By Andrew Welsch

Charles Schwab's asset-management unit cut fees today on four equity index exchange-traded funds, a move that comes amid increasing investor demand for ETFs. It's a case of cheap funds getting even cheaper.

The operating expense ratios for Schwab U.S. Mid-Cap ETF and Schwab U.S. Small-Cap ETF are dropping to 0.03% from 0.04%. The operating expense ratio for Schwab International Small-Cap Equity ETF is falling to 0.06% from 0.08%. And Schwab Emerging Markets Equity ETF is also decreasing to 0.06%. It was previously 0.07%.

The company says that 16 of Schwab Asset Management's 24 market-cap weighted, index equity and fixed income ETFs are now offered at only three basis points (0.03%).

"Schwab is proud to leverage our growth and efficiencies to drive down costs for investors to better help them achieve their investment goals," said Nicohl Bogan, director of product strategy and development at Schwab Asset Management. "With today's fee reductions, building a diversified, index-based portfolio is more cost-effective than ever before with Schwab index ETFs."

Although the changes are small, the fee cuts will add up for investors who hold the funds long term. Schwab pointed to what it said were the cost-saving benefits for investors looking to build diversified portfolios; an investor with $10,000 would incur annual fund expenses of just $3 to $8 for a portfolio of stocks and bonds using the company's index ETFs.

ETFs are hot. Schwab's move comes amid increasing investor demand for ETFs. So far this year, investors have poured $830 billion into ETFs, putting asset flows on pace to exceed $1 trillion by the end of June, according to data from asset manager State Street. Index ETFs have been an investor favorite, but actively managed ETFs have also been attracting new assets: $320 billion so far in 2026.

Schwab has been regularly cutting fees on its ETFs. In June 2025, the company slashed costs for four ETFs: Schwab 1000 Index, Schwab International Equity, Schwab International Small-Cap, and Schwab Emerging Markets Equity. In February 2025, the company lowered costs for its Schwab International Dividend Equity ETF.

Schwab Asset Management managed approximately $1.6 trillion on a discretionary basis and $42.5 billion on a non-discretionary basis as of March 31.

Write to Andrew Welsch at andrew.welsch@barrons.com

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June 11, 2026 13:47 ET (17:47 GMT)

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