In addition to launching the new fund, Schwab has also added a third separate unit class at 54 basis points (0.54%) and eliminated minimum balance requirements for all unit classes. The funds are offered with all-in operating expense ratios of 89, 69 or 54 basis points.
The lifecycle funds, managed by The Charles Schwab Trust Company (CSTC), are tied to target retirement dates 2010, 2020, 2030, 2040, and 2050. A sixth fund, the Schwab Managed Retirement Trust Fund – Income, is designed to provide income during retirement.
The investment allocations in the five target-date funds become more conservative over time, with the goal of balancing risk and return, and the income fund has a fixed allocation of 75% bonds, stable value and cash, and 25% stocks.
Schwab recently added American Century Investments and State Street Global Advisors as domestic small-cap subadvisors to the funds. Sub-advisors for the Schwab Managed Retirement Trust Funds include:
American Century Investments
The Boston Company Asset Management
Dodge & Cox
Goldman Sachs Asset Management
Pictet Asset Management
State Street Global Advisors
Turner Investment Partners
The Vanguard Group
More information can be found at www.cstcfunds.com.