Our mission at Schwab has always been simple: make investing more accessible and cost-effective so it’s easier for everyday people to achieve their goals. In 1991, we launched the Schwab 1000® Index and the mutual fund that tracks it to support that mission, by creating a straightforward tool that captured the returns of the companies driving the American economy. Looking back now, how did the idea play out? Pretty well, I’d say.
That one index provides exposure to 90% of total U.S. market capitalization—compared with just 70% for another well-known index, the S&P 500®. In addition to large-cap stocks, the Schwab 1000 includes mid-caps: a group of growing companies with the potential to mature into tomorrow’s industry leaders. This combination of established large-cap companies and promising mid-caps has, over its lifetime, produced an annualized return of 9.78% (compared with 9.53% for the S&P 500 over the same period).1 Put another way, $100,000 in the Schwab 1000 at its launch would have grown to more than $1 million by March 31, 2017.2
Indexes, and the mutual funds and exchange-traded funds that track them, can help investors achieve broad diversification and mirror the growth of domestic and foreign markets. Since the birth of the Schwab 1000, we’ve continued to drive down the cost of investing so that more of your hard-earned money can be put to work for you. To learn more about indexing at Schwab, give us a call or visit schwab.com/indexing.
Charles R. Schwab
Founder & Chairman
1Morningstar, as of 03/31/2017.
2Returns assume reinvestment of capital gains and dividends but do not take fees, expenses or taxes into consideration. If they had been considered, performance would have been lower. Indexes cannot be invested in directly. Past performance is no guarantee of future results.