Schwab launches two new commission-free ETFs

The Charles Schwab Corp. today launched two commission-free exchange-traded funds and released data showing that the first four ETFs it launched last month have done very well in a short period of time. The Schwab U.S. Large-Cap Growth ETF (SCHG) and the Schwab U.S. Large-Cap Value ETF (SCHV) began trading today. The two funds each have an expense ratio of 0.15% and, like the first four funds, can be bought and sold commission-free online in Schwab accounts. “These two new ETFs allow investors to tilt their portfolios based on whichever style, growth or value, they think will lead the market,” Peter Crawford, senior vice president at Charles Schwab, said in a statement. Schwab's decision to launch ETFs based of such broad market indexes was questioned by some who were skeptical as to whether there was room in a already crowded market for such products. But its decision to provide its ETFs commission-free appears to have helped the firm gain traction with investors. There were $209 million in assets under management in the first four Schwab ETFs as of Dec. 9, and trading volume across them has averaged approximately 555,000 shares per day since their inception Nov. 3. “It appears to be good news,” said Tom Mench, chairman and chief investment officer of Mench Financial Inc., an advisory firm with $200 million under management. But he advised caution when looking at the numbers. The ETF industry as a whole saw “record levels” of trading volume over the last few weeks, which could help explain Schwab's early success. Two additional Schwab ETFs, covering emerging markets and international small-cap equity, are expected to be launched in January. In other ETF news today, Global X Management Co. LLC launched the Global X China Financials ETF (CHIX), the first ETF offering targeted access to that sector. The fund is the latest launch in a family of China sector ETFs offered by Global X Funds, including the China Industrials ETF (CHII), China Consumer ETF (CHIQ) and China Technology ETF (CHIB). Within the next few weeks, the company plans to launch the China Energy ETF (CHIE) and China Materials ETF (CHIM), which are not yet available for purchase. All Global X funds will have a 0.65% expense ratio.