It’s continuing to grow. We need to demystify them; to most investors, it’s another three-letter acronym. We’re trying to explain to them how they should be used, their advantages, pitfalls and so on. We have an ETF Center on Schwab that people can go to and find very approachable pieces on how to trade and use ETFs.
In Schwab ETFs, we had $1.5 billion in assets in roughly eight months – that’s been great. We had high expectations for client demand, and it exceeded those. It’s really come from three segments: RIAs, more active traders and more mainstream buy-and-hold retail investors. There’s been a nice pickup across all three segments. [Schwab Slashes Fees on Six ETFs.]
More broadly, we have $90 billion in assets at Schwab across all ETFs – that’s grown 38% year-over-year. The investments we’ve made to position Schwab as ETF HQ, we’ve seen that pay off, as well.
Are you seeing attention outside of Schwab clients for your ETFs?
We’ve seen some, but it hasn’t really been our focus. Our focus has been serving the needs of clients and the relationships we have with them. Over time, more clients will take an interest, but we’ve put very little effort toward drawing that interest because we have such a huge opportunity with the RIAs and individual investors that we work with today.
What does Chuck Schwab think about ETFs? Does he use them, too?
He loves them, and he uses them for his own portfolio, without a doubt. He is one of the strongest advocates of ETFs at Schwab. It goes back to his roots: Chuck has always stood for asset allocation, low-cost investing, tax-efficiency and ETFs. He was an early adopter and has been a very strong ally and advocate. [ETF Spotlight: Schwab U.S. Broad Market (SCHB).]
To find and research all of the ETFs available from Schwab, visit our ETF Analyzer and select “Schwab” from the provider drop-down menu.