Schwab ETFsTM Report Zero Capital Gains Distributions in 2013
SAN FRANCISCO -- December 16, 2013
Charles Schwab Investment Management announced today that there will be no
capital gains distributions in 2013 by any of the 21 exchange-traded funds
(ETFs) in the Schwab ETF™ family.
“We’re very pleased to be maintaining our track record of tax efficiency
across all Schwab ETFs, having never distributed capital gains since we
launched our first ETFs in 2009,” said John Sturiale, vice president of
product management for Charles Schwab & Co., Inc. “Every penny counts when
evaluating a fund’s total costs, and tax efficiency is a critical component
for investors, along with low operating expense ratios, narrow bid-ask
spreads, and commission-free online trading in your Schwab account.”
Schwab ETFs, including the six new Schwab Fundamental Index* ETFs rolled out
in August, had $16.1 billion in assets as of November 29, 2013, up from $8.2
billion at the end of November 2012. Schwab’s six proprietary Fundamental
Index ETFs track the Russell Fundamental Index® Series and weight securities
based on objective measures of a company’s size. The funds were quick to gain
traction among investors and advisors, growing to $169 million in AUM by
November 29, 2013.
Several Schwab ETFs recently received awards for best investor experience over
the past year from Morningstar – including Schwab U.S. Broad Market ETF™
(SCHB) for the “U.S. ETF Large Blend” category; Schwab Emerging Markets Equity
ETF™ (SCHE) for the “U.S. ETF Diversified Emerging Markets” category; Schwab
U.S. Large-Cap Growth ETF™ (SCHG) for the “U.S. ETF Large Growth” category;
and Schwab International Equity ETF™ (SCHF) for the “U.S. ETF Foreign Large
Schwab remains an industry leaderin servingETFinvestors. The company
launched Schwab ETFs in November 2009, becoming the first to introduce
commission-free online trading of ETFs in client accounts^1. In addition, all
of Schwab’s market-cap weighted proprietary ETFs have the lowest operating
expense ratios in their respective Lipper categories^2.
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 $231 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^3. In
addition to managing Schwab’s proprietary funds, CSIM provides oversight for
the 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,
Facebook, YouTube, LinkedIn and our Schwab Talk blog.
^1 Restrictions apply: Online trades of Schwab ETFs are commission-free at
Charles Schwab & Co., Inc. (Member SIPC), while trades of certain third-party
ETFs are subject to commissions. Broker-assisted and automated phone trades
are subject to service charges. Waivers may apply. See the Charles Schwab
Pricing Guide for details. All ETFs are subject to management fees and
expenses. An exchange process fee applies to sell transactions.
^2 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 11/29/13.
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. Expense ratios are subject to change.
^3 Based on index funds ranking from Strategic Insight, as of November 29,
Through its operating subsidiaries, The Charles Schwab Corporation (NYSE:
SCHW) provides a full range of securities brokerage, banking, money management
and financial advisory services to individual investors and independent
investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc.
(member SIPC, www.sipc.org), and affiliates offer a complete range of
investment services and products including an extensive selection of mutual
funds; financial planning and investment advice; retirement plan and equity
compensation plan services; compliance and trade monitoring solutions;
referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based investment advisors
through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank
(member FDIC and an Equal Housing Lender), provides banking and lending
services and products. More information is available at www.schwab.com and
Investors should carefully consider information contained in the prospectus,
including investment objectives, risks, charges and expenses. You can request
a prospectus by visiting SchwabETFs.com or calling Schwab at 800-435-4000.
Please read the prospectus carefully before investing.
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.
All regulated investment companies are obliged to distribute portfolio gains
to shareholders at year’s end. There is no guarantee that capital gains
distributions will not be made in the future. Trading shares of the Funds will
also generate tax consequences and transaction expenses. This material is not
intended to be tax advice. The tax consequences vary by individual taxpayer.
Please consult your tax professional or financial adviser for more information
with regard to your specific situation.
Investment returns will fluctuate and are subject to market volatility, so
that an investor's shares, when redeemed or sold, may be worth more or less
than their original cost. Shares are bought and sold at market price, which
may be higher or lower than the net asset value (NAV).
*Schwab is a registered trademark of Charles Schwab & Co., Inc. Fundamental
Index is a registered trademark of Research Affiliates LLC.
The Laudus Group® of Funds includes the Laudus Mondrian Funds and Laudus U.S.
Large Cap Growth Fund, which are part of the Laudus Trust and Laudus
Institutional Trust and distributed by ALPS Distributors, Inc., and the Laudus
MarketMasters Funds®, which are part of the Schwab Capital Trust and
distributed by Charles Schwab & Co., Inc. ALPS Distributors, Inc. and Charles
Schwab & Co., Inc. are unaffiliated entities.
Russell Investments and Research Affiliates, LLC have entered into a strategic
alliance with respect to the Russell Fundamental Index Series. Subject to
Research Affiliates' intellectual property rights in certain content, Russell
Investments is the owner of all copyrights related to the Russell Fundamental
Index Series. Russell Investments and Research Affiliates jointly own all
trademark and service mark rights in and to the Russell Fundamental Index
Series. Charles Schwab & Co., Inc. is not affiliated with Russell Investments
or Research Affiliates. The Schwab Fundamental Index Funds are not sponsored,
endorsed, sold, or promoted by Russell Investments or Research Affiliates, and
Russell Investments and Research Affiliates do not make any representation
regarding the advisability of investing in shares of the funds.
Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO
is not affiliated with the Charles Schwab Corporation. Learn more at
Charles Schwab Investment Management, Inc. is the investment advisor for
Schwab ETFs and an affiliate of the Charles Schwab Corporation. Charles Schwab
& Co., Inc. is an affiliate of the Charles Schwab Corporation.
Alissa Carter, 212-403-9240
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