Firm also adds lower-cost unit class and two new independent sub-advisors
for Schwab Managed Retirement Trust Funds(TM)
SAN FRANCISCO, March 19 /PRNewswire-FirstCall/ -- Charles Schwab has
added a 2050 fund to its suite of target-date retirement funds. The Schwab
Managed Retirement Trust Funds(TM) are collective trust funds designed
specifically for retirement plan participants and managed by The Charles
Schwab Trust Company (CSTC). The funds are tied to target retirement dates
2010, 2020, 2030, 2040, and now, 2050. A sixth fund, the Schwab Managed
Retirement Trust Fund - Income, is designed to provide income during
retirement.
"Target-date retirement funds fulfill a key role in helping individuals
get to and through a comfortable retirement because they are easy to use,
diversified and provide ready-made asset allocation," said Jim McCool,
executive vice president of Schwab Corporate & Retirement Services. "More
than 60 percent of our retirement plan clients offer target-date funds to
their employees, and that number continues to grow. Now that the Pension
Protection Act has become law, employers are rapidly embracing automatic
retirement plan features, including using target-date funds as default
investments for their employees."
Open-Architecture Investment Philosophy
Each Schwab Managed Retirement Trust Fund is a comprehensive portfolio
diversified across asset classes and supported by relationships with eleven
independent sub-advisory firms. This open-architecture approach enables
CSTC to manage the funds using investment advice from industry-leading
sub-advisors in each asset class, unlike other target-date retirement funds
that are restricted to a single investment firm for the entire portfolio.
"Today, employers overwhelmingly demand open investment architecture
when they choose investments for employee retirement plans. Applying this
same philosophy to the investments inside a target-date retirement fund
just makes sense, especially given the rapid adoption of these types of
funds as default investments for many plans," said John Sturiale, CSTC
investment officer.
The investment allocations in the five target-date funds become more
conservative over time, with the goal of balancing risk and return. The
income fund has a fixed allocation of 75 percent bonds, stable value and
cash, and 25 percent stocks. The funds' collective trust structure helps
keep costs low, which is a key benefit for investors.
"It is never too early to start saving for retirement, and target-date
funds are an ideal tool for people seeking a simple, one-step solution,"
Sturiale said. "Individuals with a target retirement date of 2050 are just
entering the workforce and are probably new to investing. These individuals
can get a great start toward their retirement savings goals with a
target-date fund that is easy to choose and easy to understand."
New, Low-cost 54 Basis Point Unit Class, Elimination of Minimums Add
Flexibility
In addition to launching the 2050 target-date retirement fund, Schwab
has also added a third separate unit class at 54 basis points (0.54%) and
eliminated minimum balance requirements for all unit classes. The funds are
offered with all-in operating expense ratios of 89, 69 or 54 basis points.
"The Schwab Managed Retirement Trust Funds are competitively priced,
especially considering they are actively managed and employ an open-
architecture philosophy. By offering three unit classes with no wrap fees
or additional expenses, we provide extraordinary flexibility and value to
retirement plans, helping plan sponsors as they structure investment menus
for the benefit of their employees," Sturiale said.
New Sub-advisors Added
CSTC works with independent investment firms as sub-advisors to assist
CSTC in its daily management of the underlying funds in each of the
portfolios. Each sub-advisor is selected based on its investment strategy
and performance. Schwab recently added American Century Investments and
State Street Global Advisors as domestic small cap sub-advisors.
"As we approach the five-year anniversary for the funds, we are pleased
to announce new relationships with these two distinguished investment
firms. We believe they will help CSTC to further diversify and improve the
performance of the small-cap asset class and the funds overall," Sturiale
said.
Sub-advisors for the Schwab Managed Retirement Trust Funds include:
* American Century Investments
* American Funds
* The Boston Company Asset Management
* Dodge & Cox
* Goldman Sachs Asset Management
* INVESCO
* Pictet Asset Management
* PIMCO
* State Street Global Advisors
* Turner Investment Partners
* The Vanguard Group
Assets in the Schwab Managed Retirement Trust Funds exceeded $1.74
billion as of February 28, 2007. For more information about the funds,
visit http://www.cstcfunds.com.
The Schwab Managed Retirement Trust Funds are collective trust funds
maintained and distributed by The Charles Schwab Trust Company (CSTC), a
California state-chartered, non-depository trust company. CSTC acts as
trustee and manager. Interests in the funds are sold through CSTC and
Charles Schwab & Co., Inc., a registered broker-dealer, and are also made
available through the NSCC. The funds are not mutual funds, and their units
are not registered under the Securities Act of 1933, as amended, or
applicable securities laws of any state or other jurisdiction. The funds
are not registered under the Investment Company Act of 1940, as amended, or
other applicable law, and unit holders are not entitled to the protections
of the 1940 Act. The funds are not insured by CSTC, any of its affiliates,
the FDIC or any other person. As defined in the funds' Declaration of Trust
and Participation Agreement, the funds are available for investment through
CSTC by eligible qualified retirement plans only. The unit value of the
funds will fluctuate, and investors may lose money. Various asset classes
of the underlying funds, such as small-cap and international, may carry
additional risks.
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 300 offices and 6.8 million client
brokerage accounts, 584,000 corporate retirement plan participants, 150,000
banking accounts, and $1.3 trillion in client assets. Through its operating
subsidiaries, the company provides a full range of securities brokerage,
banking, money management and financial advisory services to individual
investors and independent investment advisors. Its broker-dealer
subsidiary, Charles Schwab & Co., Inc. (member SIPC, http://www.sipc.org),
and affiliates offer a complete range of investment services and products
including an extensive selection of mutual funds; financial planning and
investment advice; retirement plan and equity compensation plan services;
referrals to independent fee-based investment advisors; and custodial,
operational and trading support for independent, fee-based investment
advisors through its Schwab Institutional division. The Charles Schwab
Bank, N.A. (member FDIC) provides banking and mortgage services and
products. CyberTrader(R), Inc. (member SIPC, http://www.sipc.org) is an
electronic trading technology and brokerage firm providing services to
highly active, online traders. More information is available at
http://www.schwab.com. (0307-3313)
SOURCE Charles Schwab
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Related links:
http://www.schwab.com/
CONTACT:
Michael Cianfrocca of Charles Schwab,
+1-415-667-3252, michael.cianfrocca@schwab.com
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