Schwab Joins the ETF Fold

Charles Schwab (SCHW - commentary - Trade Now) will soon join the exchange-traded fund fold, launching its own line of proprietary ETF products.

A series of new SEC filings has revealed the names of the nine initial ETFs slated to be released by the massive discount broker and asset manager.

Domestic funds include Schwab U.S. Broad Markets ETF, Schwab U.S. Large-Cap ETF, Schwab U.S. Large-Cap Value ETF, Schwab U.S. Large-Cap Growth ETF, Schwab U.S. Mid-Cap ETF and Schwab U.S. Small-Cap ETF.

Foreign funds include Schwab International Equity ETF, Schwab International Small-Cap Equity ETF, and Schwab Emerging Markets Equity ETF.

While Schwab hasn't yet released detailed accounts of the funds, such as fee structure, it is anticipated that these funds will be intended to go toe-to-toe with existing rivals.

Schwab's funds should remind ETF investors of domestic Vanguard funds such Total Stock Market ETF (VTI - commentary - Trade Now), Large-Cap ETF (VV - commentary - Trade Now), Value ETF (VTV - commentary - Trade Now), Growth ETF (VUG - commentary - Trade Now), Mid-Cap ETF (VO - commentary - Trade Now), and Small-Cap ETF (VB - commentary - Trade Now).

And Schwab ETF investors will be reminded of Vanguard's foreign funds such as Total World Stock ETF (VT - commentary - Trade Now), FTSE All-World ex-US Small-Cap Index ETF (VSS - commentary - Trade Now) and Emerging Markets ETF (VWO - commentary - Trade Now).

The new funds from Schwab will track the same international indices that Vanguard uses. Schwab's ETFs likely will be offered at a similar or slightly lower price point.

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At the time of publication, Dion had no positions in the securities mentioned.

Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.