Schwab to Launch the Schwab Municipal Bond ETF

Schwab Asset Management, the asset management arm of The Charles Schwab Corporation, today announced the launch of the Schwab Municipal Bond ETF (NYSE Arca: SCMB). The first day of trading is expected to be on or about October 12.

With an expense ratio of 0.03%, the Schwab Municipal Bond ETF comes to market at a lower cost than comparable funds¹. This ETF provides access to the broad U.S. investment grade, tax-exempt bond market with the additional benefit of potentially higher tax efficiency of its ETF structure. It can serve as part of the core of a diversified portfolio.

“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,” said John Sturiale, Head of Product Management and Innovation, Schwab Asset Management. “With the launch of the Schwab Municipal Bond ETF, we at Schwab Asset Management are extending our legacy of low-cost leadership and expanding our well-established line-up of bond ETFs that can play an important role in a diversified portfolio.”

The Schwab Municipal Bond ETF’s goal is to track as closely as possible, 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 (AMT). The fund has a high credit quality profile, investing only in investment-grade rated securities.

The fifth largest provider of ETFs, Schwab Asset Management has more than a decade of experience managing ETFs and a robust capital markets team that plays a crucial role in ensuring the Schwab ETFs function efficiently. Schwab bond ETFs seek to be among the lowest cost across the industry’s leading ETF providers. The Schwab Municipal Bond ETF is Schwab Asset Management’s eighth bond ETF and the 29^th Schwab ETF overall.

For more information, review the prospectus here.

About Schwab Asset Management

One of the industry’s largest and most experienced asset managers, Schwab Asset Management offers a focused lineup of competitively priced ETFs, mutual funds and separately managed account strategies designed to serve the central needs of most investors. By operating through clients’ eyes, and putting them at the center of our decisions, we aim to deliver exceptional experiences to investors and the financial professionals who serve them. As of June 30, 2022, Schwab Asset Management managed approximately $575.9 billion on a discretionary basis and $34.4 billion on a non-discretionary basis. More information is available at www.schwabassetmanagement.com.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity.

More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

Disclosures:

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 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. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares of ETF are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

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

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.

Tax-exempt bonds are not necessarily a suitable investment for all persons. Information related to a security’s tax-exempt status (federal and in-state) is obtained from third parties and Schwab does not guarantee its accuracy. Capital appreciation and income from bond funds and discounted bonds may be subject to state or local taxes. Capital gains are not exempt from federal income tax.

“ICE®” is a service/trademark of ICE Data Indices, LLC (“ICE”) or its affiliates. This trademark has been licensed, along with the ICE AMT-Free Core U.S. National Municipal Index (“Index”) for use by Charles Schwab Investment Management, Inc., dba Schwab Asset Management, in connection with the Schwab Municipal Bond ETF (the “Fund”). The Schwab Municipal Bond ETF is not sponsored, endorsed, sold or promoted by ICE Data Indices, LLC, its affiliates or its Third-Party Suppliers (“ICE Data and its Suppliers”). ICE Data and its Suppliers make no representations or warranties regarding the advisability of investing in the Fund. Past performance of an Index is not an indicator of or a guarantee of future results. The full ICE Data Indices disclaimer is located in the Schwab Municipal Bond ETF’s statutory prospectus and/or statement of additional information located here: www.schwabassetmanagement.com/schwabetfs_prospectus and such ICE Data disclaimer is expressly incorporated here by reference.

Schwab Asset Management™ is the dba name for Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for Schwab ETFs. Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). Schwab Asset Management is a separate but affiliated company and subsidiary of The Charles Schwab Corporation, and is not affiliated with SIDCO.

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¹ With a net expense ratio of 0.03%, SCMB has the lowest fees when compared to ETFs in both the Morningstar Muni National Intermediate category and the Lipper General + Insured Municipal Debt category. Morningstar and Lipper categories are not assigned until after inception date. Comparison based on Schwab Asset Management’s analysis of categories with ETFs that have similar characteristics to SCMB.

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