On Thursday, June 11, Schwab Asset Management announced that it cut down the expense ratios on four of its existing indexed ETFs. Each of these funds is a longstanding strategy in Schwab’s collection, with a significant asset base and compelling track record. As such, these new lower fees amplify the contest between Schwab and its top competitors.
Key Takeaways:
- Schwab Asset Management has lowered the net expense ratios for four of its longstanding passively managed ETFs.
- These lower fees can help Schwab better compete with other firms on the market that are offering alternative products.
- That being said, fees are not everything, and the differences in portfolio composition could be more important than saving a few basis points from a lower expense ratio.
“Schwab is proud to leverage our growth and efficiencies to drive down costs for investors to better help them achieve their investment goals,” Nicohl Bogan, director of product strategy and development, Schwab Asset Management said. “With today’s fee reductions, building a diversified, index-based portfolio is more cost-effective than ever before with Schwab index ETFs.”
First up is the Schwab U.S. Mid-Cap ETF (SCHM ). Formerly operating with an expense ratio of four basis points, SCHM now only charges three.
Those looking to move further down the cap spectrum might be interested in the Schwab U.S. Small-Cap ETF (SCHA ). Much like SCHM, this small-cap fund has seen its expense ratio drop from four basis points to three.
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Meanwhile, the Schwab International Small-Cap Equity ETF (SCHC ) takes a global approach to small-cap exposure. SCHC’s expense ratio has lowered from eight basis points to six.
Last but certainly not least is the Schwab Emerging Markets Equity ETF (SCHE ). While it used to have an expense ratio of seven basis points, SCHE is now operating with six.
Stepping Up the Competition
These newly discounted funds are positioned to better help Schwab compete with other compelling funds in the field. For instance, SCHE’s lower expense ratio puts the fund three basis points below the iShares Core MSCI Emerging Markets ETF (IEMG ).
However, fees are not everything. For instance, there are crucial differences within the holdings between IEMG and SCHE, such as SCHE’s significant tilt towards South Korean equities. This is why it’s important for advisors and investors to look at a fund’s specific approach, and not just fixate on the price.
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The same is true for SCHM, the newly-discounted Schwab midcap ETF. The discount now puts the fund at the same price as the Vanguard Mid-Cap ETF (VO ). However, these funds hold different sector concentrations.
As of April 30, 2026, VO leans heavily into the industrials, consumer discretionary, and financials sectors. Meanwhile, as of March 31, 2026, SCHM focuses on industrials, informational technology, and financials as its top three sectors. Again, this is why research and due diligence is always more important than choosing the cheapest fund — though a discount is undeniably attractive.
A proven provider of exchange-traded funds, Schwab has 34 ETFs listed in the United States. These funds represent more than $570 billion in assets under management.
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