Schwab ETFs Just Got Better

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Schwab's 15 ETFs were already attractive as low-fee, viable investment products even before this recent fee cut.

That's in part because they've already cleared the all-important hurdle of investor interest.

The ETFs from Schwab for the most part have decent assets and can be traded without excessive cost. What's more, they deliver representative coverage of their respective target markets.

Does that mean that each Schwab fund has the highest asset base, strongest daily trading volume and tightest spread in each market segment? Or that its basket perfectly captures the market in each case?

No, but these funds are ready to step out from under the shadow of giant funds from other issuers.

Here's a quick look at the Schwab suite along the lines of assets, tradability and exposure to the market.

Assets

Schwab launched its first of its 15 funds about three years ago in late 2009 and rolled out more in 2010 and 2011.

All of the funds have over $100 million in assets. The range is from about $1.1 billion for the Schwab U.S. Broad Market ETF (NYSESArca:SCHB) to $167 million for the Schwab International Small-Cap Equity ETF (NYSEArca:SCHC).

Twelve of the funds have spreads less than 8 basis points-reasonably tight, in other words. Do some competing funds have tighter spreads? Definitely yes. The point is that most of the Schwab funds have significant interest that keeps spreads decent and transaction costs low.

International funds SCHE, SCHF and especially SCHC trade at wider spreads. Using limit orders rather than market orders can help contain the trading costs with these funds.

Spreads don't cover commissions or other fees that brokers may charge, although Schwab clients can trade the Schwab ETFs without commissions.

Spreads don't capture all aspects of tradability-not by a long shot. But these figures show that liquidity shouldn't be a deal breaker here for medium and long-term investors.

Indexes

Schwab funds track indexes in three broad flavors:Dow Jones for U.S. equities, FTSE for international equities and Barclays for bonds.

Don't forget to check IndexUniverse.com's ETF Data section.

Copyright ® 2012 IndexUniverse LLC . All Rights Reserved.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: SCHB , SCHC

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