Schwab Reduces Fees on Four ETFs to Below 10 Basis Points

Charles Schwab Corp. has slashed fees on four of its equity ETFs, bringing the cost of all its equity and fixed-income market-cap-weighted index ETFs below 10 basis points. The moves highlight investors' preference for the cheapest funds, with the cheapest 20% attracting $930 billion in net inflows last year. The reductions affect the Schwab 1000 Index ETF, Schwab International Equity ETF, Schwab International Small-Cap Equity ETF, and Schwab Emerging Markets Equity ETF.

Charles Schwab Corp. (SCHW) has significantly reduced the fees on four of its equity exchange-traded funds (ETFs), bringing the cost of all its equity and fixed-income market-cap-weighted index ETFs below 10 basis points. The move underscores investors' preference for low-cost funds, with the cheapest 20% of funds attracting $930 billion in net inflows last year [1].

The fee reductions, effective June 10, 2025, affect the Schwab 1000 Index ETF (SCHK), the Schwab International Equity ETF (SCHF), the Schwab International Small-Cap Equity ETF (SCHC), and the Schwab Emerging Markets Equity ETF (SCHE). The expense ratios for these funds have been lowered as follows:

- Schwab 1000 Index ETF (SCHK): 0.05% to 0.03%
- Schwab International Equity ETF (SCHF): 0.06% to 0.03%
- Schwab International Small-Cap Equity ETF (SCHC): 0.11% to 0.08%
- Schwab Emerging Markets Equity ETF (SCHE): 0.11% to 0.07%

These reductions come as Morningstar reports that fund fees hit record lows in 2024, with many index funds and ETFs approaching what may be a pricing floor as some providers offer zero-fee options [2].

John Sturiale, head of product management and innovation at Schwab Asset Management, stated that the company is committed to making investing more accessible. "Today, we’re taking another important step in advancing our commitment to providing investors with low-cost, high-quality building blocks for a well-diversified portfolio," he said [3].

In addition to the ETF fee reductions, Schwab has also announced forward share splits on six mutual funds, including the Schwab 1000 Index Fund (SNXFX), which will undergo a 10-for-1 split to return its net asset value closer to its initial $10 share price after nearly 35 years [2].

These moves align with Schwab's broader strategy to democratize investing and make it more accessible to a wider range of investors. The company's efforts to reduce barriers to investing, raise awareness, and provide robust investing education are all part of its enduring mission to help people reach their financial goals [3].

References:
[1] https://www.etf.com/sections/news/schwab-cut-expenses-4-etfs-fee-wars-wind-down
[2] https://www.businesswire.com/news/home/20250609650185/en/Schwab-Asset-Management-Reduces-Fees-on-Four-Equity-Index-ETFs-and-Announces-Mutual-Fund-Share-Splits
[3] https://www.fa-mag.com/news/charles-schwab-lowers-fees-on-four-etfs-82859.html