Schwab Files for New Government Money Market ETF
New offering will combine U.S. government securities with ETF structure, entering a growing category of cash management investment products.
Charles Schwab has filed with the Securities and Exchange Commission to launch its first money market ETF, entering a growing segment of the fund marketplace.
The Schwab Government Money Market ETF (SGVT) will trade on NYSE Arca and seek current income while preserving capital and maintaining liquidity.
Unlike traditional money market funds that maintain a stable $1 share price, Schwab's exchange-traded fund will have a fluctuating NAV based on market values, representing a different approach than money market funds, as investors increasingly seek cash management options with the convenience of exchange trading.
According to the SEC filing dated March 14, the fund will invest in U.S. government securities such as Treasury bills, notes and obligations issued by government agencies. At least 99.5% of the fund's assets will be in cash, government securities and/or fully collateralized repurchase agreements.
Industry Expansion in Money Market ETFs
The money market ETF landscape has seen multiple new entrants recently, including BlackRock’s iShares Government Money Market ETF (GMMF), while Texas Capital recently introduced the Texas Capital Government Money Market ETF (MMKT).
These offerings reflect growing investor interest in cash management solutions that combine yield potential with the transparency and trading flexibility of ETFs.
The fund's management fee has not yet been disclosed in the filing, which indicates the fund is expected to become effective on May 28, pending regulatory approval.
According to the filing, Schwab Asset Management will oversee the fund's operations. The fund "is an actively managed ETF fund and therefore does not seek to replicate the performance of any specific index," the prospectus explains.
Schwab already offers several money market mutual funds, including the Schwab Government Money Fund (SNVXX) and the Schwab Value Advantage Money Fund (SWVXX). Adding an ETF version provides options for different investor preferences in accessing and trading these investments.
Correction: This story has been updated to indicate that SGVT would have fluctuating NAV based on market values representing a different approach than money market funds, not ETFs. The story also identified JPST as a money market ETF; it's an ultra-short ETF.
