Schwab Lowering Fees
In a letter to clients Walter Bettinger II, CEO of Schwab, announced the lowering of expense ratios in the Schwab Equity Index Funds. Schwab is looking to damper Fidelity’s marketing pitch of having the lowest cost S&P 500 Index Fund. Vanguard and Fidelity have been competing for this honor for years.
The biggest benefit of Schwab’s announcement may not be the fee cuts (miniscule differences in fees among the big players), but the fund minimums. Investors can start with as little as $100 in the Schwab S&P 500 Fund. See below for a comparison of S&P 500 Index funds…
- Schwab S&P 500 Index Fund
(SWPPX) $100 minimum, .09% expense ratio - Vanguard 500 Index Fund Investor Class
(VFINX) $3,000 minimum, .18% expense ratio - Vanguard 500 Index Fund Admiral Shares
(VFIAX) $100,000 minimum, .09% expense ratio - Fidelity Spartan 500 Index Investor Class
(FSMKX) $10,000 minimum, .10% expense ratio - Fidelity Spartan 500 Index Advantage Class
(FSMAX) $100,000 minimum, .07% expense ratio


Comments
A very timely article! I have just been comparing various index funds for an IRA I want to open up, and have been disappointed by the fees and minimums. Now I’ll go check out Schwab and see what they have.