Schwab: All-index fund 401(k) cut investing costs

Print
Email
|

Associated Press

Posted on February 21, 2013 at 2:02 PM

Updated Thursday, Feb 21 at 2:02 PM

Schwab Retirement Plan Services says that employees who enrolled in an all-index fund 401(k) plan launched by the company about a year ago saw the expenses on their funds drop nearly 80 percent.

The company said Thursday that fund expenses for investors in the plan, dubbed Schwab Index Advantage, fell 77 percent to $14.78 per $10,000 invested.

Prior to transitioning to an all-index fund approach, Schwab says the weighted-average operating expense ratio on these investors' 401(k) plans was $65.11 per $10,000 invested.

Schwab rolled out the plan to draw more investors, many increasingly wary of investing fees and looking to reduce costs.

Index funds do not carry the higher fees of actively managed funds. They seek to match the market by tracking an index, such as the S&P 500.

Print
Email
|