Fees Hit Rock Bottom: Schwab Ties Rivals in Core Index Investing

Schwab Asset Management has cut fees on four of its equity index funds to levels that are effectively zero, tying them with other major players in the space. The US mid-cap and small-cap ETFs now charge just 0.03%, while international small-cap and emerging markets funds come in at 0.06%. This move is part of a larger price war in the core investing market.

The reductions took effect on June 11, covering SCHM, SCHA, SCHC, and SCHE. Schwab's US ETF inflows are currently running at a record pace, with the company managing around $1.6 trillion in discretionary assets as of March 31, 2023.

The cuts have sparked questions about whether new ETF launches will move into the crypto space instead. Eric Balchunas, Senior ETF Analyst at Bloomberg Intelligence, noted that the low fees are a sign of how competitive the market has become.