Schwab Asset Management adds first actively managed fixed income ETF to its lineup
WESTLAKE, Texas, July 30, 2024–(BUSINESS WIRE)–Schwab Asset Management®, the asset management arm of The Charles Schwab Corporation, today announced the launch of the Schwab Ultra-Short Income ETF (NYSE Arca: SCUS), its first actively managed fixed income ETF. The first day of trading is expected to be on or about August 13.
With an expense ratio of 0.14%, the Schwab Ultra-Short Income ETF is priced below the industry average of 0.25%1. The ETF will provide access to the U.S. dollar denominated investment grade, short-term bond market and is designed to serve as part of a diversified portfolio.
“The Schwab Ultra-Short Income ETF is a notable addition to the Schwab family of ETFs as investors continue to seek out cost-effective, income-producing strategies to help diversify their portfolios,” said David Lafferty, Director, Product Strategy & Development, Schwab Asset Management. “With SCUS, the first actively managed offering in our fixed income ETF lineup, we believe investors will benefit from our extensive credit research and portfolio management teams, along with the inherent features of an ETF.”
The goal of the Schwab Ultra-Short Income ETF is to seek current income consistent with capital preservation while maintaining liquidity. The ETF invests in investment grade, short-term, U.S. dollar denominated debt securities issued by U.S. and foreign issuers and will maintain a portfolio duration of one year or less.
The fifth-largest provider of ETFs2, Schwab Asset Management has more than a decade of experience managing ETFs with a robust capital markets team. The Schwab Ultra-Short Income ETF is Schwab Asset Management’s tenth bond ETF and the 31st Schwab ETF overall. Schwab bond ETFs seek to be among the lowest cost across the industry’s leading ETF providers.
About Schwab Asset Management
One of the industry’s largest and most experienced asset managers, Schwab Asset Management offers a focused lineup of competitively priced ETFs, mutual funds and separately managed account strategies designed to serve the central needs of most investors. By operating through clients’ eyes, and putting them at the center of our decisions, we aim to deliver exceptional experiences to investors and the financial professionals who serve them. As of March 31, 2024, Schwab Asset Management managed approximately $1.2 trillion on a discretionary basis and $45.7 billion on a non-discretionary basis.
More information is available at www.aboutschwab.com. Follow us on Twitter/X, Facebook, and LinkedIn.
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 integrity.
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Disclosures:
Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses. You can obtain a prospectus, or if available, a summary prospectus by visiting https://www.schwabassetmanagement.com/prospectus. Please read it carefully before investing.
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. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares of ETF are bought and sold at market price, which may be higher or lower than the net asset value (NAV).
Diversification and asset allocation strategies do not ensure a profit and do not protect against losses in declining markets.
Schwab Ultra-Short Income ETF is an actively managed exchange traded fund and therefore does not seek to replicate the performance of any specific index. The fund may have a higher degree of portfolio turnover than funds that seek to replicate the performance of an index.
Schwab Ultra-Short Income ETF is not a money market fund and does not seek to maintain a stable net asset value of $1.00 per share. The fund is not subject to the strict rules that govern the diversity, quality, maturity, liquidity and other features of securities that money market funds may purchase designed to enable money market funds to maintain a stable share price and to limit investment risk. Under normal circumstances, the fund’s investments may be more susceptible than a money market fund is to credit risk, interest rate risk, valuation risk and other risks relevant to the fund’s investments. The fund does not seek to maintain a stable net asset value of $1.00 per share. Therefore, the fund’s net asset value per share and market value will fluctuate, and these fluctuations may be significant on certain days. There can be no guarantee that the fund will generate higher returns than money market funds. In addition, the fund does not qualify for certain tax relief afforded to money market funds by the U.S. Treasury.
Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed-income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications and other factors.
An actively managed fund is subject to the risk that its investment adviser and/or subadviser will select investments or allocate assets in a manner that could cause the fund to underperform or otherwise not meet its investment objective.
The fund may invest in U.S.-registered, dollar-denominated bonds of non-U.S. corporations. The fund’s investments in bonds of non-U.S. issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with bonds issued by non-U.S. corporations and entities in emerging markets.
Schwab Asset Management® is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Schwab ETFs, and separately managed account strategies. Schwab Funds are distributed by Charles Schwab & Co, Inc. (Schwab), Member SIPC. Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). Schwab Asset Management and Schwab are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation, and are not affiliated with SIDCO.
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1 Source: Morningstar data as of June 30, 2024. Data universe is the actively managed ETFs in the Ultrashort Bond category.
2 Source: VettaFi, ETF Issuer League of Table, July 1, 2024.
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Contacts
Christine Underhill
Charles Schwab
415-961-3790