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
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.
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
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.
Schwab funds track indexes in three broad flavors:Dow Jones for
U.S. equities, FTSE for international equities and Barclays for
Don't forget to check IndexUniverse.com's ETF Data
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