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 TeamNorthern Trust Asset Management Strengthens Liquidity Solutions Team
Northern Trust Asset Management has created the new position of senior liquidity specialist, focused on expanding the firm’s offerings of liquidity-management solutions to institutional clients. Peter Schenck will fill the position.
Based in Chicago, Schenck will focus on creating customized investment solutions for large clients in the corporate, insurance and non-profit segments. Coming from BlackRock, Schenck brings 26 years of experience in the investment-management industry to the table.
The firm says it hopes Schenck's fixed-income experience and track record of enhancing client relationships will help deliver compelling and thoughtfully constructed liquidity solutions for clients. He will work closely with Chris Van Alstyne, an institutional sales veteran dedicated to the liquidity business; and Jennifer Hoffenkamp, who was recently named client liquidity solutions manager with a focus on product development and client service.
Before being head of the markets, exchanges and insurance team in the cash management group at Blackrock, Schenk worked at Banc One Capital Markets. He specialized in international fixed-income sales. He earned his bachelor’s degree from Villanova University and an M.B.A. from Fordham University.
Northern Trust is a global asset-management firm serving institutional and individual investors in 29 countries, with $946 billion in assets under management (AUM) as of September 30, 2016.
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