Today Charles Schwab is launching its first ETF since it rolled out its fundamentally weighted lineup in August 2013. Despite having a fairly small lineup of a little more than 20 ETFs, the firm is the fifth-largest issuer in the U.S., with some $89 billion in assets under management.
The Schwab 1000 Index ETF (SCHK) tracks an in-house market-cap-weighted index that also underlies a $7.5 billion mutual fund that launched in 1991 as the firm’s first index fund. The ETF, like the mutual fund, comes with an expense ratio of 0.05%.
That’s not Schwab’s cheapest ETF: The Schwab U.S. Broad Market ETF (SCHB) and the Schwab U.S. Large-Cap ETF (SCHX) both charge 0.03%. However, consider that SCHK’s underlying index covers the largest 1,000 U.S.-listed stocks, similar to what the Russell 1000 Index purports to do. Three ETFs, each from one of the top three issuers, track the Russell 1000 Index, and none charge less than 10 basis points.
The funds, their tickers and expense ratios are below:
- iShares Russell 1000 ETF (IWB), 0.15%
- Vanguard Russell 1000 ETF (VONE), 0.12%
- SPDR Russell 1000 (ONEK), 0.10%
IWB, the most expensive, is the largest, with $19.5 billion in assets under management, while VONE has roughly $743 million and ONEK has $155 million.
In a press release, Schwab noted that SCHK will be immediately available through its Schwab ETF OneSource program, which offers commission-free trading on all of the Schwab ETFs, as well as on funds from other issuers.
SCHK lists on the NYSE Arca exchange.
Contact Heather Bell at [email protected]