Last week, Charles Schwab announced the upcoming launch of the Schwab Municipal Bond ETF (SCMB). The ETF, which is expected to begin trading on October 12, will trade on the NYSE Arca. SCMB will have an expense ratio of only 0.03%, which will be much lower than comparable funds. The ETF will provide access to the broad U.S. investment grade, tax-exempt bond market. The fund’s goal is to track 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. SCMB seeks to provide income exempt from federal taxes and is not subject to the federal alternative minimum tax. The ETF will have a high credit quality profile, investing only in investment-grade rated securities. John Sturiale, Head of Product Management and Innovation, Schwab Asset Management, stated, “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.”
Finsum: Charles Schwab is launching an ultra-low-cost Municipal bond ETF targeting investment-grade securities.