The Schwab 1000 Index Fund is celebrating 15 years without taxable capital gains distributions. It is the only fund of its age to be included in Morningstar's large-cap index category with such a record.
"Schwab's heritage in the asset management business began with the Schwab 1000," said Schwab Chairman and CEO Charles R. Schwab. "In this one fund, investors can own 1,000 of America's greatest companies, gaining exposure to nearly 90% of the value of the U.S. market diversified over 70 different industries. I am particularly proud that we've been able to provide clients with this tremendous diversification, solid performance and significant tax savings, which translate into greater returns for investors."
As per research conducted by Charles Schwab Investment Management, over the past 10 years, about 15% of the average return for actively managed large-cap funds was lost to taxes. In the Schwab 1000, only 5% of the fund's total return to taxes was lost. The money that could have been lost to taxes each year compounded in the fund, providing even greater returns over time.
"Uncle Sam provided many investors with a reminder this year that performance must be balanced with tax efficiency, said Larry Mano, portfolio manager of the Schwab 1000 Index Fund. "Through the use of innovative technology and a disciplined management style, we've been able to keep our promise of making tax efficiency a key objective of the fund. We're thrilled our strategy has paid off and has provided investors with a tax efficiency that is virtually unheard of in the current marketplace."