Many Schwab ETFs Hit Key 3-Year Milestone

November 28, 2012

A bundle of Schwab’s ETFs are hitting their three-year milestones, but is anyone tuned in?

Charles Schwab first entered the ETF market in 2009 with the rollout of four equities ETFs, and now—15 proprietary ETFs later with more than $7.96 billion in combined assets—the firm is hitting another milestone it deems important: the third anniversary of roughly half of its funds.

Many financial advisors won’t recommend or even consider a fund until it has established a three-year track record, something that four of Schwab’s ETFs can claim to have done this month, with another four reaching that mark by December and mid-January.

Schwab is excited about the occasion, hoping that its already-successful run in the ETF business will become even more successful as this milestone fuels further interest in its funds by putting them on advisors’ radars.

But the event could be falling on somewhat-deaf ears, if for nothing else, because ETFs are much more transparent than other investment vehicles—and the majority of them are passively managed. That means waiting to see how a portfolio manager stacks up is a nonissue.

“Some folks still use that three-year track record as the investment horizon for them,” Schwab’s managing director of ETFs Eric Pollackov told IndexUniverse, pointing out that hitting that mark in November is indeed good news for the company.

“But I do think with an ETF it should be a lot less time, and by and large it has become less, because you can see performance and transparency, very quickly,” he added.

The Schwab funds that are expected to hit advisors’ radars in the coming weeks, as well as their launch dates and assets, are as follows:

Nov. 3, 2009, inception:

  • Schwab U.S. Small-Cap ETF (NYSEArca: SCHA), $692 million in assets.
  • Schwab U.S. Large-Cap ETF (NYSEArca: SCHX), $941 million.
  • Schwab U.S. Broad Market ETF (NYSEArca: SCHB), $1.18 billion.
  • Schwab International Equity ETF (NYSEArca: SCHF), $884 million.

Dec. 11, 2009, inception:

  • Schwab Large-Cap Growth ETF (NYSEArca: SCHG), $496 million.
  • Schwab Large-Cap Value ETF (NYSEArca: SCHV), $425 million.

Jan. 14, 2010, inception:

  • Schwab International Small-Cap Equity (NYSEArca: SCHC), $186 million
  • Schwab Emerging Markets Equity ETF (NYSEArca: SCHE), $580 million.


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