Products April 20, 2009
Schwab Makes Target Funds Enhancements
April 20, 2009 (PLANSPONSOR.com) - Charles Schwab
Investment Management, the asset management arm of the
Charles Schwab Corporation, has announced strategic changes
to its target-date mutual funds to enhance the portfolios and
reduce expenses.
Reported by Rebecca Moore
According to a press release, enhancements to the Target Funds include:
- Reducing expense ratios by an estimated 13 to 23 basis points;
- Higher fixed income exposure beginning ten years from target date to help increase protection of principal and generate periodic income approaching and during retirement;
- Adding third-party funds managed by third party investment managers for improved style diversification and access to additional asset classes;
- Higher equity exposure in early years of funds, with the goal of building wealth before target date; and
- Extending the “glide path” for an additional five years to continue 20 years after target retirement date.
“We conducted a strategic review of our Schwab Target Date mutual fund lineup to evaluate the best investment approach given market conditions and investors’ changing long-term expectations and current interest in more conservative investment options,” said Peter Crawford, senior vice president for investment management services, in the announcement.