Investment Products and Service Launches

Charles Schwab Updates CTF Prices; Northern Trust Asset Management Strengthens Liquidity Solutions Team.

By Alison Cooke Mintzer | November 17, 2016
Page 1 of 2 View Full Article
Charles Schwab Updates CTF Prices

Charles Schwab has announced changes to its collective trust funds (CTFs), particularly its target-date fund (TDF) offerings.

Schwab offers two series of sub-advised CTF TDFs, which are exclusively available to 401(k) plans and other qualified retirement plans through Charles Schwab Bank. Schwab Indexed Retirement Trust Funds (SIRT) offer passive, index-based strategies. Schwab Managed Retirement Trust Funds (SMRT) provide a blend of active and passive strategies. 

 As of November 1, the following pricing changes were implemented:

  • Expense ratios on Unit Class I of SIRT funds were reduced from fourteen basis points (0.14%) to eight basis points (0.08%) with no minimum investment required, regardless of where the plan is record-kept. This aligns with the pricing of Schwab Target Index Funds, which were launched in August and are among the lowest-cost target date mutual funds available to retirement plans, with an across-the-board expense ratio of eight basis points and no minimum investments, regardless of plan size. 
  • Minimum investments for Unit Class V of SMRT funds have dropped from $300 million to $100 million. No minimum investment is required for plans with more than $400 million in total plan assets. 
  • All minimums for Unit Class IV of SMRT funds have been removed. Previously, defined contribution investment only (DCIO) off-platform plans had to either be $100 million in size or make a $25 million investment. Now, the no-minimum rule applies for both on- and off-platform plans.

The firm says these changes make Schwab target-date CTFs more accessible, and are consistent with the broader effort at Schwab to offer target-date funds at exceptional value.

NEXT: Northern Trust Asset Management Strengthens Liquidity Solutions Team