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Inside The Mind Of ETF Investors* (Infographic Courtesy Of Charles Schwab & Co., Inc. 0213-1183)

Stocks in this article: SCHW

Cost Matters

According to the 2012 ETF Investor Study by Charles Schwab, released in October of last year, cost is the number one factor investors look at when selecting ETFs. Investors surveyed said they pay the most attention to OERs, followed by trade commissions. Nearly forty percent say the ability to trade ETFs commission-free is either ‘most important’ or ‘very important.’

The same study revealed that investor usage of ETFs is going strong, with 41 percent planning to invest more in ETFs this year. At the same time, there is a distinct need for investor education, with 45 percent calling themselves novices when it comes to understanding ETFs.

Assets in ETFs stand at $1.4 trillion as investors continue to embrace the diversification, low cost, trading flexibility and transparency that ETFs tend to offer.

“Our goal is to make ETF investing accessible, affordable and understandable,” said Peter Crawford, senior vice president of Charles Schwab. “So while Schwab ETF OneSource offers a highly compelling pricing story, this is not about cost alone. Side-by-side with affordability, we also provide the guidance and educational resources to help investors and advisors select the right ETFs to meet their needs.”

New Portfolio-Building Tool

Crawford cited today’s debut of the Schwab ETF Portfolio Builder™ as notable for self-directed clients who want to create all-ETF portfolios that meet their chosen risk profiles. Constructed from standard risk profiles and featuring eight commission-free ETFs at launch (from Charles Schwab Investment Management as well as others), this new tool makes it simple and affordable to build a well-diversified portfolio. Clients choose a risk profile and can adjust the number of shares for each ETF while viewing the impact on their portfolio, and purchase the portfolio online.

The Schwab ETF Portfolio Builder rounds out Schwab’s robust set of tools and resources, which includes:

  • The recently launched ETF Education Exchange™, another example of industry partnership, where investors have comprehensive access to the latest insights and intelligence from industry-wide ETF thought leaders;
  • The “ETF Research” tab on Schwab.com, where investors can access interactive tutorials and education in the “Understanding ETFs” tab to learn how ETFs work, and search for ETFs based on a wide range of criteria using the ETF Screener; and
  • ETF Select List™, where investors can find high-quality, low-cost ETFs screened by Schwab experts to help fill a gap or develop diversified portfolios.

For a list of the ETFs available commission-free on Schwab ETF OneSource, visit schwab.com/ETFOneSource.

A leader in the retail ETF market, Charles Schwab had $152 billion custodied on its platform as of December 31, 2012. Schwab ETFs™, which can be bought and sold commission-free online in Schwab accounts, had $8.6 billion in assets as of December 31, 2012. In September 2012, Schwab announced dramatic cuts to the expense ratios of all 15 Schwab ETFs, making them the lowest expense ratios in their respective Lipper categories 2.

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 client assets as of December 31, 2012. The company was ranked ‘Highest in Investor Satisfaction With Self-Directed Services’ in the 2012 US Self-Directed Investor Satisfaction Study SM 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. (0213-1113)

Follow us on Twitter: @charlesschwab

Read our blog: Schwab Talk

Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can obtain a prospectus by visiting schwab.com or calling 800-435-4000. Please read the prospectus carefully before investing.

Charles Schwab & Co., Inc. receives remuneration from third-party ETF companies participating in Schwab ETF OneSource for recordkeeping, shareholder services, and other administrative services, including program development and maintenance.

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