Schwab's Target-Date Retirement Funds Continue Strong Growth with Assets up
50 Percent in 2007
SAN FRANCISCO, July 18 /PRNewswire-FirstCall/ -- As more retirement
plan sponsors and participants look to target-date retirement funds for
ease of use, diversification and ready-made asset allocation, Charles
Schwab today announced that assets in its Schwab Managed Retirement Trust
Funds(TM) have exceeded $2 billion. Introduced in 2002, the Schwab Managed
Retirement Trust Funds are collective trust funds managed and distributed
by The Charles Schwab Trust Company (CSTC) and designed specifically for
investment by retirement plan participants.
Each Schwab Managed Retirement Trust Fund is a comprehensive portfolio
diversified across asset classes and supported by relationships with more
than a dozen independent sub-advisory firms. This industry-leading
open-architecture approach enables Schwab to manage the funds using
investment advice from sub-advisors in each asset class, unlike other
target-date retirement funds that rely on a single investment firm for an
entire portfolio. The use of sub-advisors gives Schwab the flexibility to
replace underperforming managers and can increase the comfort level of plan
sponsors who prefer a multiple manager strategy, as opposed to relying
solely on one. In addition, the funds' collective trust structure helps
keep costs low, another key benefit for investors.
"More than 60 percent of Schwab Retirement Plan Services clients are
offering target-date funds to their participants, and employers are telling
us that they choose these funds because of their strong performance as
compared to employees going it alone and selecting their own fund lineup,"
said John Sturiale, investment officer for the Schwab Managed Retirement
Trust Funds. "The passing of the Pension Protection Act last summer is also
causing employers to use these funds as the default investment for the
growing number of their employees who are automatically enrolled into
retirement plans."
In addition to showing strong growth with Schwab's retirement plan
client base and through its Third-Party Administrator partnerships, the
Schwab Managed Retirement Trust Funds have also displayed growth among
plans not currently on Schwab's retirement platform that trade through the
National Securities Clearing Corporation (NSCC).
The funds are tied to target retirement dates in ten-year increments
from 2010 to 2050. The investment allocations in the funds become more
conservative over time, reaching 40 percent equity and 60 percent fixed
income at each of the target dates, with the goal of balancing risk and
return. The funds continue to become more conservative for 20 years beyond
the target retirement dates. Once they reach 25 percent stock and 75
percent fixed income allocations, the allocations no longer change. At that
time, the target-date funds merge with the Schwab Managed Retirement Trust
Fund-Income, which has a fixed allocation of 75 percent bonds and stable
value, and 25 percent stocks, and is designed to provide income during
retirement.
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 6.9 million client
brokerage accounts, 1.1 million corporate retirement plan participants,
177,000 banking accounts, and $1.4 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 (0707-3134).
SOURCE Charles Schwab Corporation
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Related links:
http://www.schwab.com
CONTACT:
Michael Cianfrocca of Charles Schwab
Corporation, +1-415-667-3252, michael.cianfrocca@schwab.com
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