Schwab Adds ETF Resources for Advisers and Investors

Charles Schwab has developed a “Select List” of exchange-traded funds (ETFs) to help investors choose the best one for their portfolio.


The “Schwab ETF Select List” was created by Charles Schwab Investment Advisory, Inc. (CSIA) by filtering through all of the ETFs in the marketplace to highlight a select group of pre-screened, low-cost funds that can be used to fill portfolio gaps. The list will come out quarterly and has approximately 50 asset categories. All ETFs, including Schwab ETFs, will be evaluated using the same criteria. One ETF is named for each of the list’s asset categories, which span sectors, domestic stocks, international stocks, bonds, real estate, and commodities.

When selecting funds for the list, CSIA looks at variables such as total annualized cost of ownership, risk, fund structure, and fit within a given category. Additional qualitative factors including narrowness of index, tracking error, bid/ask volatility and due diligence are also taken into consideration. The list excludes exchange-traded notes (ETNs), inverse or leveraged ETFs, actively managed ETFs, and unmanaged baskets of securities.

For advisers, Schwab has released “The ETF Investor: 2010 in Review by Charles Schwab.” The report is a collection of research from CSIA offering data on ETF usage by Schwab retail investors and adviser clients. It includes institutional-level commentary on various aspects of the industry such as determining the appropriateness of ETFs versus mutual funds, investing in commodities ETFs, and evaluating total cost of ownership of a fund. It is available to advisers who custody with Schwab through the Schwab Advisor Center.