Charles Schwab (NYSE: SCHW), the largest U.S. discount brokerage firm, continued its torrid pace of exchange traded funds asset-gathering in the third quarter thanks to increased inflows from retail investors and traders.
At the end of the third quarter, ETF assets custodied at Schwab reached $216 billion, a 20% year-over-increase, according to the firm’s third-quarter snapshot. Flows to ETF assets custodied at Schwab hit $4.2 billion during the third quarter, bringing the year-to-date total to $14.2 billion, according to the firm’s quarterly snapshot released Monday.
The bulk of Schwab’s third-quarter ETF flows, 61% to be precise, went to equity-based ETFs with another 16% going to fixed income products. Among bond ETFs, Schwab clients displayed a preference for intermediate bond funds. That is a reversal from what was seen in the first quarter when nearly 60% of inflows by Schwab clients went to bond ETFs.
“Retail traders captured 12% of the 12-month ETF flows, up from just 6% in the prior year,” according to Schwab.
Last month, Schwab unveiled a massive expansion of its Schwab ETF OneSource commission-free ETF platform by adding 65 new ETFs and seven new issuers.
New providers joining OneSource are ALPS, Direxion Investments, Global X Funds, IndexIQ, PIMCO, ProShares and WisdomTree (NasdaqGS: WETF). Those firms join OneSource’s original members State Street (NYSE: STT), Guggenheim, Invesco’s (NYSE: IVZ) PowerShares, ETF Securities, U.S. Commodity Funds and Schwab’s own lineup of ETFs. [Schwab Bolsters Commission-Free ETF Lineup]