Last Friday, Charles Schwab [profile] CEO Walt Bettinger announced the West Coast shop's move to cut ETF fees. One week later, the mutual fund media is still on the story.

IndexUniverse reporter Olly Ludwig has a lengthy piece going in depth on how the price cuts work and what they mean.

Among the highlights is a discussion of how the price cuts mean Schwab is likely taking a loss on ETFs despite what Bettinger said in a conference call last week.

One Vanguard spokesman told Ludwig his company would have concerns with that approach, asking "how long can a company play that game?"

But Ludwig notes that, though it may take time, it is not impossible for Schwab's strategy to work out, noting that IndexUniverse president of ETF Analytics Matt Hougan believes Schwab's ETF assets could climb from $7.5 billion to $30 billion in the next few years. Still, Ludwig believes it will be a "slow grind."

Though lengthy, the article provides a solid base of what this move by Schwab could mean. 

Edited by: Ben Geier


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE