Schwab Expands Line-up of Target Date Funds for Retail and Retirement Plan Clients
Charles Schwab Bank also marks 10-year and four-year track records for two target date fund families
SAN FRANCISCO--(BUSINESS WIRE)-- Charles Schwab Investment Management, Inc. announced today three new additions to the Schwab Target Funds for the years 2045, 2050, and 2055. Additionally, Charles Schwab Bank has added two new funds to its line-up of collective trust funds for eligible retirement plans – the Schwab Managed Retirement Trust Fund 2055 (SMRT 2055) and the Schwab Indexed Retirement Trust Fund 2055 (SIRT 2055).
With these additions, Schwab now offers a full suite of retail and institutional target-date funds designed to meet the needs of investors and retirement plan sponsors. The funds provide investors -- from those just entering the workforce to retirees -- with broadly diversified retirement solutions designed to become more conservative over time.
“These new funds are designed for young people who want an affordable, accessible solution for a more distant retirement,” said Omar Aguilar, senior vice president and chief investment officer, equities, for Charles Schwab Investment Management. “Whether you’re investing in the funds directly or through an employer’s retirement plan, they deliver broad asset allocation and ongoing professional investment management.”
Schwab Target Funds for Individual Investors
The Schwab Target Funds are mutual funds designed primarily for retail investors, and offer shareholders a diversified portfolio of both active and passive management, as well as a combination of proprietary and externally managed strategies.
The Schwab Target Funds have net operating expense ratios ranging from 0.55% to 0.84%, and a low $100 account minimum.
For more information about Schwab Target Funds, visit www.schwab.com/target or call 1-877-682-6461.
SMRT and SIRT Collective Trust Funds for Retirement Plans
For sponsors of employer based retirement plans, Charles Schwab Bank offers both active (SMRT) and passive (SIRT) products to provide flexibility and choice.
The Schwab Managed Retirement Trust (SMRT) Funds and Schwab Indexed Retirement Trust (SIRT) Funds, maintained by Charles Schwab Bank as trustee, offer target date portfolios in a collective trust vehicle which are diversified across traditional and non-traditional asset classes. The SMRT Funds use a combination of active and passive investments while the SIRT Funds use primarily passive investment strategies.
The Funds use an open-architecture approach, investing in strategies using investment advice from many industry-recognized investment firms to complement Schwab’s internal capabilities. This approach enables Charles Schwab Bank to offer investors greater investment management expertise in each asset class, and additional diversification. And, Charles Schwab Bank has increased flexibility to replace underlying strategies, a focal point for retirement plan fiduciaries when evaluating target fund construction.
This approach is unlike most other target date retirement funds which rely on a single investment firm’s strategies for an entire target date portfolio. In addition, the collective trust funds’ structure helps keep costs low, another key benefit for plan sponsors and participants.
The Schwab Managed Retirement Trust Funds are available in four unit classes with all-in operating expense ratios starting at 0.45 percent.
The Schwab Indexed Retirement Trust Funds are available in a single unit class with no investment minimums and an all-in operating expense ratio of 0.18 percent.
The funds are available to eligible, qualified retirement plan clients of Charles Schwab Bank, and to such entities through other retirement providers via the National Securities Clearing Corporation (NSCC).
Plan sponsors and their advisors may learn more about the funds at www.schwabbankfunds.com.
Funds Reach Significant Milestones
Last quarter, the Schwab Managed Retirement Trust Funds reached their 10-year anniversary, and the Schwab Indexed Retirement Trust Funds reached their four-year anniversary this month.
The ten-year milestone for the original SMRT funds stands as one of the longer track records for target date funds of any type. Additionally, the Class IV unit classes of the original 2010, 2020, 2030 and 2040 funds have achieved top-decile rankings over the ten-year period versus their respective Morningstar categories as of 12/31/12.
“These milestones are significant. Offering funds with an established track record and well-tested investment process in a retirement plan is important both to plan sponsors and to the investment consultants who often evaluate and recommend which funds are included in a plan,” said Mark Coffrini, senior vice president of Retirement Business Services for Charles Schwab.
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 $219.3 billion in assets under management as of December 31, 2012. It is among the country's largest money market fund managers and is the third-largest provider of retail index funds.1 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 in addition to two separate account model portfolios, and 15 ETFs.
About SMRT and SIRT
The Schwab Managed Retirement Trust Funds™ and the Schwab Institutional Trust Funds® are collective trust funds maintained by Charles Schwab Bank, trustee of the Funds. The Charles Schwab Bank collective trust funds are not insured by FDIC or any other type of deposit insurance; are not deposits or other obligations of, and are not guaranteed by Charles Schwab Bank or any of its affiliates; and involve investment risks, including possible loss of principal invested. The Funds are not mutual funds, and their units are not registered under the Securities Act of 1933, as amended, or applicable securities laws of any state or other jurisdiction. The Funds are exempt from registration under the Investment Company Act of 1940, as amended, or other applicable law, and unit holders are not entitled to the protections of the 1940 Act. As more specifically defined in the Funds’ Declaration of Trust and Participation Agreement documents, the Funds are available for investment by (i) retirement plan trusts that qualify for exemption from federal income tax pursuant to Section 501(a) of the Internal Revenue Code (“Code”) because they are qualified under Section 401(a) of the Code, (ii) eligible governmental plans under Section 457(b) of the Code which are exempt from tax under Section 457(g) of the Code, or (iii) group trusts which consist solely of the assets of these types of plans. The decision to invest in the Funds should be carefully considered. The unit values for the Funds will fluctuate, and investors may lose money.
About Charles Schwab
The Charles Schwab Corporation (NYSE: SCHW ) is a leading provider of financial services, with more than 300 offices and 8.8 million active brokerage accounts, 1.6 million corporate retirement plan participants, 865,000 banking accounts, and $1.95 trillion in shareholders assets. The company was ranked ‘Highest in Investor Satisfaction with Self-Directed Services’ in the 2012 US Self-Directed Investor Satisfaction StudySM from J.D Power and Associates. Through its operating subsidiaries, the company 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 its Advisor Services division. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides trust and custody services, banking and lending services and products. Investment products offered by Charles Schwab & Co., Inc. are not insured by the FDIC, are not deposits or obligations of Charles Schwab Bank, and are subject to investment risk, including the possible loss of principal invested. More information is available at www.schwab.com and www.aboutschwab.com.
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Brokerage Products: Not FDIC Insured | No Bank Guarantee | May Lose Value
Investors should carefully consider information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can view, download, and print a prospectus by clicking Investor Information, or call 800-435-4000 to request a prospectus. Please read the prospectus carefully before investing.
Investment value and return will fluctuate, such that shares when redeemed may be worth more or less than original cost. The values of the funds will fluctuate up to and after the target dates. There is no guarantee the funds will provide adequate income at or through retirement.
Past performance is no guarantee of future results.
The Funds are subject to market volatility and risks associated with the underlying investments. Risks include exposure to international and emerging markets, small company and sector equity securities, and fixed income securities subject to changes in inflation, market valuations, liquidity, prepayments, and early redemption.
The funds are built for investors who expect to start gradual withdrawals of fund assets on the target date, to begin covering expenses in retirement.
The information presented is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each plan sponsor or consultant should carefully review an investment strategy before making any investment decision.
The Laudus Group® of Funds includes the Laudus Mondrian and Laudus Growth Investors Funds, 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. Charles Schwab & Co., Inc. and ALPS Distributors, Inc. are unaffiliated entities.
Schwab Affiliated Funds include Schwab Funds and Laudus Funds. Schwab Funds and Laudus Funds are advised by Charles Schwab Investment Management, Inc., an affiliate of Charles Schwab & Co., Inc.
Charles Schwab Investment Management, Inc. ("CSIM"), the investment advisor for Schwab's proprietary funds, Charles Schwab & Co., Inc. ("Schwab"), the distributor for Schwab Funds, and Charles Schwab Bank are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.
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1 Strategic Insight, November 2012
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