Schwab Asset Management is the first large
asset manager to use innovative new tool from Broadridge
Schwab Asset Management, the asset management arm of The Charles
Schwab Corporation, today announced that it is the first large
asset manager to pilot a new proxy polling solution from global
fintech firm, Broadridge Financial Solutions, Inc. (NYSE:BR). The
new solution allows Schwab Asset Management to poll fund
shareholders to understand their overarching preferences regarding
key proxy issues.
“Voting shares of securities held by our funds is a duty Schwab
Asset Management takes very seriously. We want to better understand
shareholders’ views on important proxy issues, and we know more
shareholders want to share their views with us and express their
unique preferences through their investments,” said Omar Aguilar,
Chief Executive Officer and Chief Investment Officer at Schwab
Asset Management. “We are proud to be a leader in piloting this new
tool for shareholder engagement.”
Broadridge's new solution aims to provide an efficient and
scalable way to gather general preferences across a large base of
shareholders. The pilot will engage the shareholders of one Schwab
Fund and two Schwab ETFs – the Schwab 1000 Index Fund (SNXFX), the
Schwab 1000 Index ETF (SCHK), and the Schwab Ariel ESG ETF (SAEF).
Via the new service, investors will complete a survey that will
provide insights into investors’ priorities on a range of core
proxy issues concerning maximizing long-term shareholder value,
company policies, corporate governance practices, and environmental
and social issues. Shareholders will not be surveyed on specific
proxy ballots.
“Schwab's use of the new polling technology, developed by
Broadridge, is another step forward in the democratization of
investing,” said Bob Schifellite, Broadridge's Investor
Communication Solutions President. “Broadridge continues to invest
in technology platforms designed to enhance shareholder engagement
and allow public companies and asset managers the opportunity to
better reflect the views of investors.”
Shareholders of the funds can expect to receive the poll via
email or postcard beginning tomorrow through the next few weeks,
with outreach to new shareholders of the funds occurring monthly.
The insights from the poll will be leveraged as a new source of
intelligence to help inform Schwab Asset Management’s proxy voting
approach and policies.
The Schwab Asset Management Investment Stewardship team,
comprised of experienced corporate governance professionals, is
dedicated to voting proxies on behalf of all shareholders’ best
long-term interests. Its proxy voting policies focus on maximizing
long-term shareholder value.
For more information on Schwab Asset Management’s investment
stewardship program, read the latest stewardship report here.
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 June 30, 2022, Schwab Asset Management managed
approximately $575.9 billion on a discretionary basis and $34.4
billion on a non-discretionary basis. More information is available
at www.schwabassetmanagement.com.
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, Facebook, YouTube and LinkedIn.
Disclosures:
The Schwab Ariel ESG ETF is different from traditional
ETFs.
Traditional ETFs tell the public what assets they hold each day.
This fund will not. This may create additional risks for
your investment. For example:
- You may have to pay more money to trade the fund’s shares. This
fund will provide less information to traders, who tend to charge
more for trades when they have less information.
- The price you pay to buy fund shares on an exchange may not
match the value of the fund’s portfolio. The same is true when you
sell shares. These price differences may be greater for this fund
compared to other ETFs because it provides less information to
traders.
- These additional risks may be even greater in bad or uncertain
market conditions.
- The ETF will publish on its website each day a “Proxy
Portfolio” designed to help trading in shares of the ETF. While the
Proxy Portfolio includes some of the ETF’s holdings, it is not the
ETF’s actual portfolio.
The differences between this fund and other ETFs may also have
advantages. By keeping certain information about the fund secret,
this fund may face less risk that other traders can predict or copy
its investment strategy. This may improve the fund’s performance.
If other traders are able to copy or predict the fund’s investment
strategy, however, this may hurt the fund’s performance.
For additional information regarding the unique attributes and
risks of the fund, see Proxy Portfolio Risk, Premium/Discount Risk,
Trading Halt Risk, Authorized Participant Concentration Risk,
Tracking Error Risk and Shares of the Fund May Trade at Prices
Other Than NAV in the Principal Risks and Proxy Portfolio and Proxy
Overlap sections of the prospectus and/or the Statement of
Additional Information.
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
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).
The Schwab Ariel ESG ETF is an active semi-transparent (also
known as a non-transparent ETF) and has additional risks associated
with it. These risks are discussed in the next four paragraphs.
Active Semi-Transparent (also known as Non-Transparent) ETF
Risk: Active semi-transparent ETFs operate differently from other
exchange-traded funds (ETFs). Unlike other ETFs, an active
semi-transparent ETF does not publicly disclose its entire
portfolio composition each business day, which may affect the price
at which shares of the ETF trade in the secondary market. Active
semi-transparent ETFs have limited public trading history. There
can be no assurance that an active trading market will develop, be
maintained or operate as intended. There is a risk that the market
price of an active semi-transparent ETF may vary significantly from
the ETF’s net asset value and that its shares may trade at a wider
bid/ask spread and, therefore, cost investors more to trade than
shares of other ETFs. These risks are heightened during periods of
market disruption or volatility.
Proxy Portfolio Risk: Unlike traditional ETFs, this fund does
not disclose its portfolio holdings (Actual Portfolio) daily. The
fund instead posts a Proxy Portfolio on its website each day. The
Proxy Portfolio is designed to reflect the economic exposures and
risk characteristics of the fund’s actual holdings on each trading
day, but it is not the same as the fund’s Actual Portfolio.
Although the Proxy Portfolio is intended to provide investors with
enough information to allow for an effective arbitrage mechanism
that will keep the market price of the Fund at or close to the
underlying NAV per Share of the Fund, there is a risk (which may
increase during periods of market disruption or volatility) that
market prices will vary significantly from the underlying NAV of
the fund. ETF trading on the basis of a published Proxy Portfolio
may trade at a wider bid/ask spread than ETFs that publish their
portfolios on a daily basis, especially during periods of market
disruption or volatility, and therefore may cost investors more to
trade. Also, while the Fund seeks to benefit from keeping its
portfolio information secret, market participants may attempt to
use the Proxy Portfolio to identify a Fund’s trading strategy,
which if successful, could result in such market participants
engaging in certain predatory trading practices that may have the
potential to harm the Fund and its shareholders.
Proxy Portfolio Construction – The Proxy Portfolio is designed
to recreate the daily performance of the Actual Portfolio. This is
achieved by performing a “Factor Model” analysis of the Actual
Portfolio. The Factor Model is comprised of three sets of factors
or analytical metrics: market-based factors, fundamental factors,
and industry/sector factors. The fund uses a “Model Universe” to
generate its Proxy Portfolio. The Model Universe is comprised of
securities that the fund can purchase and will be a financial index
or stated portfolio of securities from which fund investments will
be selected. The results of the Factor Model analysis are then
applied to the Model Universe. The Proxy Portfolio is then
generated as a result of this Model Universe analysis with the
Proxy Portfolio being a small sub-set of the Model Universe. The
Factor Model is applied to both the Actual Portfolio and the Model
Universe to construct the fund’s Proxy Portfolio that performs in a
manner substantially identical to the performance of its Actual
Portfolio.
The Proxy Portfolio will only include investments the fund is
permitted to hold. The fund’s SAI contains more information on the
Proxy Portfolio and its construction. Proxy Portfolio and Proxy
Overlap Information regarding the contents of the Proxy Portfolio,
and the percentage weight overlap between the holdings of the Proxy
Portfolio and a Fund’s Actual Portfolio holdings that formed the
basis for its calculation of NAV at the end of the prior Business
Day (the Portfolio Overlap), is available by visiting the fund’s
website www.schwabassetmanagement.com.
Schwab Asset ManagementTM is the dba name for Charles Schwab
Investment Management, Inc., the investment advisor for Schwab
Funds and Schwab ETFs. 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.
(1022-2KT5)
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Christine Hudacko Charles Schwab 415-961-3790
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