Banking & Finance

Schwab New ETFs Hit Small-Cap and Emerging Markets (SCHW, SCHC, SCHE)

Douglas A. McIntyre

Charles Schwab Corp. (NASDAQ: SCHW) has launched two new ETF products today.  The Schwab International Small-Cap Equity ETF (NYSE: SCHC) and the Schwab Emerging Markets Equity ETF (NYSE: SCHE) have begun trading.  The new Schwab ETFs are aimed to have very low expense ratios as each have an expense ratio of 0.35%.  These can also be bought and sold (as with other Schwab ETFs) without having to pay commissions via online trading in the Schwab accounts.  In short, these are no-load ETF products if you trade them through an online account Schwab.

As of January 12, 2010, Schwab noted that it had some $419 million in assets under management in the first six Schwab ETFs it has recently launched.  The funds were also noted as having seen their trading volume rising steadily across the six ETFs since inception.

The trading volume is there on these today so far.  SCHC as of NOON has traded 46,000 shares and and SCHE has traded 77,000 shares.  Not bad for a first day effort.

Some, including myself, wondered how these would do for trading volumes after they were launched.  Our own bogey for measuring success of an ETF for liquidity is 100,000 shares per day.  That may be a higher bar than others have, and may be lower than others.

The average volume listed for the other recently launched Schwab ETF products is as follows:

  • SCHB 192,000 shares per day; 53,000 shares just after NOON today
  • SCHX 133,000 shares per day; 41,000 shares just after NOON today
  • SCHA 123,000 shares per day; 34,000 shares just after NOON today
  • SCHF 150,000 shares per day; 57,000 shares just after NOON today
  • SCHV 28,900 shares per day; 26,000 shares just after NOON today
  • SCHG n/a on average; 48,000 shares just after NOON today

These might not be liquid as the FAS/FAZ intraday leveraged ETF or the SPY/QQQQ ETF products, but it would be difficult to call these a disappointment so far.  There are still short of 1,000 ETFs in the US, but that may change rather quickly.  Many new ETFs are planned, and many of the large brokerage firms want a piece of the ETF pie.  After all, recent reports put the ETF assets now over $1 trillion……