Four Schwab ETFs Win Morningstar ETF Category Awards in Investor Class
SCHB, SCHE, SCHG, SCHF Named Category Winners
SAN FRANCISCO -- October 4, 2013
Charles Schwab Investment Management, Inc. (CSIM) announced today that four
Schwab Exchange-Traded Funds (ETFs) have received top honors from Morningstar,
Inc. for providing the best investor experience over the past year compared to
other ETFs in their respective categories.
Now in their second year, the Morningstar ETF Awards recognize ETFs and ETF
providers that have ranked the highest in their category versus peers over the
past year based on total cost of ownership and risk-adjusted performance.
Total cost of ownership is comprised of estimated holding cost, tracking
volatility and market impact cost.
The Schwab U.S. Broad Market ETF^TM (SCHB) won the Investor class award out of
17 funds in Morningstar’s “U.S. ETF Large Blend” category. The Schwab Emerging
Markets Equity ETF^TM (SCHE) was cited as the Investor class winner out of 15
funds in Morningstar’s “U.S. ETF Diversified Emerging Markets” category. The
Schwab U.S. Large-Cap Growth ETF^TM (SCHG) ranked highest out of 13 funds in
the “U.S. ETF Large Growth” category for the Investor class. And the Schwab
International Equity ETF^TM (SCHF) was the Investor class winner, besting a
total of seven funds in the “U.S. ETF Foreign Large Blend” category.
“It’s an honor to be singled out for delivering the best investor experience
in four different categories,” said Marie Chandoha, president and CEO of CSIM,
which manages $14.28 billion in its 21 proprietary ETFs as of September 30,
2013. “Since the first Schwab ETF launched four years ago next month, we’ve
been squarely focused on offering investors well-constructed ETFs at a great
value and closely tracking our benchmarks, so it’s gratifying to have an
industry leader like Morningstar recognize our efforts.”
Investors can buy or sell Schwab ETFs^TM commission-free online through Schwab
accounts*. In addition to their Morningstar accolades, the four winning ETFs
and 11 other market-cap weighted Schwab ETFs have the lowest operating expense
ratios in their respective Lipper categories**. More details about the winners
Name of ETF Ticker Assets* Expense Benchmark
Schwab U.S. Broad Dow Jones U.S.
Market ETF SCHB $2.18B 0.04% Broad Stock
Schwab Emerging SCHE $811.91M 0.15% FTSE Emerging
Markets Equity ETF Index
Schwab U.S. Dow Jones U.S.
Large-Cap Growth SCHG $823.65M 0.07% Large-Cap Growth
ETF Total Stock
Schwab FTSE Developed
International SCHF $1.46B 0.09% ex-US Index
*Total Assets as of September 26, 2013
The Morningstar ETF Awards
The Morningstar ETF Awards honor ETFs and ETF providers that have best met the
expectations of various ETF investors within the context of a relevant peer
group over the past year and the longer term. Morningstar recognizes that
total cost for an ETF goes beyond expense ratios and uses unique data points
for measuring estimated holding cost and liquidity cost. Because investors use
ETFs to fulfill different investment strategies, Morningstar awards those ETFs
that provide the best investor experience for investors as well as those that
are best for traders.
About Charles Schwab Investment Management
Founded in 1989, Charles Schwab Investment Management, Inc. (CSIM), a
subsidiary of The Charles Schwab Corporation, is one of the nation's largest
asset management companies with $229 billion in assets under management as of
September 30, 2013. It is among the country's largest money market fund
managers and is the third-largest provider of retail index funds. In addition
to managing Schwab’s proprietary funds, CSIM provides oversight for the
institutional-style, sub-advised Laudus Fund family. CSIM currently manages 76
mutual funds, 22 of which are actively-managed funds, in addition to two
separate account model portfolios, and 21 ETF offerings.
About Charles Schwab
At Charles Schwab we believe in the power of investing to help individuals
create a better tomorrow. We have a history of challenging the status quo in
our industry, innovating in ways that benefit investors and the advisors and
employers who serve them, and championing our clients’ goals with passion and
More information is available at www.aboutschwab.com. Follow us on Twitter,
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Investors should consider carefully information contained in the prospectus,
including investment objectives, risks, charges and expenses. You can view and
download a prospectus by clicking onProspectuses & Reports. Please read the
prospectus carefully before investing.
* Restrictions Apply: Online trades of Schwab ETFs are commission-free at
Charles Schwab & Co., Inc. (Member SIPC), while trades of certain third-party
ETFs may be subject to commissions. Broker-Assisted and Automated Phone trades
are subject to service charges. Waivers may apply. See theCharles Schwab
Pricing Guidefor details. All ETFs are subject to management fees and
expenses. An exchange processing fee applies to sell transactions.
** This claim is based on expense ratio data comparisons between Schwab
Market-Cap ETFs and non-Schwab Market-Cap ETFs in their respective Lipper
categories. Securities in Market-Cap ETFs are selected and weighted based on
the size of their market capitalization. Expense ratio data for non-Schwab
Market-Cap ETFs were obtained from Strategic Insight Simfund as of 06/30/13.
ETFs in the same Lipper category may track different indexes, have differences
in holdings, and show different performance. Competitors may offer more than
one ETF in a Lipper category. This claim does not include the Schwab
Fundamental Index ETFs which are not market cap-weighted ETFs.
The comparison universe of ETFs is limited by several criteria: Only ETFs with
a stated primary prospectus benchmark are considered (active ETFs are
excluded). The ETF must have at least three years of performance data by June
30, 2013. The ETF must have tracked the same benchmark and Morningstar must
have performance data on that benchmark for at least 13 months. The ETF must
have traded on at least 240 out of the last 250 trading days. Exchange-Traded
Notes and ETFs from the trading categories (such as Trading-Inverse Equity or
Trading-Leveraged Debt) were eliminated from consideration. If there are less
than five ETFs with the required data in a Morningstar Category, all ETFs from
the category were considered ineligible. Any ETF with less than $100 million
in assets at June, 30, 2012, was considered ineligible.
All ETFs are ranked by total cost within the Morningstar Category with lower
total costs receiving better ranks. The ETF Total Cost of Ownership is based
on an ETF’s estimated holding cost (EHC), tracking volatility (TV), and market
impact cost (MI). For the retail awards, an investment amount of $150,000 is
invested for a holding period of three years. For the institutional awards, an
investment amount of $1,000,000 is invested for a holding period of three
weeks, expressed as a fraction of a year. The Blended Morningstar
Risk-Adjusted Return rank is factored in equally for both the retail and
institutional awards. The rank combines both the one-year and three-year
Morningstar Risk-Adjusted Return by placing 25% of the weight on the one-year
number and 75% on the three-year number. The weights are designed to place due
emphasis on the most recent year given that the awards are annual in nature,
but are also meant to reward those funds that have delivered risk-adjusted
outperformance over the longer term. All ETFs are ranked by the Blended
Morningstar Risk-Adjusted Return within the Morningstar Category with higher
returns receiving better ranks. ETFs are again ranked after combining the
total cost rank and the Blended Morningstar Risk-Adjusted Return rank with the
top-ranked ETF chosen as either the retail Morningstar Category winner or the
institutional Morningstar Category winner. Ties are settled by choosing the
ETF with the better Blended Morningstar Risk-Adjusted Return rank.
Past performance is no guarantee of future results.
Investment returns will fluctuate and are subject to market volatility, so
that an investor's shares, when redeemed or sold, may be worth less than their
original cost. Unlike mutual funds, shares of ETFs are not individually
redeemable directly with the ETF. Shares are bought and sold at market price
which may be higher or lower than the net asset value (NAV).
Transactions in shares of the Funds will generate tax consequences and
transaction expenses; other account fees may apply. All registered investment
companies are obliged to distribute portfolio gains to shareholders at year's
end regardless of performance. The information provided is not intended to be
investment or tax advice. Tax consequences vary by individual taxpayer.
Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO
is not affiliated with The Charles Schwab Corporation or any of its
“Standard & Poor’s®” and “S&P®” are registered trademarks of Standard & Poor’s
Financial Services LLC (S&P) and Dow Jones® is a registered trademark of Dow
Jones Trademark Holdings LLC (Dow Jones). “FTSE®” is a trade mark owned by the
London Stock Exchange plc and is used by FTSE International Limited (“FTSE”)
under licence. The FTSE Global Equity Index Series is calculated by FTSE.
The Schwab ETFs are not sponsored, endorsed, sold or promoted by S&P Dow Jones
Indices, FTSE, or their respective affiliates (together, the “Index Sponsors”)
and the Index Sponsors do not make any representation regarding the
advisability of trading in the Schwab ETFs. The Index Sponsors do not accept
any obligations or liability in relation to the issuance, marketing, operation
or trading of the Schwab ETFs.
Neither SIDCO nor CSIM, nor any of their affiliates, are affiliated with the
companies listed above.
Alison Wertheim, 415-667-0475
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