Wednesday, May 07, 2008
Schwab Launches its First Active Global Fund
Armie Margaret Lee
fund unit has unveiled its first actively managed international fund. The Schwab International Core Equity Fund
comes in three share classes: Investor (with an expense ratio of 110 bps), Select (95 bps) and Institutional (86 bps).
Company Press Release
SAN FRANCISCO (BUSINESS WIRE)--Schwab Funds is expanding its family of mutual funds with the addition of its first actively managed international fund — the Schwab International Core Equity Fund.
The new fund is designed to offer broad international equity exposure to help investors diversify their portfolios. The fund combines portfolio optimization strategies with rigorous, systematic international stock research developed by the Schwab Center for Financial Research. Building on the same research approach used to create the industry-recognized Schwab Equity Ratings, Schwab's new international stock research evaluates the long-term growth outlook of stocks outside the U.S. and is available for the exclusive use of Charles Schwab Investment Management.
"With more than half of the world’s stock market value trading on non-U.S. exchanges, international exposure is a key component of equity portfolio diversification,” said Portfolio Manager Eric Thaller. “Schwab’s International Core Equity Fund offers a disciplined investment process and access to Schwab’s international stock research based on multiple criteria that Schwab has found to be indicative of long-term performance across most international stocks.”
The new fund expects to hold between 100 and 200 companies, chosen from a broad universe of more than 6,000 securities in 32 countries. Its benchmark will be the MSCI EAFE Index, but in addition to EAFE countries, the fund will consider securities from 11 additional countries also evaluated by the international stock research.
While the portfolio managers will use Schwab’s international stock research to help in stock selection for potential return, they will seek to balance this potential return against overall portfolio risk. “In general, the fund will invest in stocks that we believe will allow us to manage the volatility of the overall portfolio relative to the benchmark but with the greatest potential of extra return,” Thaller said. “Given the volatility in capital markets, seeking the right risk-return balance will be essential to the fund’s success."
Operating expense ratios for the new fund are below the Morningstar Foreign Large Blend category average of 1.40%. The fund offers three share classes:
Investor Shares (SICVX) have an expense ratio of 1.10% and require a minimum investment of $100
Select Shares (SICSX) have an expense ratio of 0.95% and require a minimum investment of $50,000
Institutional Shares (SICNX) have an expense ratio of 0.86% and require a minimum investment of $500,000
The fund’s subscription period runs from May 1 to May 29 with an offer of $10 per share. The fund will begin operations on May 30. For more information go to www.schwab.com/icefund or call 800-448-2455.
The Schwab International Core Equity Fund is managed by a team led by Jeffrey Mortimer, CFA, senior vice president and chief investment officer, equities, of Charles Schwab Investment. Mortimer oversees management of all Schwab and Laudus equity funds. The fund’s management team is comprised of Eric Thaller, managing director and portfolio manager, as well as Paul Alan Davis, CFA, and Vivienne Hsu, CFA.
About Charles Schwab Investment Management
Founded in 1991, Charles Schwab Investment Management, Inc., a subsidiary of the Charles Schwab Corporation, is one of the nation's largest asset management companies with more than $246 billion in assets under management as of March 31, 2008. It is among the country's largest money market fund managers and is the third-largest provider of retail index funds. In addition to managing Schwab proprietary funds, CSIM manages the sub-advised Laudus Funds, providing access to institutional style investment managers. CSIM currently manages 80 mutual funds, (including 34 actively-managed funds) as well as separate accounts.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.2 million client brokerage accounts, 1.3 million corporate retirement plan participants, 318,000 banking accounts, and $1.4 trillion in client assets. 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. Schwab Center for Financial Research is a division of Charles Schwab & Co., Inc. (“Schwab”). Charles Schwab Investment Management (“CSIM”) is the investment advisor for Schwab Funds. Schwab and CSIM are affiliates of the Charles Schwab Corporation Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://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; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Schwab Institutional division. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at www.schwab.com.
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