Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, has launched its Schwab Mortgage-Backed Securities exchange-traded fund (ETF). The first day of trading is expected to be on or about November 19.
With an expense ratio of 0.03%, the Schwab Mortgage-Backed Securities ETF is priced in line with lower priced peer ETFs based on the U.S. Mortgage Lipper category. The ETF will provide access to investment-grade mortgage-backed securities issued and/or guaranteed by U.S. government agencies. It is designed to serve as part of a diversified portfolio.
“It’s been a notable period for the fixed income market, and at Schwab Asset Management we’re deeply committed to helping clients with their fixed income investing needs. We’re excited to introduce the Schwab Mortgage-Backed Securities ETF as the latest example of that effort,” said Nicohl Bogan, head of Passive Product Management and Innovation at the firm, in a statement. “This launch is a prime example of how we are leveraging our scale and deep capital markets expertise to bring investors and advisors competitively priced offerings that provide core market exposures for well-diversified portfolios.”
The goal of the ETF is to track as closely as possible, before fees and expenses, the Bloomberg US MBS Float Adjusted Total Return Index. The ETF invests in mortgage-backed pass-through securities guaranteed by the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac).
The launch of the Schwab Mortgage-Backed Securities ETF occurs when the firm is celebrating 15 years since entering the ETF space.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
