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A Piece of the Pie

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.

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Important Disclosures

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

Indexes are unmanaged, do not incur management fees, costs or expenses, and cannot be invested in directly.

The Schwab 1000 Index includes the stocks of the largest 1,000 publicly traded companies in the United States, with size determined by market capitalization (total market value of all shares outstanding). The index is designed to measure the performance of large- and mid-cap U.S. stocks.

The S&P 500 Index is a market-capitalization-weighted index comprising 500 widely traded stocks chosen for market size, liquidity and industry group representation.

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