Schwab to Launch Monthly Income Fund Series

Charles Schwab has introduced a suite of funds designed to generate a targeted annual payout.

The Schwab Monthly Income Funds are comprised of three funds, Schwab said in a press release, each with a different annual payout target, to help investors plan for their income needs:

  • The Moderate Payout Fund offers an annual target income payout of 3% – 4% and has the greatest exposure to equities for the most capital growth potential.
  • The Enhanced Payout Fund has a target annual income payout of 4% – 5% and moderate equity exposure for some level of capital growth potential.
  • The Maximum Payout Fund offers the highest level of income potential with a target annual income payout of 5% – 6% and the most conservative exposure to equities for capital growth potential.

To deliver the target payout, portfolio management will monitor the markets and adjust the mix of investments to keep the funds in line with their objectives of both income and capital growth, Schwab said. In addition, portfolio managers manage the flow of dividends generated by the underlying investments to minimize fluctuations in monthly income over the course of the year.

The funds are competitively priced with no additional management fees beyond those of the underlying funds, and they are available with no-load and no transaction fees.

The Schwab Monthly Income Funds will be in subscription from March 11 to March 27, 2008, and begin operations on March 28, 2008. For more information, go to or call 877-369-4626.