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Mutual Fund OneSource Select List

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Looking for quality mutual funds for your portfolio? All funds on our quarterly Mutual Fund OneSource Select List® have been rigorously screened and have no loads or transaction fees. It’s easy to use our experts’ list of top fund picks to find the right mutual funds for you.

Facts about the Mutual Fund OneSource Select List

With thousands of mutual funds available, finding the right funds for your portfolio can seem more time-consuming and difficult than ever. The Mutual Fund OneSource Select List®, consisting only of OneSource funds available without a load or transaction fee, is a smart solution that can help you make confident investment decisions.

To build the Schwab Mutual Fund OneSource Select List and the Schwab Income Mutual Fund Select List, Charles Schwab Investment Advisory, Inc. (CSIA) starts by analyzing the funds tracked by Morningstar using quantitative and qualitative selection criteria described below. Then, based on its analysis, CSIA builds the Mutual Fund OneSource Select List and Income Select list by selecting the most favorably evaluated OneSource funds, including Schwab Funds and Laudus Funds ("Schwab Affiliate Funds"), within each Morningstar category.

Only actively managed OneSource funds are included in this version of the OneSource Select List. CSIA includes up to two index funds for each of the large-cap, small-cap, international and taxable bond asset classes on the electronic version of the OneSource Select List available on schwab.com. Index funds have separate selection criteria. Visit the OneSource Select List on schwab.com to view index funds and to learn more about how index funds are selected.

ELIGIBILITY REQUIREMENTS

Each OneSource Select List and Income Select List fund must:

  • Be no-load and open to new investors at Schwab in all 50 states.
  • Have a minimum three-year performance track record (except funds that are listed below the "Leading Schwab Affiliate Funds" sections of the lists, which are eligible if they have a minimum 12 months performance track record under their current management and/or current investment objectives and strategy).
  • Have at least $40 million in assets (except for small-cap value, high yield, multisector bond, world bond, emerging market equity and bond, diversified Pacific Asia, Pacific Asia ex-Japan, Europe, Japan, Latin America, convertibles, retirement income, target date and specialty funds, which require at least $20 million in assets). To meet this requirement, assets in multiple share classes of the same fund may be aggregated.


Additionally, each Income Select List fund must:

  • Demonstrate a track record of making income distributions in each of the prior five calendar years (or during every full calendar year since inception in the case of funds with less than a five-year track record, including Schwab Affiliate Funds which may have a 12-month track record).
  • For fixed income funds, make income distributions on at least a quarterly basis; and—with the exception of the high-yield, multisector and emerging markets bond categories—not allocate in excess of 30% to issues rated below investment grade.
  • For equity funds, offer a current yield in excess of their category average; and for equity funds with "dividend" or "income" in their name, make income distributions at least quarterly.
  • With the exception of specialty sector (REITs) and fixed income funds, not allocate in excess of 33% to any single sector.


SELECTION CRITERIA

Actively Managed OneSource Funds, including Schwab Affiliate Funds, are evaluated by CSIA based on a quantitative analysis of risk, performance, expenses, active share (when meaningful), assets under management and asset flows. CSIA also may apply additional qualitative factors to its analysis to enhance its overall evaluation of a fund, including, for example, changes in a fund’s investment strategy or management structure, portfolio manager tenure, whether a fund’s investment style and portfolio holdings are representative of its investment category, portfolio composition and turnover rates, consistency of a fund’s performance and CSIA’s evaluation of the fund over time, and other risk and diversification considerations.

In addition, for the Income Select List, those funds with the best capital preservation attributes and investment strategies that focus on selecting income-generating securities will receive preference when selecting from similarly rated funds with comparable yield characteristics.

"Leading Schwab Affiliate Funds" sections of the Select List and Income Select List feature eligible actively managed Schwab Affiliate Funds that generally fall into the top 35 percent of all CSIA-evaluated funds (including OneSource and non-OneSource funds) in their respective Morningstar categories. If two or more Schwab Affiliate Funds that fit this criteria also have similar investment styles, CSIA may determine that only the most favorably evaluated fund(s) be included in the list. Because Schwab Affiliate Funds included in the "Leading Schwab Affiliate Funds" section of the OneSource Select List and Income Select List are selected independently from other actively managed funds on the list, they may have a less favorable evaluation overall than the funds listed in the "Leading Third-Party Funds" section of the list.

"Leading Third-Party Funds" sections of the OneSource Select List and Income Select List feature eligible actively managed third-party OneSource funds that generally fall within the top 35 percent of all CSIA-evaluated funds within a given Morningstar category and that receive the most favorable evaluations in their respective categories.

For the OneSource Select List, CSIA generally includes the five most-favorably evaluated funds in each of the large-cap, small-cap, intermediate-term bond, municipal national intermediate and foreign large blend asset categories and the two most favorably evaluated funds in all other asset categories. If two or more of the most favorably evaluated funds within an asset category have similar investment styles, CSIA may substitute a less-favorably evaluated fund for one or more of those funds to provide a more diverse selection of fund investment strategies.

For the Income Select List, CSIA generally includes no more than the two most favorably evaluated funds in each asset category, except for the intermediate-term bond category, which may feature up to five funds.

The Index Fund section of the Select List features up to two index funds for each of the large-cap, small-cap, international, and taxable bond asset classes. Index funds have similar selection criteria to actively managed OneSource funds. These funds are evaluated by CSIA based on a quantitative analysis of risk, performance, expenses, active share (when meaningful), and assets under management. CSIA also may apply additional qualitative factors to its analysis to enhance its overall evaluation of an index fund, including, for example, the breadth of the index tracked by the fund, the index construction methodology, and the tracking error of the fund to its underlying index.

The third-party index fund and Schwab affiliate index fund that receives the most favorable evaluation by CSIA in each asset class is included on the Select List. If two index funds receive equal evaluations, CSIA will generally include the fund that has the lower expense ratio.

Additional Important Information 

Approximately 2,100 funds participate in the Mutual Fund OneSource® service. Only these funds, including Schwab Affiliate Funds, are eligible for the OneSource Select List. Schwab receives remuneration from fund companies, and/or their affiliates, in the Mutual Fund OneSource service for record keeping, shareholder services and other administrative services. Schwab and its affiliates also receive fees from the Schwab Affiliate Funds for investment advisory and fund administration services. The aggregate fees Schwab or its affiliates receive from Schwab Affiliate Funds (see fund prospectuses for more details) are greater than the remuneration Schwab receives from other fund companies participating in Schwab's Mutual Fund OneSource service. The amount of fees Schwab or its affiliates receive from funds participating in the Mutual Fund OneSource service is not considered in the Select List selection, nor does any fund pay Schwab to be included in the Select List. Eligible funds are selected based solely on the quantitative and qualitative criteria described above.

Schwab Affiliate Funds include Schwab Funds and Laudus Funds. Schwab Funds and Laudus Funds are advised by Charles Schwab Investment Management, Inc. Schwab Funds and the Laudus MarketMasters Funds are distributed by Charles Schwab & Co., Inc. and Laudus Funds (except Laudus MarketMasters Funds) are distributed by ALPS Distributor, Inc.

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

Investment value and return will fluctuate such that shares, when redeemed, may be worth more or less than their original cost.