Making inroads into the predominately mutual fund occupied 401(k) space, Charles Schwab is set to launch an exchange traded fund only retirement plan.
Schwab announced that it will launch the ETF-only version of its Schwab Index Advantage 401(k) plan later this year, Financial Advisor Magazine reports.
“Fund operating expenses for index ETFs are often lower than those of index mutual funds. We believe integrating ETFs into a 401(k) lineup can drive costs down further and provide workers with the opportunity to save even more for retirement,” Steve Anderson, executive vice president of Schwab Retirement Plan Services, said in a press release.
The Schwab Index Advantage saw its weighted average operating expense ratio for investments in 401(k)s drop to 0.1478% from 0.6511% after transitioning to index mutual funds.
Around 50 employers have picked up the Schwab Index Advantage, which launched a year ago. It has gathered more than $4 billion in assets and over 36,000 individual participants. [ETFs: Coming to a 401(k) Plan Near You]