Schwab Asset Management Inc., the investment advising division of The Charles Schwab Corp., announced the launch of the Schwab Municipal Bond ETF (SCMB) Wednesday, tapping growing interest from investors in fixed income products.
The exchange-traded fund lists on the NYSE Arca and comes with an expense ratio of 0.03%, a comparably lower cost than similar funds in the market. It is expected to begin trading Oct. 12.
SCMB is Schwab’s eighth bond ETF and the 29th from the company overall. Schwab is the fifth largest provider of U.S.-listed ETFs, managing approximately $575.9 billion in assets.
“This launch helps us to continue broadening our footprint in municipal bonds,” Schwab’s Head of Product Management and Innovation John Sturiale said in an email. “This launch allows us to expand our lineup for investors who favor the ETF vehicle and reach clients who are looking for broad muni exposure at a much lower price point.”
Although the fund targets taxable accounts and investors in higher tax brackets, the low expense ratio will also attract registered investment advisors, asset allocators and model-builders, he added.
The goal is to track an index that measures the performance of the U.S. alternative minimum tax-free municipal bond market, according to the company.
The ETF will invest in securities included in the ICE AMT-Free Core U.S. National Municipal Index, which measures the performance of U.S.-dollar-denominated investment-grade, tax-exempt debt publicly issued in the domestic market.
Contact Zoya Mirza at [email protected]