Schwab Launching Mortgage-Backed Securities ETF

News November 08, 2024 at 01:35 PM

Share & Print

Schwab Asset Management is launching an exchange-traded fund containing investment-grade mortgage-backed securities, which will start trading around Nov. 19.

The Schwab Mortgage-Backed Securities ETF (SMBS) carries a 0.03% expense ratio, in line with its lowest-priced peers, Schwab said in an announcement Thursday.

The ETF, which will provide easy access to mortgage-backed securities issued or guaranteed by U.S. government agencies, is designed to hold a spot in a diversified portfolio, Schwab said.

"It's been a notable period for the fixed income market, and at Schwab Asset Management we're deeply committed to helping clients with their fixed income investing needs. We're excited to introduce the Schwab Mortgage-Backed Securities ETF as the latest example of that effort," according to Nicohl Bogan, head of Passive Product Management & Innovation, Schwab Asset Management.

"This launch is a prime example of how we are leveraging our scale and deep capital markets expertise to bring investors and advisors competitively priced offerings that provide core market exposures for well-diversified portfolios," Bogan said.

The ETF will aim to track the Bloomberg U.S. MBS Float Adjusted Total Return Index.

Charles Schwab's Schwab Asset Management has become the fifth-largest ETF provider, the firm said. As of Sept. 30, it managed about $1.3 trillion on a discretionary basis and $40.7 billion on a non-discretionary basis.

Image: Bloomberg

NOT FOR REPRINT