Diversified Portfolios Feature a Satisfaction Guarantee and Low Management
Fees
SAN FRANCISCO, Aug. 23 /PRNewswire-FirstCall/ -- Charles Schwab & Co.,
Inc. today announced the launch of Schwab Managed Portfolios(TM), a suite
of mutual fund portfolios for individuals with as little as $50,000 to
invest who want to benefit from the investment expertise of Schwab's
professional money managers. In addition to highly competitive pricing,
Schwab Managed Portfolios carry a unique satisfaction guarantee: Schwab
will rebate the previous quarter's program fee to anyone who is not
completely satisfied.
Schwab Managed Portfolios consist of eight pre-set mutual fund
portfolios (four taxable and four tax-deferred), at four risk levels,
ranging from moderately conservative to aggressive. Each portfolio invests
in roughly a dozen mutual funds, to achieve the desired asset allocation,
specified risk tolerance and diversification. The portfolios primarily use
equity funds from Charles Schwab Investment Management, which leverages
Schwab Equity Ratings(R)(1), the stock selection methodology that powered
the company's model portfolio to a first place finish in Barron's
performance rankings for five-year performance.(2) Additional funds are
drawn from Schwab's exclusive Mutual Fund OneSource Select List(TM)(3), a
compilation of high-performing, no-load, no-transaction fee mutual funds
selected by the Schwab Center for Investment Research. A version that
invests exclusively in third-party mutual funds is in development.
Annual program fees are based on a percentage of the portfolio's value.
They start at 0.50% and go down to 0.25% at higher asset levels.
Commissions are waived on eligible liquidation transactions that are used
to fund the account. Investors also get access to the lower-cost Select
Share class of Schwab Funds used in the portfolios.
"Many investors prefer to rely on our investment expertise to keep
their portfolios in line given the unpredictable movements of the market.
They may also be put off by the high fees often associated with other
mutual fund advisory programs," said Walt Bettinger, president of Schwab
Investor Services. "We created Schwab Managed Portfolios to address this
increasing demand from investors for a simpler but sophisticated and
affordable solution to their investment needs. Our portfolios carry a
satisfaction guarantee, reflecting our confidence in the rigorous
investment approach Schwab has developed over the past 30 years."
Portfolio design, rebalancing and ongoing administration for Schwab
Managed Portfolios are handled by the Schwab Center for Investment
Research, the developer of Schwab Equity Ratings and architect of Schwab's
winning model portfolios, and Charles Schwab Investment Management (CSIM),
which currently manages more than 70 mutual funds with nearly $170 billion
in assets. Schwab Financial Consultants help investors identify the right
portfolio strategy based on their goals and risk tolerance, and then
provide ongoing service and support, including an annual portfolio review.
Investors also receive quarterly printed performance reports, quarterly
e-mail commentary from portfolio managers and gain/loss and cost basis
information via schwab.com.(4)
With the introduction of this new solution, Schwab now offers retail
clients two ways of implementing a fully diversified portfolio of mutual
funds: Schwab Managed Portfolios, which provide ongoing management by CSIM,
and Schwab Portfolios, for self-directed investors who want initial help
designing their portfolio online and plan to manage it on their own. There
is no charge for the Schwab Portfolios service.
For investors with more complicated portfolios and investing needs,
Schwab offers several services. Schwab Private Client gives investors the
benefits of an ongoing advice relationship with a Schwab Financial
Consultant backed by a dedicated team. Additionally, the company offers a
range of separately managed account strategies. For affluent investors
seeking comprehensive wealth management or customized portfolio
construction and management, referrals are made to pre-screened, fee-based
independent investment advisors through the Schwab Advisor Network(R) and
to U.S. Trust.
For more information on Schwab Managed Portfolios, go to
http://www.schwab.com/smp or call 866-645-4116.
WHEN CONSIDERING MUTUAL FUND INVESTMENTS, YOU SHOULD CONSIDER CAREFULLY
INFORMATION CONTAINED IN THE PROSPECTUS, INCLUDING INVESTMENT OBJECTIVES,
RISKS, CHARGES AND EXPENSES. YOU CAN REQUEST A PROSPECTUS BY CALLING SCHWAB
AT 1-800-435-8000. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
INVESTMENT VALUE WILL FLUCTUATE, AND SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL COST.
About Charles Schwab Investment Management
Founded in 1991, Charles Schwab Investment Management, Inc. (CSIM), an
affiliate of Charles Schwab & Co. Inc., is one of the nation's largest
asset management companies with over $165 billion under management as of
June 30, 2006. It is among the country's largest money market fund managers
and is the third-largest provider of retail index funds. In addition to
managing Schwab proprietary funds, CSIM provides oversight for the
institutional-style, sub-advised Laudus Fund family. CSIM also manages over
$950 million in separately managed accounts. CSIM currently manages 71
mutual funds, including 42 actively-managed funds, and five separate
account model portfolios
About Charles Schwab
The Charles Schwab Corporation (Nasdaq: SCHW) is a leading provider of
financial services, with more than 330 offices and 6.8 million client
brokerage accounts, 527,000 corporate retirement plan participants, 178,000
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 ),
offers 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. The company's other
operating subsidiaries include U.S. Trust Corporation (member FDIC) and
CyberTrader(R), Inc. (member SIPC, http://www.sipc.org ). More information
is available at http://www.schwab.com. (0006-5028)
The Schwab Center for Investment Research(R) is a division of Charles
Schwab & Co., Inc.
Important Disclosures
Please read Schwab's Schedule H of Form ADV for important information
and disclosures relating to Schwab Managed Portfolios.
Diversification strategies do not ensure a profit and cannot protect
against losses in a falling market.
Important details about the Schwab Managed Portfolios satisfaction
guarantee: If at any time you are not completely satisfied with Schwab
Managed Portfolios, at your request we'll refund the program fee for the
previous calendar quarter. The program fee is a percentage of the eligible
assets in your Schwab Managed Portfolios account(s). You will receive a
credit to your Schwab Managed Portfolios account(s) within approximately
four weeks after your request. No other fees, commissions, charges,
expenses or market losses will be refunded. If we are unable to address
your concerns after consulting with you and refunding your fee, we will
help you find a more appropriate program or solution. Schwab reserves the
right to change this guarantee in the future after providing notice. For
additional information regarding program fees, please see the Schwab
Managed Portfolios account application or Individual Retirement
Account application, available at the time you enroll or upon your
request. Guarantee is effective as of July 21, 2006.
(1) Schwab Equity Ratings(R) are objective ratings on approximately
3,000 U.S.-headquartered stocks. Stocks are assigned ratings of A, B, C, D
or F, with As and Bs considered "buys," Ds and Fs "sells," and Cs "holds."
Ratings are generally updated each week to reflect new financial data and
other information. For more information on Schwab Equity Ratings, including
performance details, how performance was calculated, comparison of
performance to benchmarks and limitations of model performance, visit
http://www.schwab.com/serperformance.
(2) Barron's awarded Schwab the first-place rank for the five-year
period from December 31, 2000, to December 31, 2005, for "best of" stock
recommendation lists submitted by certain brokerage firms to Zacks
Investment Research, Inc. ("Zacks"), an independent firm that analyzes
broker research. All hypothetical buy and sell trades were charged a 1%
commission and assumed to take place at the stock's closing price.
Performance of the portfolios submitted was calculated using an
equal-weighted return methodology that is administered by Zacks, an
independent firm, whereas the performance of the S&P 500(R), as noted by,
as noted by Barron's, is stated as the capitalization-weighted return. The
S&P 500 Index represents a list of 500 leading companies from leading
industries. Indices are unmanaged, do not incur management fees and
expenses, and cannot be invested in directly. Each brokerage firm had its
own methodologies in picking its stock lists, which differed in many
respects, including the number of issues held, frequency of trading and
changes of selection criteria over time. Barron's is a registered trademark
of Dow Jones & Company, Inc. All rights reserved.
(3) Schwab receives remuneration from fund companies and/or their
affiliates in the Mutual Fund OneSource(R) service for recordkeeping,
shareholder services and other administrative services. Schwab and its
affiliates also receive fees from the Schwab Affiliate Funds for investment
advisory, administrative and transfer agency services, as well as
shareholder and other fund services. The aggregate fee Schwab or its
affiliates receive from Schwab Affiliate Funds (see prospectus for more
details) is generally greater than that received from fund companies
participating in Schwab's Mutual Fund OneSource service.
(4) Year-end gain/loss summary information is available after the first
full calendar year of enrollment in Schwab Managed Portfolios. This
information is not intended to be a substitute for specific individualized
tax, legal or investment planning advice. Where specific advice is
necessary or appropriate, Schwab recommends consultation with a qualified
tax advisor, CPA, Financial Planner or Investment Manager.
SOURCE Charles Schwab
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Related links:
http://www.schwab.com/
CONTACT:
Sondra Harris of Charles Schwab,
+1-415-636-3292, or sondra.harris@schwab.com
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