Schwab ETFs Are Gaining Traction

by: George Spritzer, CFA

Back in November, Schwab started issuing their own proprietary ETFs that are commission free on the Schwab platform. Eight ETFs have been issued so far, and five out of eight have attracted an average trading volume of more than 100,000 shares a day. The total market cap of the ETFs has been steadily growing and now equals $1.1 Billion.

(Data below is taken from the XTF ETF Experts web site).

Market Cap ADV Expense Ratio
Schwab Equity ETFs (MM) (000)
US Broad Mkt (NYSEARCA:SCHB) 219.8 193.7 0.08%
US Large Cap (NYSEARCA:SCHX) 218.1 167.7 0.08%
US Small Cap (NYSEARCA:SCHA) 178.2 158.7 0.15%
Intl Equity (NYSEARCA:SCHF) 221.9 166.6 0.15%
US Large Cap Growth (NYSEARCA:SCHG) 79.3 67.5 0.15%
US Large Cap Value (NYSEARCA:SCHV) 51.8 39.5 0.15%
Intl Small Cap (NYSEARCA:SCHC) 43.5 44.7 0.35%
Emerging Mkts (NYSEARCA:SCHE) 98.3 120.9 0.35%
Total 1110.9

These ETFs all have low expense ratios. Their main drawback is that the average daily trading volume is still well below some of the competition. For active traders or for larger trade sizes, an average trading volume of 1 million shares a day or more would be desirable.

Schwab is working to incorporate these ETFs in their 401K platform. Once this is completed, market cap and average daily volume should expand rapidly from current levels.