Schwab’s Ginnie Mae fund will invest at least 80% of its assets in Ginnie Mae mortgage bonds, with the remaining 20% able to be invested in other types of bonds or held in cash. The fund will be managed by Kim Daifotis, who currently manages three other Schwab bond funds, according to a Reuters report.
The San Francisco-based discount broker said its new bond fund, currently in a subscription period from January 29 through February 28, will see its first day of operation March 3. During the subscription period, shares of the fund can be acquired at an offering price of $10 per share.
Similar to US Treasuries, Ginnie Maes carry the full faith and credit of the US government. However, unlike Treasuries, Ginnie Maes are susceptible to more risk depending on how quickly homeowners prepay their mortgages, according to the Reuters report.