This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Schwab Under Wraps

Discount broker Charles Schwab (SCHW) is expanding its mutual fund wrap-account offerings with a new group of mutual fund portfolios, a move that shows Wall Street's interest in increasing its fee-based businesses.

Wrap accounts are mutual fund portfolios that bundle a group of individual mutual funds. The service can help clients weed through the thousands of mutual funds available.

While the service often comes with a hefty price tag, Schwab's new offering is less expensive. Total costs for Schwab's managed portfolios, which will include Schwab's fee of 0.25% to 0.5% as well as the underlying expense for each mutual fund, will range from 1% to 1.45%, according to a report in the Wall Street Journal on Wednesday. Total costs for other funds can be as high as 2.5%.

"Many investors prefer to rely on our investment expertise to keep their portfolios in line given the unpredictable movements of the market. They may also be put off by the high fees often associated with other mutual fund advisory programs," said Walt Bettinger, president of Schwab Investor Services. "We created Schwab Managed Portfolios to address this increasing demand from investors for a simpler but sophisticated and affordable solution to their investment needs."

Schwab will be offering clients eight new mutual fund portfolios. Each portfolio invests in about 12 individual mutual funds which consist primarily of Schwab's own equity funds. The investment minimum is $50,000.

Schwab's initiative shows how some brokers are trying to move away from the traditional trading business. Online brokers such as E*Trade (ET), Ameritrade (AMTD - Get Report) and Charles Schwab have each tried to outdo the others by slashing trading charges. Mutual fund wrap accounts are one way that brokers can boost revenue beyond ordinary trading commissions.

Schwab rose a penny to $16.36.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ET $0.00 0.00%
AMTD $27.16 0.00%
AAPL $94.02 0.00%
FB $104.07 0.00%
GOOG $683.57 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs