my broker. Now I take a look at them at least for just about all my financial dealings.


Exactly. The $100 minimum index funds with ERs between 0.09 and 0.29, 2% cashback Visa, ATM refunds, excellent website, and now a pretty broad line of ETFs. Schwab is making a lot of changes.

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curiouskitty
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Post by curiouskitty » Thu Oct 29, 2009 12:34 pm

Tramper Al wrote:
MnD wrote:Schwab used to be just my broker. Now I take a look at them at least for just about all my financial dealings.

OK, I didn't see the OP as a pitch for Schwab in general. I do appreciate the info on new ETFs. Since one need not be a Schwab brokerage customer to buy a Schwab ETF, and you are in the know on this, could you please help some of the rest of us by pointing out which of these ETFs have lower ERs than the usual competition? Thanks!


Isn't SCHX at a .08% ER direct competition for VTI (which has a .09% ER)?

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Post by Tramper Al » Thu Oct 29, 2009 12:36 pm

curiouskitty wrote:Isn't SCHX at a .08% ER direct competition for VTI (which has a .09% ER)?

Wouldn't it be SCHB? Same low ER, though. Thanks.

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Taylor Larimore
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Schwab's new low-cost index funds

Post by Taylor Larimore » Thu Oct 29, 2009 12:39 pm

Hi MNd:

Schwab ETF's ticker symbols and expense ratios announced


Schwab investors can thank Jack Bogle.
"Simplicity is the master key to financial success." -- Jack Bogle

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curiouskitty
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Post by curiouskitty » Thu Oct 29, 2009 12:41 pm

Tramper Al wrote:
curiouskitty wrote:Isn't SCHX at a .08% ER direct competition for VTI (which has a .09% ER)?

Wouldn't it be SCHB? Same low ER, though. Thanks.


I wasn't sure on the difference between Broad Market and Total Market. Is SCHX exclusively large-caps? If so, it seems odd to name it Total Stock Market.

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Post by MnD » Thu Oct 29, 2009 12:43 pm

Tramper Al wrote:Since one need not be a Schwab brokerage customer to buy a Schwab ETF, and you are in the know on this, could you please help some of the rest of us by pointing out which of these ETFs have lower ERs than the usual competition? Thanks!


The international small cap has lower ER than VSS at .35 versus .38, but it doesn't include emerging market small cap like VSS does.
Head to head, the Schwab small cap international offering beats GWX (.59) and SCZ (.40)

All these funds mght be good options for tax loss harvesting. I tax loss harvested the Vanguard emerging market ETF into EEM in March, then the emerging market sector exploded and now I'm stuck in higher ER EEM unless I want to realize a big (81%) taxable gain.

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Re: Schwab's new low-cost index funds

Post by Opponent Process » Thu Oct 29, 2009 1:13 pm

Taylor Larimore wrote:Hi MNd:

Schwab ETF's ticker symbols and expense ratios announced


Schwab investors can thank Jack Bogle.


no kidding. I don't look at the Fido/Schwab moves with skepticism. I just see it as the inevitable butterfly effect of Bogle.
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Taylor Larimore
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Definition of the "butterfly effect"

Post by Taylor Larimore » Thu Oct 29, 2009 1:27 pm

Opponent Process:

I had to look it up:

Butterfly Effect: Small variations of the initial condition of a dynamical system may produce large variations in the long term behavior of the system. -- Wakipidia


Thank you.
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Post by Doc » Thu Oct 29, 2009 2:05 pm

Tramper Al wrote:Nothing really grabs me as being either innovative or inexpensive. Am I missing something, or is Schwab just several years late to the table with this?

Since Schwab offers a very large group of products and unlike Vanguard is a for profit company they can afford to take a smaller profit or even a loss in some product lines. What these products do is to divide the relatively fixed market into more pieces making it therefore harder for others to meet their expenses. The firms that will be hit the hardest are the "not for profit" firms like Vanguard which have no where else to make up the loss and that will therefore force Vg to increase their e/r which in turn will make more people turn to Schwab which will force Vg to again raise its e/r ... And after a while Schwab is making a profit and Vg is looking for a paddle.

It's why old established firms with high legacy costs go bankrupt while the young upstarts don't charge you for luggage. They call it competion in the captalist market system.:D
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Post by tc101 » Thu Oct 29, 2009 2:14 pm

My problem with Schwab is the constant bait and switch. Twice I have opened high yielding bank accounts with them. A few months later the yield goes down. Then a year later there is some new account with a high yield, but the one I opened the previous year still has the low yield.
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Post by Doc » Thu Oct 29, 2009 2:25 pm

tc101 wrote:My problem with Schwab is the constant bait and switch. Twice I have opened high yielding bank accounts with them. A few months later the yield goes down. Then a year later there is some new account with a high yield, but the one I opened the previous year still has the low yield.

OK. Let's see. You've been chasing the high yield of the most recent fund or account that you see and it hasn't turned out too well. And you expect sympathy on the Bogleheads forum? :P
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Post by ScottW » Thu Oct 29, 2009 2:40 pm

curiouskitty wrote:I wasn't sure on the difference between Broad Market and Total Market. Is SCHX exclusively large-caps? If so, it seems odd to name it Total Stock Market.


Dow Jones has an entire line of U.S. indexes that are branded "Total Stock Market", even though most of them are subsets or style variations of the market.

The Broad Market Index is their TSM without microcaps. It contains 2500 stocks instead of the TSM index, which has 4300.

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Post by Doc » Thu Oct 29, 2009 2:45 pm

ScottW wrote:
curiouskitty wrote:I wasn't sure on the difference between Broad Market and Total Market. Is SCHX exclusively large-caps? If so, it seems odd to name it Total Stock Market.


Dow Jones has an entire line of U.S. indexes that are branded "Total Stock Market", even though most of them are subsets or style variations of the market.

The Broad Market Index is their TSM without microcaps. It contains 2500 stocks instead of the TSM index, which has 4300.


Dow Jones http://www.djindexes.com/totalstockmarket/ wrote:U.S. Indexes
The Dow Jones U.S. Total Stock Market IndexesSM are designed to provide comprehensive coverage of the U.S. equity market. The flagship index of the family, the Dow Jones U.S. Total Stock Market IndexSM, is an all-inclusive measure composed of all U.S. equity securities with readily available prices. This broad index is sliced according to stock-size segment, style and sector to create distinct subindexes that track every major segment of the market.


Its like the Barclays Aggregate bond Index which is the broad index which then is broken down into sub-sectors.
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Post by sportal » Thu Oct 29, 2009 2:53 pm

I wanted to see a direct comparison to Vanguard closest ETFs to see if there was anything to get excited about, so I created this list.

Summary = Nothing interesting. Perhaps a good choice if you need to tax loss harvest. It looks like Schwab looked at Vanguard's ER when deciding where to set their's.

0.08% - SCHB - 2494 Constituents - Schwab U.S. Broad Market ETF - Dow Jones U.S. Broad Stock Market Index
0.09% - VTI - 3385 Stocks - Vanguard Total Stock Market ETF - MSCI US Broad Market Index
= Vanguard's Total is a bit Broader.

0.08% - SCHX - 747 Constituents - Schwab U.S. Large-Cap ETF - Dow Jones U.S. Large-Cap Total Stock Market Index
0.13% - VV - 756 Stocks - Vanguard Large-Cap ETF - MSCI US Prime Market 750 Index
= Roughly the same constituents for 0.05% cheaper.

0.15% - SCHG - 426 Constituents - Schwab U.S. Large-Cap Growth ETF - Dow Jones U.S. Large-Cap Growth Total Stock Market Index
0.15% - VUG - 428 Stock - Vanguard Growth ETF - MSCI US Prime Market Growth Index

0.15% - SCHV - 321 Constituents - Schwab U.S. Large-Cap Value ETF - Dow Jones U.S. Large-Cap Value Total Stock Market Index
0.15% - VTV - 442 Stocks - Vanguard Value ETF - MSCI US Prime Market Value Index

0.15% - SCHA - 1747 Constituents - Schwab U.S. Small-Cap ETF - Dow Jones U.S. Small-Cap Total Stock Market Index
0.15% - VB - 1749 Stocks - Vanguard Small-Cap ETF - MSCI US Small Cap 1750 Index

0.15% - SCHF - 1339 Constituents (23 Countries) - Schwab International Equity ETF - FTSE Developed ex-US Index
0.16% - VEA - 943 Stocks (21 Countries) - Vanguard Europe Pacific ETF - MSCI EAFE Index
= FTSE gets 2 more countries and 400 more constituents

0.35% - SCHC - Schwab International Small Cap Equity ETF - FTSE Developed Small Cap ex-US Liquid Index
0.38% - VSS - Vanguard FTSE AW ex-US Sm-Cap ETF
= FTSE AW All World includes emerging markets

0.35% - SCHE - Schwab Emerging Markets Equity ETF - FTSE All-Emerging Index
0.27% - VWO - Vanguard Emerging Markets ETF - MSCI Emerging Markets Index

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Post by Doc » Thu Oct 29, 2009 3:05 pm

sportal wrote:I wanted to see a direct comparison to Vanguard closest ETFs to see if there was anything to get excited about, so I created this list.

Can somebody refresh my memory. Didn't Vanguard use the S&P (Barra) indexes until a few years ago when they switched to MSCI who "created" new indexes specifically for Vanguard? And the reason was either 1) Vanguard wanted a broader measure of growth/value or 2) S&P was asking too high a fee to suit Vanguard? This last is interesting since now Schwab is using the "higher fee" indexes to compete with Vanguards "low fee" indexes and Schwab is doing it at a lower cost to the investor.
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Post by Tramper Al » Thu Oct 29, 2009 3:16 pm

sportal wrote:I wanted to see a direct comparison to Vanguard closest ETFs to see if there was anything to get excited about, so I created this list.

Thanks.

It is true that when I look to putting some new money into a stock ETF in a particular sub-class, I do give the ER a lot of consideration. However, when my choice is between an iShares, SPDR, or Vanguard ETF trading at huge volumes every day with a tiny spread, compared with a brand new product with low volumes and a (relatively) large spread, often a small ER advantage doesn't sway me at all.

And I find that for TLH in most of these sub-classes there are already enough choices.

I welcome Schwab at the ETF table, though it does kind of look like simple branding of the same old (great) products to keep Schwab brokerage customers in house when then come in off the street asking about ETFs.

I'm actually pretty surprised that Fidelity has not joined the ETF bandwagon yet. Not sure what they are thinking.

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Post by Sammy_M » Fri Oct 30, 2009 8:34 am

These ETFs are not just another share class of an index fund, like many of the Vanguard ETFs, correct? If correct, one might take into consideration the tax advantages of 100% ETF structure. Advantages include better ability to manage cap gains. On the flip side, there are cashflow management advantages to Vanguards combined ETF/Index vehicles.

Side note: I still can't understand why, with all these ETF players, that none of them offer an decent Intl Small Value option. DLS is all we non-DFA'ers have. :(

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Post by Doc » Fri Oct 30, 2009 10:39 am

Sammy_M wrote:Side note: I still can't understand why, with all these ETF players, that none of them offer an decent Intl Small Value option. DLS is all we non-DFA'ers have. :(

I don't know why a US investor would care. Unless you are way way overweight in foreign and small cap value there is just not going to be enough of such an ETF to have much of an impact on your total portfolio. This may be why you don't find an ETF - just little interest. Morningstar only shows 76 funds in the Foreign Small/Mid Value category. The stale pricing issue would also be a drawback for this asset class.
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Post by ddb » Fri Oct 30, 2009 11:22 am

Doc wrote:
Sammy_M wrote:Side note: I still can't understand why, with all these ETF players, that none of them offer an decent Intl Small Value option. DLS is all we non-DFA'ers have. :(

I don't know why a US investor would care. Unless you are way way overweight in foreign and small cap value there is just not going to be enough of such an ETF to have much of an impact on your total portfolio. This may be why you don't find an ETF - just little interest. The stale pricing issue would also be a drawback for this asset class.


Yup, if the perceived demand were there, the fund companies would be clamoring to enter the market. DLS, as the closest option to foreign small value, has less than $400 million in assets nearly 3.5 years into its endeavor - not exactly a smashing success.

[tangent]
Then again, from WisdomTree's perspective, DLS is their 4th largest offering. It appears that 31 out of 51 of their ETFs have total assets of less than $100 million (26 of those 31 have total assets of less than $50 million).

Still, I wonder if WT's business model is quietly brilliant. They create their own indices, so they have no index licensing fees. Their website is pretty basic, they have a small marketing budget (at least based on my observation of never seeing or hearing about them anywhere), and I assume they have relatively small operations. With total assets just north of $5 billion at an average expense ratio around 0.4%, that's $20 billion of revenue with apparently limited costs.

[/tangent]

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Post by Sammy_M » Fri Oct 30, 2009 11:26 am

Doc wrote:I don't know why a US investor would care. Unless you are way way overweight in foreign and small cap value there is just not going to be enough of such an ETF to have much of an impact on your total portfolio. This may be why you don't find an ETF - just little interest. Morningstar only shows 76 funds in the Foreign Small/Mid Value category. The stale pricing issue would also be a drawback for this asset class.

I can't speak for others, but this is why it's on my wish list:

I small/value tilt. I try to diversify where I'm getting the small and value exposure. In the US its easy, but I'm aware of only two practical ways to SV tilt abroad using index funds:
(1) EFV + an Intl Small.
(2) VEA + DLS.

I'm not big on DLS given its that it's dividend weighted.
EFV has an expense ratio of 0.40 vs. VEA's at 0.16, plus VEA is tax managed.

It'd be nice to have a good ISV option to pair with VEA. That's all I'm say'n. Instead of providing offerings that are virtually identical to competitors' offerings, why not offer something different and fill a void?

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Post by SP-diceman » Fri Oct 30, 2009 7:25 pm

Its interesting.

From what I can see most Bogleheads want others to adopt a
Boglehead philosophy.

They typically mock:
Market timing
High fees
Active management
Poor diversification

Then when someone offers this. Its viewed as a threat to Vanguard.

I think it should be applauded when anyone embraces low cost
indexing.


Thanks
SP-diceman

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Post by stratton » Sat Oct 31, 2009 2:44 am

SP-diceman wrote:Its interesting.

From what I can see most Bogleheads want others to adopt a
Boglehead philosophy.
...
Then when someone offers this. Its viewed as a threat to Vanguard.

I think it should be applauded when anyone embraces low cost
indexing.

You beat me to it.

The view of competition as a threat to Vanguard is a bit hypocritical.

Paul

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Post by MnD » Mon Nov 02, 2009 1:44 pm

Commission-free trading for Schwab customers with Schwab ETF's.

NEW YORK, Nov 2 (Reuters) - Discount brokerage Charles Schwab Corp (SCHW.O) unveiled a line of eight index- tracking, exchange-traded funds on Monday with managements fees mostly lower than competing ETFs from State Street, Barclays and Vanguard.

Schwab, the nation's largest discount brokerage, also said it would let its own customers trade its new funds commission free.
Schwab Chief Executive Walter Bettinger said the first set of funds was "only the first step" and promised "additional ETF solutions very soon."

-snip-

He compared the commission free offering to Schwab's move to start selling mutual funds without a commission about 20 years ago.

Schwab starts out at the back of the pack among ETF managers. Barclays and state street already manage several hundred billion dollars of ETFs.

Schwab said about 20 percent of all ETF trading by small investors already occurs at its brokerage service.

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Post by Tramper Al » Mon Nov 02, 2009 1:55 pm

MnD wrote:Commission-free trading for Schwab customers with Schwab ETF's.

There you go, that might help.

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Post by Sammy_M » Mon Nov 02, 2009 3:47 pm

MnD wrote:Commission-free trading for Schwab customers with Schwab ETF's.

Very nice. They just bumped Fidelity out for the #2 spot on my best brokers list.

#1. Wells Trade PMA (pros: 100 free trades per year on all funds and ETFs; cons: lousy bond commissions -- $49 per trade, mediocre website)

#2. Schwab (pros: free ETF trades on schwab low-cost ETFs, other ETF commissions reasonable -- $13, no commissions on treasuries and generally the best bond platform, nice website; cons: just hard to beat W/T's deal)

#3 Fidelity (pros: free trades on Spartan low-cost Index funds, other ETF commissions reasonable -- $11 to 20, no commissions on treasuries, nice website, great retirement specialists; cons: big spreads on treasuries, can't match W/T's or (now) Schwab's deal.

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Post by indexfundfan » Mon Nov 02, 2009 4:30 pm

MnD wrote:Commission-free trading for Schwab customers with Schwab ETF's.

NEW YORK, Nov 2 (Reuters) - Discount brokerage Charles Schwab Corp (SCHW.O) unveiled a line of eight index- tracking, exchange-traded funds on Monday with managements fees mostly lower than competing ETFs from State Street, Barclays and Vanguard.

Schwab, the nation's largest discount brokerage, also said it would let its own customers trade its new funds commission free.
Schwab Chief Executive Walter Bettinger said the first set of funds was "only the first step" and promised "additional ETF solutions very soon."

-snip-

He compared the commission free offering to Schwab's move to start selling mutual funds without a commission about 20 years ago.

Schwab starts out at the back of the pack among ETF managers. Barclays and state street already manage several hundred billion dollars of ETFs.

Schwab said about 20 percent of all ETF trading by small investors already occurs at its brokerage service.

Wow, this is great. I sure hope I can buy these ETFs in my 401(k) PCRA account commission-free! Hopefully, there would be substantial trade volume to reduce trading spreads.
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Post by curiouskitty » Mon Nov 02, 2009 4:45 pm

MnD wrote:Schwab, the nation's largest discount brokerage, also said it would let its own customers trade its new funds commission free.


I can't believe it! This is fantastic news and explains how Schwab will convince investors to buy the ETFs directly instead of using an alternative broker.

How long do you think we'll have to wait for the spreads on these to come down far enough that it's cheaper to buy these than the corresponding Schwab funds?

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Post by Doc » Mon Nov 02, 2009 7:29 pm

curiouskitty wrote: How long do you think we'll have to wait for the spreads on these to come down far enough that it's cheaper to buy these than the corresponding Schwab funds?

Two business days for the large cap funds. Just long enough for the programmers to update the stock list for their programmed trade software.

On second thought it won't take that long because Schwab probably had a pre-release leak of the info to give the traders a headstart.
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Post by KarlJ » Mon Nov 02, 2009 8:47 pm

Sammy_M wrote:
Schwab ... no commissions on treasuries and generally the best bond platform.


I take it that no commissions on treasuries refer to auctions, is this done completely online or through a bond specialist? I have heard that there is more transparency on bond pricing especially on the secondary market at Fidelity than at Schwab, is that your experience?

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Post by hmm... » Mon Nov 02, 2009 9:10 pm

I have a bank account with Schwab and they mentioned no minimums for their ETFs. How exactly do you make money from this? I am assuming the price changes in value, but do you receive dividends, too?

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Post by Sammy_M » Tue Nov 03, 2009 8:22 am

KarlJ wrote:
Sammy_M wrote:
Schwab ... no commissions on treasuries and generally the best bond platform.


I take it that no commissions on treasuries refer to auctions, is this done completely online or through a bond specialist? I have heard that there is more transparency on bond pricing especially on the secondary market at Fidelity than at Schwab, is that your experience?


No commission for auctions or secondary market if you place web orders. $25 if you use a specialist. See here. When considering 'no commissions' bear in mind that both Fidelity and Schwab are marking up the bonds.

I've bought TIPS on the secondary market at Fidelity and have not been impressed with the large spreads. Others here have commented on the same. I've tried selling some 4/2011 TIPS half a dozen times now using a reasonable limit order (3X closer to the mid - see grok's description and comment) and it's yet to be filled.

I've never used Schwab for bonds, but I recall Larry Swedroe speaking favorably of them. You could probably search the forum for "larryswedroe schwab" and turn up something.

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Post by Doc » Tue Nov 03, 2009 10:09 am

Sammy_M wrote: No commission for auctions or secondary market if you place web orders. $25 if you use a specialist. See here. When considering 'no commissions' bear in mind that both Fidelity and Schwab are marking up the bonds.

There is no way to sell a bond on line at Schwab so you are forced to the specialist and have the $25 fee. But most of us hold to maturity. Schwabs secondary Treasury price is very competitive with Vanguard if you correct for commission. Schwabs final cost is usually a little better but not by much. Fido's spread contains the commission and may seem high but it is my understanding that the price can be reduced if you place limit offers. In my experience at Vanguard if you place a limit order it gets cancelled more often than not unless you talk to a specialist (and pay a higher commission?)
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Post by FD » Tue Nov 03, 2009 11:15 am

I tried it in my taxable account and PCRA (401K) account and it works...no commission.

Another advantage for my moving average indicators.

It all started about a year ago when I opened my Visa 2% cash back...and now got already about a $1000 in credits for 2009.

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Doc
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Post by Doc » Tue Nov 03, 2009 2:56 pm

Doc wrote:
curiouskitty wrote: How long do you think we'll have to wait for the spreads on these to come down far enough that it's cheaper to buy these than the corresponding Schwab funds?

Two business days for the large cap funds. Just long enough for the programmers to update the stock list for their programmed trade software.

On second thought it won't take that long because Schwab probably had a pre-release leak of the info to give the traders a headstart.


After five hours of trading the premium/discount is about 100 bps in both directions. The bid/asked spread is about 12 bps. Boy was I pessimistic. :lol:
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curiouskitty
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Post by curiouskitty » Tue Nov 03, 2009 3:19 pm

Doc wrote:
Doc wrote:
curiouskitty wrote: How long do you think we'll have to wait for the spreads on these to come down far enough that it's cheaper to buy these than the corresponding Schwab funds?

Two business days for the large cap funds. Just long enough for the programmers to update the stock list for their programmed trade software.

On second thought it won't take that long because Schwab probably had a pre-release leak of the info to give the traders a headstart.


After five hours of trading the premium/discount is about 100 bps in both directions. The bid/asked spread is about 12 bps. Boy was I pessimistic. :lol:


Great news about the bid/ask spread.

Do you mean you lose 100 bps on buying and selling or do you mean that you lose it one way and gain it back the other? What's the best way of finding the current premium/discount?

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Doc
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Post by Doc » Tue Nov 03, 2009 3:50 pm

curiouskitty wrote:
Doc wrote:
Doc wrote:
curiouskitty wrote: How long do you think we'll have to wait for the spreads on these to come down far enough that it's cheaper to buy these than the corresponding Schwab funds?

Two business days for the large cap funds. Just long enough for the programmers to update the stock list for their programmed trade software.

On second thought it won't take that long because Schwab probably had a pre-release leak of the info to give the traders a headstart.


After five hours of trading the premium/discount is about 100 bps in both directions. The bid/asked spread is about 12 bps. Boy was I pessimistic. :lol:


Great news about the bid/ask spread.

Do you mean you lose 100 bps on buying and selling or do you mean that you lose it one way and gain it back the other? What's the best way of finding the current premium/discount?


I meant that there has been both a premium and discount today of about 100 bps. You can find the symbol for the Incative NAV ob eht ETFs website. It is usually something like xyz.iv

Yahoo puts a "^" in front and changes the "." to "-"

"http://finance.yahoo.com/echarts?s=schx#chart1:symbol=schx;range=1d;compare=^schx-iv;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined"

You have to cut and paste the URL. It is too long.
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Kenster1
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Post by Kenster1 » Wed Nov 04, 2009 11:07 pm

Schwab has put up a nice comparison chart....

https://www.schwabetfs.com/aboutETFs.asp

Looks like they're marketing their own ETFs to stand for Everyone Trades Free at Schwab.
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Gotadimple
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Post by Gotadimple » Thu Nov 05, 2009 11:19 am

All of this analysis is good for now. However, if you look at the prospectus for any of these funds you will see a 12-b-1 charge of .25% which is waived until 2011.

At that point, is Schwab the better choice? Also, I haven't looked at the Vangard products, are we actually comparing the same index in each product?

Rita

sportal wrote:I wanted to see a direct comparison to Vanguard closest ETFs to see if there was anything to get excited about, so I created this list.

Summary = Nothing interesting. Perhaps a good choice if you need to tax loss harvest. It looks like Schwab looked at Vanguard's ER when deciding where to set their's.

0.08% - SCHB - 2494 Constituents - Schwab U.S. Broad Market ETF - Dow Jones U.S. Broad Stock Market Index
0.09% - VTI - 3385 Stocks - Vanguard Total Stock Market ETF - MSCI US Broad Market Index
= Vanguard's Total is a bit Broader.

0.08% - SCHX - 747 Constituents - Schwab U.S. Large-Cap ETF - Dow Jones U.S. Large-Cap Total Stock Market Index
0.13% - VV - 756 Stocks - Vanguard Large-Cap ETF - MSCI US Prime Market 750 Index
= Roughly the same constituents for 0.05% cheaper.

0.15% - SCHG - 426 Constituents - Schwab U.S. Large-Cap Growth ETF - Dow Jones U.S. Large-Cap Growth Total Stock Market Index
0.15% - VUG - 428 Stock - Vanguard Growth ETF - MSCI US Prime Market Growth Index

0.15% - SCHV - 321 Constituents - Schwab U.S. Large-Cap Value ETF - Dow Jones U.S. Large-Cap Value Total Stock Market Index
0.15% - VTV - 442 Stocks - Vanguard Value ETF - MSCI US Prime Market Value Index

0.15% - SCHA - 1747 Constituents - Schwab U.S. Small-Cap ETF - Dow Jones U.S. Small-Cap Total Stock Market Index
0.15% - VB - 1749 Stocks - Vanguard Small-Cap ETF - MSCI US Small Cap 1750 Index

0.15% - SCHF - 1339 Constituents (23 Countries) - Schwab International Equity ETF - FTSE Developed ex-US Index
0.16% - VEA - 943 Stocks (21 Countries) - Vanguard Europe Pacific ETF - MSCI EAFE Index
= FTSE gets 2 more countries and 400 more constituents

0.35% - SCHC - Schwab International Small Cap Equity ETF - FTSE Developed Small Cap ex-US Liquid Index
0.38% - VSS - Vanguard FTSE AW ex-US Sm-Cap ETF
= FTSE AW All World includes emerging markets

0.35% - SCHE - Schwab Emerging Markets Equity ETF - FTSE All-Emerging Index
0.27% - VWO - Vanguard Emerging Markets ETF - MSCI Emerging Markets Index

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Post by ScottW » Thu Nov 05, 2009 11:43 am

Gotadimple wrote:All of this analysis is good for now. However, if you look at the prospectus for any of these funds you will see a 12-b-1 charge of .25% which is waived until 2011.


That's interesting. I had never heard of an ETF with a 12b-1 fee before. Since the fee is normally used as "pay-to-play" to either convince a broker to sell the fund, or to allow the fund to be sold in a fund supermarket (like Schwab's) with no transaction fee, I never thought something like an ETF would have one. After looking around, I see that both PowerShares and Claymore have 12b-1 on some of their ETFs.

It's interesting that they try to undercut most other ETF providers out there with the low expense ratios, but then put in a back door for jacking up the price.

For me, that alone is enough to avoid these ETFs.

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Post by Doc » Thu Nov 05, 2009 12:15 pm

ScottW wrote:
Gotadimple wrote:All of this analysis is good for now. However, if you look at the prospectus for any of these funds you will see a 12-b-1 charge of .25% which is waived until 2011.


That's interesting. I had never heard of an ETF with a 12b-1 fee before. Since the fee is normally used as "pay-to-play" to either convince a broker to sell the fund, or to allow the fund to be sold in a fund supermarket (like Schwab's) with no transaction fee, I never thought something like an ETF would have one. After looking around, I see that both PowerShares and Claymore have 12b-1 on some of their ETFs.

It's interesting that they try to undercut most other ETF providers out there with the low expense ratios, but then put in a back door for jacking up the price.

For me, that alone is enough to avoid these ETFs.

Currently no Schwab fund has a 12b-1 fee as far as I can tell. Does anyone really think they are going to add one to their brand new ETFs in twelve months?
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Post by ScottW » Thu Nov 05, 2009 12:30 pm

Doc wrote:Currently no Schwab fund has a 12b-1 fee as far as I can tell. Does anyone really think they are going to add one to their brand new ETFs in twelve months?


I think they'd be crazy to, but if they had no plans to charge it in the future, why include it in the prospectus? Its mere presence sends up a red flag for me.

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Post by Doc » Thu Nov 05, 2009 1:44 pm

ScottW wrote:
Doc wrote:Currently no Schwab fund has a 12b-1 fee as far as I can tell. Does anyone really think they are going to add one to their brand new ETFs in twelve months?


I think they'd be crazy to, but if they had no plans to charge it in the future, why include it in the prospectus? Its mere presence sends up a red flag for me.

Probably for the same reason Vanguard changed the names of their "Corporate" bonds funds to "Investment Grade". The reasoning is the politically correct "JIC" or politically incorrect "CYA". :)
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Post by Kenster1 » Fri Nov 06, 2009 10:41 am

Yeah saw the Schwab ETF commercials this morning on CNN.

The Schwab marketing and advertising about their commission free Schwab ETFs for Schwab brokerage customers are out in full force.

But wow they are flexing their muscles quite a bit -- attracted a lot of assets and independent RIA's since the market downturn. Aren't they now the biggest brokerage firm? I believe they're the biggest for RIA's (Registered Investment Advisors) because of their strong online and backoffice platform to support RIA's and Institutions. I also remember reading where Rick Ferri mentioned he also preferred Schwab over Fidelity.

On the mutual fund side -- their own own branded mutual funds including the index and fundamental index ones have only a $100 minimum and $1 subsequent investment minimum which is great for the young and small investors to get the ball rolling.

And add in their High-Yield Checking & Savings accounts with unlimited rebates for ATM fees worldwide + free checks and also they have 0% international transaction fees on their 2% cash back Visa credit card and they're really trying to appeal to the one-stop shoppers. Most Visa/MC credit cards charge 3% for international transactions.
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Post by ziggy29 » Fri Nov 06, 2009 11:03 am

As regarding the potential 12b1 fee -- That is enough to make me not use these ETFs for my taxable brokerage account, but I'd still use them for the time being in my IRAs where there is no tax consequence for selling them if they actually start imposing the fee.

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Post by caklim00 » Fri Nov 06, 2009 11:18 am

Very interesting... The Dow Jones Indexes look almost identical to MSCI: http://www.djindexes.com/mdsidx/downloa ... dology.pdf

This would be an interesting wash cash scenario... But, the review occurs semi-annual for Dow Jones and quarterly for MSCI meaning there would be a likely divergence between them. The midcap indexed seem to be the only real difference (MSCI is a larger midcap than Dow Jones).

At the very least SCHB seems like a good partner for VTI when Tax Loss Harvesting...

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Post by nvboglehead » Sat Nov 07, 2009 1:52 pm

I think that competition is great. Thank you VG for your unique, non-profit corporate structure, which allows you to offer your investment products with the lowest expense ratios around. It is forcing the rest of the industry to respond by cutting their fees.

It is a great marketing gimick that Schwab is doing, offering some low cost ETFs. I wonder how long it will take for Schwab's Board of Directors to decide to raise those charges to pay for the higher costs of Schwab's huge network of retail offices.

Also, Schwab is offering no deal on its fixed income funds. SWLBX (Total Bond Index) and SWBDX (Short-term Bond) are charging .55. That is expensive compared to VG's comparable offerings.

Dale

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