Charles Schwab (NYSE: SCHW) has filed to launch a new family of ETFs tied to indices that weight companies by fundamental factors rather than traditional market-cap approaches.
Ignites.com reports the financial-services giant on Monday re-filed a preliminary prospectus for six funds: Schwab Fundamental U.S. All Company ETF, Schwab Fundamental U.S. Large Company ETF, Schwab Fundamental U.S. Small Company ETF, Schwab Fundamental International Large Company ETF, Schwab Fundamental International Small Company ETF and Schwab Fundamental Emerging Markets Large Company ETF. Schwab originally filed the preliminary prospectus in March. The ETFs are expected to launch sometime this year.
“Schwab is one of a number of firms that are tapping advisor demand for products somewhere between market-cap index and true active management,” reports Jackie Noblett for Ignites. These ETFs are also known as alternative beta index products.
“I don’t believe it’s a niche strategy at all. The academic research and institutional commitment shows these are very viable strategies for clients,” said Tony Davidow, VP for alternative beta and asset allocation strategist in Schwab’s Center for Financial Research, in the Ignites story.
Davidow joined Schwab earlier this year from Guggenheim Investments, where he provided research for the company’s alternative beta lineup, according to the report.
Schwab currently manages eight domestic equity ETFs, three international equity ETFs and four fixed-income ETFs. The firm’s total ETF assets under management stand at $12.5 billion, according to XTF.