Schwab latest to hop on active-ETF bandwagon

Add the online broker to the growing list of firms queuing up to offer actively managed ETFs

Mar 12, 2012 @ 3:02 pm

By Jason Kephart

Charles Schwab & Co. Inc. has thrown its hat into the increasingly crowded actively managed ETF ring. The discount brokerage has filed with the Securities and Exchange Commission to offer a wide range of actively managed exchange-traded funds.

Schwab is seeking the ability to launch domestic and international equity or fixed-income active ETFs and ETFs of ETFs, according to its filing. It did not offer details on any specific products or strategies.

Active ETFs have been increasingly popular in headlines — if not assets — over the past few weeks, thanks to the launch of the highly anticipated Pimco Total Return ETF Ticker:(TRXT), an offshoot of the largest mutual fund in the world.

In general, investors have been slow to embrace active ETFs. At the end of last year, 33 active ETFs were available, with a total of $4.2 billion in assets. That's barely a drop in the bucket for the overall ETF industry, which has $1 trillion in assets under management.

While active ETFs haven't been very popular, the active management of ETFs is a different story. Morningstar Inc. tracked more than 330 model portfolios that had more than 50% of assets invested in ETFs as of last year. Those portfolios had $22 billion in assets.

Schwab burst onto the ETF scene in November of 2009 when it launched its first lineup of passive ETFs and became the first brokerage to allow investors to trade ETFs commission-free. The Schwab ETFs have grown to about $7 billion in assets since then, according to Morningstar.

And Schwab made a sizable investment in the active management of ETFs in November 2010 when it purchased Windhaven Investment Management Inc., a registered investment adviser that specializes in ETF portfolios.

Alyson Nikulicz, a spokeswoman for Schwab, declined to comment.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Female leaders highlighted as future of financial advice

InvestmentNews recognized 20 Women to Watch for their efforts to advance the financial advice industry.

Latest news & opinion

Merger mania: Why consolidation in the RIA space is about to explode

The pace is expected to pick up as big firms seek to get even bigger and older advisers look to cash out.

Voya Financial Advisors exposes more sensitive adviser information on its website

List of top advisers at the firm comes after Social Security numbers were put at risk.

Securities America hit with lawsuit seeking $18 million in damages

Firm is dealing with the fallout from a rogue broker it fired a year ago.

Brian Block continues his legal fight to stay out of prison

A judge denied Mr. Block's motion for a new trial, but he wants another day in court.

10 social media stars you're not following yet, but should be

Some of the great people using social media to discuss wealth management and financial advice who might not be on your radar.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print