Charles Schwab

Charles Schwab Corporation, based originally in San Francisco, was founded in 1971 by Charles Schwab. The firm began discount brokerage on May 1, 1975. . 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. 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.

Schwab index mutual funds
Charles Schwab manages five index stock mutual funds,  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 also provides access to RAFI fundamental index funds.


 * Schwab manages two indexed bond funds, a total bond market index fund (SWLBX) and a short term bond index fund (SWBDX). Expense ratios are quite high for bond index funds, 0.55% after waivers.

Schwab exchange traded funds
Schwab offers a growing selection of low cost ETFs (expense ratios range from 6 to 35 basis points), which can traded with no commissions at Schwab. Schwab manages 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.

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.


 * Commission Schedule

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.

Minimum investment:
 * Treasury bills - $10,000
 * Treasury Notes, Bonds, and TIPs - $1,000

Detailed information is available:
 * US Treasuries
 * Schwab fixed income pricing