Charles Schwab Corporation is one of the top financial institutions in the US. It has over 45 years of experience in investment services for clients. Its ETF funds are notable for low costs and zero minimum requirements. You could miss more of the benefits if you plan to invest in ETFs and look another way than the fund Schwab total stock market ETF.
Total Stock Market Index Fund(SWTSX)
Charles Schwab Total Market Index Fund(SWTSX) is an exchange-traded fund that tracks the entire US stock market’s total return. It invests according to the Dow Jones US stock market index.
The Dow Jones US Stock Market Index
Also called the US Dow Jones Index, it is a market capitalization-weighted index. The stocks with the largest market value measure up the most proportions of the index. It covers 95% of the US stock market and calculates the total return of the stocks covered with reinvestments of dividends and interests.
Currently, it tracks 3,778 stocks in the US market as of December 31, 2020. They are the most liquid stocks traded on the exchanges. Foreign companies and exchange-traded funds are not inclusive. The index provides a useful indicator of US market trends and company performances.
Details of Schwab Total Stock Market ETF
- Type: US stock market ETF
- Symbol: SWTSX
- Low Net Expense Ratio: 0.03%
- Investment Objective: The fund’s goal is to track the entire US stock market’s return, as measured by the Dow Jones US Total Market Index.
- Highlights: a. A straightforward, low-cost fund with no minimum investment. b. The fund can serve as part of the core of a diversified portfolio. c. Simple access to the entire US market in one fund. d. The index is designed to provide a comprehensive measure of large-cap, mid-cap, and small-cap US equity securities.
- Assets Under Management: US13.7billion as of December 31, 2020.
- Return for Dec 31, 2020: 20.71%
- One-year Turnover rate: 3.79% It is the cost of change of portfolio holdings in a year. The higher the percentage, the higher fees the fund incurs!
- Minimum Initial Investment: None
Schwab Total Market Index Fund
1. Low-cost fund without minimum
Whether you are newbies or experienced investors, the fund is a fit for all as there is no minimum investment requirement and the expense ratio is only 0.03% low.
If you plan to hedge your portfolios against risks, the fund is a protection against other risky assets in your investment planning.
3. Simple access to the US market
It is one click to the whole US market and almost all sectors and large-cap, mid-cap, and small-cap companies.
4. Sectors invested
The fund covers major industries all across the US. As of December 31,2020, among them are information technology(27.10%), healthcare(13.90%), customary discretionary(12.40%), financials(10.90%), commercial services(9.90%), industrials(9.20%). They consist of more than 40% of the total portfolio of the fund.
5. Enterprises invested
It invests mainly in primary blue-chip enterprises. The major companies include Apple Inc., Microsoft Corporation, Amazon.com.inc., Facebook class A, Tesla Inc., Alphabet Inc. class A & C, Berkshire Hathaway class B, Johnson & Johnson, JP Morgan Chase & Co. They take up more than 20 percent of the total portfolio.
6. Firearm holdings
A point you should note is Charles Schwab has a transparent policy regarding investing policy. It will disclose some securities that may cause harm to society. The Schwab Total Stock Market ETF reveals only a 0.03% stake of the fund in firearms companies as of March 31, 2020. It offers conscious investors their open and transparent approach to investing.
About Charles Schwab Corporation
The Charles Schwab Corporation is a member of Standard & Poor’s 500 Index with more than US100 billion market value. Its business scope covers investing, banking, and consulting services. Charles Schwab has assets under management for over US500 billion as of June 30, 2020, since it first set up the mutual fund and ETF business.
Objective: Charles Schwab helps investors better manage their mutual funds and reduce the costs of buying mutual funds by setting up the Schwab Mutual Fund OneSource@ and making investing easier and low-cost. Furthermore, Charles Schwab makes Exchange-Traded funds(ETF) accessible to all by investing in all market ETFs commission-free. That makes investors save more in return to earn more. Schwab total stock market fund series, including ETFs, nowadays have become popular among investors.
Management style: ETFs are passively managed funds based against a stock market index like Standard & Poor’s 500(S & P 500) or Dow Jones Industrial Average(DJIA). It saves investors time to pick stocks and manage their portfolios by mimicking the stocks of market indexes. Charles Schwab goes a further step; it offers Schwab Intelligent Portfoliotm service, an online investment advisory service assisting the management of their portfolios. The fascinating thing is it is free for its clients.
Commission: Of course, we know the trend is for zero-commission; Charles Schwab also offers commission-free for stocks, ETFs, and options trades. Moreover, it uses an order strategy called the Schwab Order Execution Advantagetm to improve clients’ order quality. Through their unique system, clients get better price quotes and faster execution speed.
Robo-advising service: The company offers Schwab Intelligent Portfoliostm, to help manage clients’ portfolios by building, monitoring, and rebalancing assets automatically. The fantastic thing is it is free from advisory fees, account service fees, and commission. You should discuss this with your consultant.
Useful investment tool: What makes Charles Schwab outstanding is its research. Besides their professional research on equities, bonds, and funds, they have rate stocks and mutual funds based on their rating system. Charles Schwab offers a useful investment tool called “Screen List” reviewed by experts and released quarterly. The tool lets you pre-screen the ETFs and mutual funds well picked by professionals according to categories like big-cap, mid-cap companies.
Apart from that, you can get quotes and fund prices and market updates, and even create watch lists from Google Assistant and Amazon’s Alexa!
To Sum Up
The Schwab Total Stock Market ETF offers many benefits to all walks of investors with its low-cost expenses, no minimum investment requirements. You can access a wide span of industrial sectors and invest in major corporations in the US economy with this fund. It plays a safe bet against risks within your portfolio. Investors are accessible to Charles’s transparent approach to investing.
Finally, you should cross-examine more analysis and information before making a judgment. Besides talking to your financial advisor, you should seek more knowledge from sources like investoralist. An online magazine provides valuable investing information you should not miss; subscribe now to receive updates!