Schwab Asset Management^®, the asset management arm of The Charles Schwab Corporation, today announced the launch of the Schwab Mortgage-Backed Securities ETF (NYSE Arca: SMBS). The first day of trading is expected to be on or about November 19.

With an expense ratio of 0.03%, the Schwab Mortgage-Backed Securities ETF is priced in line with the lowest-priced peer ETFs based on the U.S. Mortgage Lipper category¹. The ETF will provide simple access to investment-grade mortgage-backed securities issued and/or guaranteed by U.S. government agencies. It is designed to serve as part of a diversified portfolio.

“It’s been a notable period for the fixed income market, and at Schwab Asset Management we’re deeply committed to helping clients with their fixed income investing needs. We’re excited to introduce the Schwab Mortgage-Backed Securities ETF as the latest example of that effort,” said Nicohl Bogan, Head of Passive Product Management & Innovation, Schwab Asset Management. “This launch is a prime example of how we are leveraging our scale and deep capital markets expertise to bring investors and advisors competitively priced offerings that provide core market exposures for well-diversified portfolios.”

The goal of the Schwab Mortgage-Backed Securities ETF is to track as closely as possible, before fees and expenses, the Bloomberg US MBS Float Adjusted Total Return Index. The ETF invests in mortgage-backed pass-through securities guaranteed by the Government National Mortgage Association (Ginnie Mae), the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) that are backed by pools of mortgages.

The launch of the Schwab Mortgage-Backed Securities ETF occurs when Schwab Asset Management is celebrating 15 years since entering the ETF space. Since that time, Schwab Asset Management has become the fifth-largest provider of ETFs² and is known for its commitment to low costs and taking a thoughtful approach to growing its lineup. To learn more visit www.schwabassetmanagement.com/about.

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 September 30, 2024, Schwab Asset Management managed approximately $1.3 trillion on a discretionary basis and $40.7 billion on a non-discretionary basis.

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/X, Facebook, 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 https://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. 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.

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 fund 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.

Schwab Asset Management^® is the dba name for Charles Schwab Investment Management, Inc., the investment adviser for Schwab Funds, Schwab ETFs, and separately managed account strategies. Schwab Funds are distributed by Charles Schwab & Co, Inc. (Schwab), Member SIPC. Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). Schwab Asset Management and Schwab are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation, and are not affiliated with SIDCO.

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1</sup> Source: Lipper, September 30, 2024.

² Source: ETF.com, ETF League Table, October 15, 2024.

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