Charles Schwab (NYSE: SCHW) continues to roll out diversified exchange traded funds offering rock-bottom fees and free online ETF trades for its clients. Now the broker has introduced a U.S. total-market bond ETF with an expense ratio that undercuts the competition.
The ETF is designed as a core, diversified holding representing the U.S. fixed-income market. It holds Treasuries, government agencies, corporate and securitized bonds.
Schwab U.S. Aggregate Bond ETF (NYSEArca: SCHZ) has an expense ratio of 0.1%, the lowest in the category.
“We have seen tremendous demand for a single vehicle that provides a core, diversified, U.S. fixed income allocation, and the Schwab U.S. Aggregate Bond ETF seeks to do just that, at an exceptional value,” said John Sturiale, vice president of product management at Schwab.
The San Francisco-based company, with more than 8 million client brokerage account and over 1 million retirement plan participants, is an example of a financial-services firm that has launched its own ETFs.
Competition in this particular space of the fixed-income ETF market includes Vanguard Total Bond Market ETF (NYSEArca: BND) and iShares Barclays Aggregate (NYSEArca: AGG).
An ETF’s expense ratio is part of the overall cost of investing in the fund, which also includes any broker commissions and bid/ask spreads.
Tisha Guerrero contributed to this article.