Download the Schwab app from iTunes®Get the AppClose

  • Find a branch
  • Chat
To expand the menu panel use the down arrow key. Use Tab to navigate through submenu items.

Accounts & Products
Questions? Get answers now. Live Chat.
 

Exchange-traded funds (ETFs)

Print

An ETF, or exchange traded fund, is an investment fund or portfolio of securities that holds assets like stocks, bonds or commodities. Most ETFs track market indexes, from the very broad to the very narrow. ETFs aren't purchased or sold once a day like a mutual fund, but instead trade like stocks on an exchange and experience price changes throughout the day as shares are bought and sold from one investor to another.

Save on ETFs.

  • Schwab ETF OneSource™ offers over 200 commission-free ETFs from leading providers including Charles Schwab Investment Management, State Street SPDR®, Guggenheim Investments, PowerShares, ETF Securities, United States Commodity Funds, Direxion Investments, Global X Management Company, LLC, IndexIQ, ProShares, WisdomTree, PIMCO, ALPS Advisors, Inc. and J.P. Morgan Asset Management, Inc., Deutsche Asset Management and John Hancock Investments.  
  • Schwab ETFs™ include both Market-Cap Index ETFs and Fundamental Index® ETFs, two different ETF methodologies that can work well together. For broader diversification, consider using both when building your portfolio.

Consider professional management of your ETF investments.

Schwab Intelligent Portfolios

Schwab Intelligent Portfolios, an automated investment advisory service, will build monitor and rebalance your portfolio. $5,000 minimum. No advisory fees, account service fees or commissions are charged.

Schwab Managed Portfolios – ETFs

Get professionally managed portfolio of ETFs at a competitive price, with ongoing advice from a Schwab investment professional. $25,000 minimum.

Windhaven® Strategies

Learn more about our professionally managed ETF strategies, composed primarily of ETFs that seeks to capture much of the growth in rising markets while attempting to reduce exposure in declining ones. $100,000 minimum for brokerage/IRA accounts.

Research and find ETFs.

  • Learn more about ETFs by using our learning center and our comprehensive research tools and reports.
  • Find and compare up to three ETFs at once using our extensive ETF research and helpful screeners to compare cost, quality, holdings and performance.
  • Use our ETF Portfolio Builder® to create a diversified ETF portfolio based on your selected risk profile.
  • View charts to see the fund’s benchmark performance, fund strategy details, and Morningstar style and ratings. Browse all Schwab ETFs™.

Start Investing with ETFs Today.

Open an Account

Need help? Call 800-435-4000.

Want to learn more about choosing an ETF?

Watch the video or read below for answers to the top five questions you should ask before investing in ETFs.

Learn More About Choosing an ETF

So you're thinking about investing in an exchanged-traded fund.  You've decided on the asset class you want to invest in, and you found a few ETFs that could be right for your portfolio, but how do you know which of those ETFs is the right ETF for you?  Start by asking yourself these five important questions about any ETF you're considering.  Let's take them one-by-one. 


First, what's the expense ratio?  When you're choosing an ETF cost is an important factor.  The expense ratio is the percentage of fund assets that are deducted every year to cover management fees.  Check to make sure that your ETF has an expense ratio that's low compared to other funds in the same category. 

Question 2:  What will you pay in trade commission?  Trade commission is the second part of the cost equation.  It's the fee you pay every time you buy or sell an ETF.  Look for a low commission or no commission at all, if possible. 

Question 3:  What's the bid/ask spread?  The bid/ask spread is another cost.  This is the difference between the ETF's bid price, which is the price a buyer is willing to pay for a share, and its ask price, which is the price a seller is willing to accept for a share.  Often, the more an ETF is traded, the smaller the bid/ask spread, and the smaller the bid/ask spread, the more of your money goes to the actual investment, which is better for you.  Look for a spread of just a few pennies.

Question 4:  What are the fund's total assets under management?  You've considered the cost of your ETF.  Now, look at the quality.  Assets under management refers to the amount of money that's already been invested in the ETF.  It's a pretty good indicator of the fund's viability.  Schwab's experts prefer ETFs that have at least $20 million in assets, and, preferably, much more. In general, the more assets under management, the better.

Question 5:  How do the ETF's returns compare to its benchmarks' returns?  What you want to see is the ETFs performance tracking closely to the performance of its benchmark over time.  If there are significant differences between the two sets of returns, it could mean that you're looking at a potentially riskier investment.

So those are our five questions.  Let's see how asking them can help you decide between two similar ETFs from the same asset class.  We'll take two hypothetical ETFs and ask what's the expense ratio, the trade commission, the bid/ask spread, what are the assets under management, and how well do its returns track to the benchmark?  While this is a simple example, working through these five questions really can help you see which ETF might be a better pick. 

Ready to find the ETF that's right for your portfolio?  Schwab's ETF evaluation tools are a great place to start.  You'll find them at Schwab.com/ETFTools.  And if you need help as you choose the right ETF for you, just call us at 877-769-8003.




Take the next step.

Open an account at Schwab today to start saving on ETFs.

Open an Account Call 866-855-7728. Visit a branch.



Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can request a  prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.