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Charles Schwab Launches New Mutual Fund Inspired by Award-Winning
Schwab Equity Ratings' Model Portfolio
New Fund Utilizes Same Stock-Rating Expertise Behind Schwab's #1 Ranked Model
Equity Portfolio
SAN FRANCISCO, Feb. 23 /PRNewswire-FirstCall/ -- Charles Schwab Investment
Management, Inc. today announced the launch of the Schwab Premier Equity
Fund(TM), a new addition to the Schwab Funds(R) suite of actively-managed
equity funds. This new Fund provides investors the opportunity to invest in a
mutual fund that uses the same stock screening expertise that helped Schwab's
model equity portfolio achieve a #1 ranking in Barron's 2004 annual stock
selection competition.
The Fund utilizes Schwab Equity Ratings(R), a proprietary stock screening
methodology behind Schwab's model equity portfolio, which this year took first
place for best three-year performance for the second consecutive year.
The existing line-up of funds that use Schwab Equity Ratings has already
captured broad-scale investor attention with performance numbers that have more
than held their own against the competition. Visit Schwab.com for Schwab Funds
performance information.
The Schwab Premier Equity Fund is unique because it seeks to deliver capital
appreciation by selecting only stocks rated A or B by Schwab Equity Ratings.
With its multi-cap strategy, the Fund is free to invest in stocks of any size
and can shift between growth and value in order to seek strong returns through
different market conditions.
"Last year's #1 rating from Barron's generated investor interest in a fund that
would use Schwab Equity Ratings to capture strongly-rated stocks in one
investment," said Evelyn Dilsaver, president and CEO of Charles Schwab
Investment Management, Inc. "This year's win reinforces our decision to offer
the Premier Equity Fund."
The Fund is currently in subscription through March 18, 2005, commencing
operations on March 21, 2005*. During the subscription period, Schwab clients
can invest in the fund at an offering price of $10 per share with all fund
expenses waived through June 30, 2005.
The Fund is offered in two share classes. Investor Shares require an initial
investment of $2,500. Select Shares, which offer a lower operating expense
ratio (OER) in return for a higher investment minimum, have an initial
investment of $50,000. Effective July 1, 2005, the fund's operating expense
ratios (1.30 percent for Investor Shares and 1.15 percent for Select Shares)
will apply. They are guaranteed through February 27, 2006, excluding interest,
taxes and certain non-routine expenses.
Portfolio Management
The new actively-managed fund will be co-managed by Jeffrey Mortimer, CFA,
senior vice president and senior portfolio manager; Vivienne Hsu, CFA, vice
president and senior portfolio manager; and Larry Mano, director and portfolio
manager. The team oversees the eight SchwabFunds that tap into Schwab Equity
Ratings. These include the Schwab Core Equity Fund, Schwab Dividend Equity
Fund, Schwab Hedged Equity Fund, Schwab Small-Cap Equity Fund, Schwab Financial
Services Fund, Schwab Health Care Fund, Schwab Technology Fund and the new
Schwab Premier Equity Fund.
See end of press release for regulation analyst certification and how to obtain
important required disclosures.
About Charles Schwab Investment Management
Founded in 1991, Charles Schwab Investment Management, Inc. (CSIM) is an
affiliate of Charles Schwab & Co. Inc. and an adviser to Schwab Funds. As of
December 31, 2004, CSIM ranked as the nation's 12th-largest mutual fund group,
based on assets under management, currently totaling $136 billion. It is the
country's fourth-largest money market fund manager and third-largest provider
of retail index funds. With the addition of the new fund, CSIM currently
manages 51 including 22 actively managed equity funds, taxable and tax-free
bond funds, and taxable and tax-free money market funds.
About Schwab Equity Ratings
Schwab Equity Ratings offer an objective and disciplined assessment of
approximately 3,000 U.S. equities, more than any other major brokerage firm.
Stocks are assigned grades of A, B, C, D, or F, reflecting performance
potential over the next 12 months. Schwab's outlook is that "A"-rated stocks,
on average, will strongly outperform, and "F"-rated stocks, on average, will
strongly underperform the equities market over the next 12 months. The ratings
assess four broad categories: fundamentals, valuation, momentum, and risk. They
are updated each week to reflect new financial data and other information. For
more information on Schwab Equity Ratings, including performance details, how
performance was calculated, comparison of performance to benchmarks and
limitations of model performance, visit http://www.schwab.com/serperformance.
About Charles Schwab
The Charles Schwab Corporation (NYSE:SCH) Nasdaq, through its operating
subsidiaries, provides securities brokerage and financial services to
individual investors and the independent investment advisors who work with
them. With over 7 million individual investor accounts and more than $1
trillion in client assets, The Charles Schwab Corporation is one of the
nation's largest financial services firms. Its subsidiary Charles Schwab & Co.,
Inc. (member SIPC) provides a complete range of investment services and
products, including an extensive selection of mutual funds; financial planning
and investment advice; retirement plans; referrals to independent fee-based
investment advisors; and custodial, operational and trading support for
independent fee-based investment advisors. Its subsidiary Charles Schwab Bank,
N.A. (member FDIC) provides banking and mortgage services and products. The
Corporation's other operating subsidiaries include U.S. Trust Corporation
(member FDIC) and CyberTrader(R), Inc. (member SIPC). These companies' Web
sites can be reached at http://www.schwab.com/, http://www.schwabbank.com/,
http://www.ustrust.com/, and http://www.cybertrader.com/.
Past performance is no guarantee of future results.
Investors should consider carefully information contained in the prospectus,
including investment objectives, risks, charges and expenses. You can request a
prospectus by calling Schwab at 1-800-435-4000. Please read the prospectus
carefully before investing. Investment value will fluctuate and shares, when
redeemed, may be worth more or less than original cost.
The fund could have a high portfolio turnover rate, which may result in
increased transaction costs and capital gain distributions. The fund's focus on
a limited number of securities may result in increased volatility.
The performance of Schwab Equity Ratings or the model equity portfolio is not
an indication of future performance of the Schwab Premier Equity Fund.
Performance of the model portfolios submitted to the Barron's competition was
calculated using an equal-weighted return methodology that is administered by
Zack's. It is not actual performance and does not reflect actual trading. Each
brokerage firm had its own methodologies in picking its stock lists, which
differed in many respects, including the numbers of issues held, frequency of
trading and changes of selection criteria over time. Barron's is a registered
trademark of Dow Jones & Company, Inc. All rights reserved.
* Subscription orders must be received in good form by 4 p.m. Eastern Time on
March 18, 2005. Orders received after that time will be invested at the next
determined net asset value (NAV) after receipt and acceptance of the order by
Schwab. Sufficient assets must be in your account by 9 a.m. Eastern time on
March 17, 2005. If you do not have sufficient assets to meet the minimum
initial investment requirement by this time, your order will be canceled. You
may reinstate your order by bringing a check to your local Schwab branch by 4
p.m. Eastern Time on March 18, 2005. Share price will fluctuate once operations
commence on March 21, 2005. (0205-7175)
DATASOURCE: Charles Schwab
CONTACT: Sondra Harris of Charles Schwab, +1-415-636-3292, or
Web site: http://www.schwab.com/