Schwab Launches Muni Bond ETF

News September 28, 2022 at 12:15 PM

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Schwab Asset Management announced plans Wednesday to introduce the Schwab Municipal Bond ETF (NYSE Arca: SCMB) on or about Oct. 12.

The ETF will carry a 0.03% expense ratio, which the firm described as a lower cost than those imposed by comparable funds. The fund will provide access to the broad U.S. investment grade, tax-exempt bond market, with the added benefit of potentially greater tax efficiency of the ETF structure.

Schwab said its municipal bond ETF can serve as part of a diversified portfolio's core holdings.

"As bond yields have risen, fixed income investing is more attractive than it has been in years, making this an opportune moment to introduce a new choice for investors seeking a low-cost, straightforward approach to income, diversification and risk management in their portfolios," John Sturiale, head of product management and innovation, Schwab Asset Management, said in a statement.

The Schwab Municipal Bond ETF aims to closely track, before fees and expenses, the total return of the ICE AMT-Free Core U.S. National Municipal Index, which measures the performance of the U.S. AMT-free municipal bond market. It seeks to provide income exempt from federal taxes and not subject to the federal alternative minimum tax, the firm said.

The fund, Schwab Asset Management's eighth bond ETF and the 29th Schwab ETF overall, invests only in high-quality, investment-grade rated securities, according to the organization.

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