Making inroads into the predominately mutual fund occupied 401(k) space, Charles Schwab is set to launch an exchange traded fund-only retirement plan.
"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.
Charles Schwab is an ETF provider, but a lot of investors trade ETFs through its online brokerage platform. The fund sponsor, which has a suite of 15 equity and fixed-income ETFs, reached the $10 billion mark in assets under management February 8, according to a press release.
Earlier this month, Schwab made waves in the ETF industry after announcing the OneSource trading platform that allows Schwab clients to buy and sell 105 ETFs with zero online trade commissions.
Max Chen contributed to this article.
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