Schwab Introduces Schwab Personalized Indexing™
The Charles Schwab Corporation is set to launch Schwab Personalized Indexing™, a new direct indexing solution aimed at enhancing portfolio and tax management for more investors and advisors. Expected by late April, this initiative reduces the investment minimum to $100,000, offering competitive fees starting at 0.40%, which is lower than many existing options. Schwab Personalized Indexing is designed to allow investors to directly own securities and optimize tax management strategies through technology and expertise, with plans for further strategies and features in the coming year.
- Launch of Schwab Personalized Indexing expands access to customized investing solutions for a broader range of investors.
- Investment minimum set at $100,000 is significantly lower than typical direct indexing offerings, which often start at $250,000 or higher.
- Competitive fees starting at 0.40% may attract more retail investors and advisors.
- None.
New solution brings the power of customized portfolio and tax management to a broader spectrum of investors
In making the announcement,
Unlike an index mutual fund or ETF, direct indexing involves direct ownership of securities and may offer a greater level of tax management for the investor. The approach behind Schwab Personalized Indexing combines technology and human expertise. Within separately managed accounts (SMAs), Schwab Personalized Indexing employs a proprietary optimization process including daily monitoring of client portfolios and tax-loss harvesting technology that is managed by a team of investment professionals with more than two decades of direct indexing expertise.
“The launch of Schwab Personalized Indexing marks a milestone in giving investors the power to personalize their investments to fit their unique circumstances and perspectives,” said
Each client account is optimized based on the current holdings and unrealized tax profile, with the portfolio management team considering factors such as taxes, risks and tracking error during portfolio construction and daily management. Investors will initially have access to three index-based strategies that can be customized. Schwab Personalized Indexing strategies and their respective indexes include: a
Schwab plans to roll out additional strategies, features and capabilities that will bring even more of the benefits of direct indexing — including greater customization — to retail investors and advisors over the next 12-18 months.
Schwab Personalized Indexing launches with an account minimum of
“Through our commitment to disrupting the status quo, reducing costs, and increasing access to personalized investing for investors, we are elevating the investing experience for our clients,” said
Schwab believes investors of all asset levels get the most value out of direct indexing with the help of an advisor or financial consultant. Clients interested in enrolling in Schwab Personalized Indexing will work with a Schwab financial consultant to open an account or talk to their Registered Investment Advisor.
About Schwab Asset Management
One of the industry’s largest and most experienced asset managers, Schwab Asset Management offers a focused lineup of competitively priced ETFs, mutual funds and separately managed account strategies designed to serve the central needs of most investors. By operating through clients’ eyes, and putting them at the center of our decisions, we aim to deliver exceptional experiences to investors and the financial professionals who serve them. As of
About Charles Schwab
At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.
More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.
Disclosures:
This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice.
Neither the tax-loss harvesting strategy nor any discussion herein is intended as tax advice, and Schwab Asset Management does not represent that any particular tax consequences will be obtained. Tax-loss harvesting involves certain risks including unintended tax implications. Investors should consult with their tax advisors and refer to
Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.
Please refer to the
Portfolio Management for Schwab Personalized Indexing is provided by
There are risks associated with any investment approach, and each Schwab Personalized Indexing strategy and equity market segment has their own set of risks based on client strategy selection and further customization.
Environmental, social and governance (ESG) strategies implemented by mutual funds, exchange-traded funds (ETFs), and separately managed accounts are currently subject to inconsistent industry definitions and standards for the measurement and evaluation of ESG factors; therefore, such factors may differ significantly across strategies. As a result, it may be difficult to compare ESG investment products. Further, some issuers may present their investment products as employing an ESG strategy, but may overstate or inconsistently apply ESG factors. An investment product’s ESG strategy may significantly influence its performance. Because securities may be included or excluded based on ESG factors rather than other investment methodologies, the product’s performance may differ (either higher or lower) from the overall market or comparable products that do not have ESG strategies. Environmental (“E”) factors can include climate change, pollution, waste, and how an issuer protects and/or conserves natural resources. Social (“S”) factors can include how an issuer manages its relationships with individuals, such as its employees, shareholders, and customers as well as its community. Governance (“G”) factors can include how an issuer operates, such as its leadership composition, pay and incentive structures, internal controls, and the rights of equity and debt holders. Carefully review an investment product’s prospectus or disclosure brochure to learn more about how it incorporates ESG factors into its investment strategy.
Strategies that use screening to exclude certain investments may not be able to take advantage of the same opportunities or market trends as strategies that do not use screens. There can be no assurance that the strategies will achieve their desired outcomes. Each investing strategy brings with it its own set of unique risks and benefits.
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Charles Schwab
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