Asset Management

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Index

Index mutual funds and index exchange-traded funds (ETFs) can help provide efficient access to a wide swath of markets—often at lower costs than actively managed funds.

Introducing the Schwab Mortgage-Backed Securities ETF

With an expense ratio of just 0.03%, SMBS provides low-cost access to investment-grade mortgage-backed securities (MBS) issued and/or guaranteed by U.S. government agencies. SMBS could be a good fit for clients seeking income and portfolio diversification.

Explore SMBS

SMBS

Schwab Mortgage-Backed Securities ETF

Our approach

We focus on the investor, rather than chasing down the latest investment trend. Our index mutual funds and index ETFs include simple, low-cost, core investment products, spanning both the equity and bond markets, and can help offer the diversification required in a well-rounded portfolio.

Index solutions
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Low-cost index philosophy

Expenses matter. Every basis point counts in helping investors achieve their investment goals. That's why we're focused on offering the index products investors and their advisors want—at competitive costs.

What we offer

In 1991, we launched our first index fund, the Schwab 1000 Index® Fund, based on Schwab's proprietary index methodology. Since then, we've become the fifth-largest ETF provider in the U.S., with over $297 billion in AUM, and the third-largest retail index mutual fund provider in the U.S., with over $198 billion in AUM.1 We offer index products that give investors the tools to help build a diversified portfolio.

Differentiators

  • Among the lowest costs in the industry.
  • No minimum investment.
  • 22 out of 30 of our index ETFs exceed $1 billion in AUM.2

Benefits

  • Established, long-tenured investment management expertise.
  • Opportunity to build a diversified portfolio for only four basis points on average by investing in just three Schwab ETF products.3
  • Average expense ratio of 10 basis points across our index ETFs and 14 basis points across our index mutual funds.4
Learn more about Schwab index mutual funds and index ETFs

Schwab market cap index ETFs

Schwab ETF expenses are among the lowest in the industry. Over 90% of Schwab market cap index ETFs have expenses lower than 0.10%, with an asset-weighted average total expense ratio of just 0.05%.5

Compare costs of Schwab market cap index ETFs
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Schwab Fundamental Index* mutual funds and ETFs

While fund expenses should not be the only factor in choosing a strategic beta strategy, selecting a strategy with a low expense ratio remains an important consideration—especially over long time horizons. The asset-weighted average total expense ratio for Schwab Fundamental Index ETFs and mutual funds is 0.28% and 0.26%. 6

Learn more about Schwab Fundamental Index mutual funds and ETFs

Schwab market cap mutual funds

Schwab offers market cap index mutual funds with no minimums at among the lowest costs in the industry. All Schwab market cap index mutual fund expenses are less than 0.10%, with an asset-weighted average total expense ratio of just 0.03%.5

Learn more about Schwab market cap mutual funds
Schwab market cap mutual funds

Advisor resources

Fee impact simulator

Use the fee impact simulator to see the long-term effects of expenses on a portfolio.

Fee impact simulator
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ETF education hub

Explore tools, analysis and insights designed to help advisors refine their ETF strategy and help meet their clients’ financial goals.

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Featured index products

See our highlighted index mutual funds and ETFs or browse all our investment products.

SCHD

Schwab U.S. Dividend Equity ETF

SWPPX

Schwab S&P 500 Index Fund

SMBS

Schwab Mortgage-Backed Securities ETF

* Schwab is a registered trademark of Charles Schwab & Co., Inc. Fundamental Index is a registered trademark of Research Affiliates, LLC.

1. All rankings based on assets under management (AUM) as of March 31, 2025. Third largest retail index mutual fund provider. Fifth largest provider of ETFs. Sources: Schwab Asset Management.

2. Based on assets under management (AUM) as of March 31, 2025.

3. As of March 31, 2025. Refers to Schwab U.S. Broad Market ETF, net expense ratio 0.03%, Schwab International Equity ETF, net expense ratio 0.06%, and Schwab U.S. Aggregate Bond ETF, net expense ratio 0.03%.

4. Source: Morningstar as of March 31, 2025.

5. Sources: Morningstar as of March 31, 2025. Schwab Asset Management, as of March 31, 2025, Expense ratios are subject to change. The asset-weighted average total expense ratio is a measure of the average annual cost of investing in a particular category of funds and takes into account the expense ratios of individual funds within the category and weights them based on their respective assets under management (AUM). The asset-weighted average total expense ratio is used because it can provide a more accurate representation of the average costs incurred by investors in a particular fund category relative to other averages since it takes into account the funds' relative sizes. 

6. Sources: Morningstar as of March 31, 2025, based on the Morningstar Strategic Beta Group classification. Schwab Asset Management, as of March 31, 2025, Expense ratios are subject to change. The asset-weighted average total expense ratio is a measure of the average annual cost of investing in a particular category of funds and takes into account the expense ratios of individual funds within the category and weights them based on their respective assets under management (AUM). The asset-weighted average total expense ratio is used because it can provide a more accurate representation of the average costs incurred by investors in a particular fund category relative to other averages since it takes into account the funds' relative sizes.

Investors should consider carefully information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses. You can obtain a prospectus, or if available, a summary prospectus by visiting www.schwabassetmanagement.com/prospectus.  Please read it carefully before investing.

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Shares of ETFs are not individually redeemable directly with the ETF. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

SMBS

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.

Mortgage-backed securities (MBS) may be more sensitive to interest rate changes than other fixed income investments. They are subject to extension risk, where borrowers extend the duration of their mortgages as interest rates rise, and prepayment risk, where borrowers pay off their mortgages earlier as interest rates fall. These risks may reduce returns.

Certain U.S. government securities that the Schwab Mortgage-Backed Securities ETF invests in are not backed by the full faith and credit of the U.S. government, which means they are neither issued nor guaranteed by the U.S. Treasury. There can be no assurance that the U.S. government will provide financial support to securities of its agencies and instrumentalities if it is not obligated to do so under law. Also, any government guarantees on securities the fund owns do not extend to the shares of the fund itself.

SCHD

Dividend focused funds may underperform funds that do not limit their investment to dividend paying stocks. Stocks held by the fund may reduce or stop paying dividends, affecting the fund’s ability to generate income.

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

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Investment and Insurance Products Are: Not FDIC Insured • Not Insured by Any Federal Government Agency • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any of Its Affiliates • Subject to Investment Risks, Including Possible Loss of Principal Amount Invested

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