Charles Schwab (SCHW) is seeing an increase in ETF assets, with assets under management rising 30% in September compared to a year ago.
According to ETF Trends, the San Francisco discount broker had ETF assets of $380 billion at the end of September, up from $292 billion in the same period a year ago, which marks a 30% year-over-year increase. Schwab’s registered investment advisor clients had ETF assets of $201 billion in September, up 31% from the $154 billion at the end of September of 2016, representing the largest jump in demand from a year-ago. Retail investors' ETF assets jumped 27% to $132 billion from $104 billion while retail traders ETF assets increased 37% to $47 billion from $34 billion, noted ETF Trends.
For the twelve months ended in September, demand for ETFs were highest among retail investors increasing 42%. Retail traders' ETF assets jumped only 9% but was up from 5% last year. ETF usage by RIA clients at Charles Schwab fell to an increase of 49% for the year ending in September after being up 60% last year. ETF Trends found U.S. fixed income ETFs attracted the most investments at Schwab, coming in at $3.9 billion for the third quarter, while the international equity fund saw inflows of $3 billion and U.S. equity ETFs had an increase of $1.5 billion in investment assets in the three month period ended in September.
The increase in investments going into ETFs at Charles Schwab comes at a time when the discount brokerage is trying to make more inroads in that side of its business. Earlier this month Schwab announced a new exchange traded fund that takes aim at BlackRock, Vanguard, and State Street, thanks to a lower expense ratio. The Schwab 1000 Index ETF provides investors with a low-cost way to get exposure to the 1,000 largest stocks in the U.S. The new ETF, which has an operating expense ratio of 5 basis points, or 0.05%, began trading on Oct. 11 and is available through the company’s commission-free ETF program in which it offers investors access to more than 200 ETFs that don’t have commissions attached to them. This isn't the first time Schwab has launched an ETF that beats rivals on the pricing front. Because of its low-cost strategy, it has been able to make a name for itself in the ETF world in a short period of time.