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Mutual Funds

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WHAT YOU SHOULD KNOW

Each dollar spent in operating expenses can impact returns.

Operating expense ratios (OERs) cover the management of the fund, the sales, and the distribution (12b-1 fee). These fees can vary, so it pays to compare OERs, especially on similar funds. In general, the smaller, more niche, and global the fund’s investments are, the higher the operating expenses, because of the extra work involved.
    

What is the general range for this fee?

Actively managed funds: 1.50% | Indexed or passive funds: 0.25%

Global equity funds (actively managed or index): 0.80%

 

Impact of fees and expense ratio

Hypothetical illustration based on a $200,000 investment split evenly between two funds.

After 30 years, Fund A earns almost $250,000 more than Fund B.

0 $0 $500,000 $750,000 $250,000 $1,000,000 10 20 30 Years Return on Investment $100,000 Fund B(Expense Ratio 1.19%) Fund A(Expense Ratio 0.2%) 0 $0 $500,000 $750,000 $250,000 $1,000,000 10 20 30 Years Return on Investment $100,000 Fund B(Expense Ratio 1.19%) Fund A(Expense Ratio 0.2%)

What can I do about this?

Once you know the type of fund you want, based on your objectives and risk tolerance, compare the OERs of similar funds within that type. (OERs are often available online.)

To access and compare thousands of mutual funds, see Schwab Mutual Fund OneSource®.

Get clear on fees.

How are fees impacting your returns?

Find out by asking these key questions.

Questions? We’re ready to help.


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

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost.