Schwab launches the Schwab Ariel ESG ETF (2023)

New addition to ETF series marks many "firsts": Schwab's first ESG fund and first active ETF, as well as Ariel Investments' first non-advised ETF

WESTLAKE, Texas--(BUSINESS WIRE)--Schwab Asset Management, the asset management arm of Charles Schwab Corporation, today announced the launch of the Schwab Ariel ESG ETF (SAEF), an active, semi-transparent (also known as opaque) ETF that invests in small- and mid-cap stocks. , selected based on environmental, social and governance (ESG) factors. The new ETF is advised by Ariel Investments, LLC ("Ariel"). Ariel, the first African American investment firm in the US, brings nearly 40 years of experience integrating ESG factors into every phase of your investment process. The first trading day is expected to be around November 16, 2021.

"Schwab is focused on empowering customers and we know that investing in our securities is an increasingly important concern for many investors," said Rick Wurster, Chairman of Charles Schwab Corporation. “We are very pleased to introduce the Schwab Ariel ESG ETF in partnership with Ariel. Together, we believe our unmatched ETF and ESG capabilities can help investors achieve their financial goals."

The Schwab Ariel ESG ETF provides investors with access to Ariel's proprietary ESG investment process. The fund seeks long-term capital growth by leveraging Ariel's value investing process, which focuses on US small and midsize companies with favorable ESG characteristics, as measured by Ariel's ESG rating process.

The Schwab Ariel ESG ETF can serve as a core or supplemental ESG capital allocation within a portfolio. The fund has an operating expense ratio (OER) of 59 basis points.

"We are excited to extend our long-standing relationship with Schwab and bring our high-conviction, value-based ESG approach to market in this new ETF," said John W. Rogers, Jr., founder, chairman, co-CEO and director . of Investments, Ariel Inversiones. “ESG has influenced the way Ariel invests and participates since our founding in 1983. We believe in a more rigorous and thoughtful approach to ESG investing, using proprietary analytics to provide a granular view of ESG risk, rather than relying solely on third party scoring systems. As investors with a long-term focus, we are driven by dialogue, not dictation. As a company, we constantly work with the management teams of portfolio companies to address ESG issues that are considered important to their financial health.”

The Schwab Ariel ESG ETF offers active management in a semi-transparent ETF. Ariel's focus on value bonds and small- and mid-cap stocks sets the new ETF apart from most ESG strategies, which tend to focus on large-cap and growth bonds. Ariel will use its proprietary ESG research to derive a proprietary ESG risk rating for each holding or potential holding in the fund. In addition, Ariel will employ a negative screening process in selecting the fund's stocks, the purpose of which is to exclude from operations companies whose primary source of income comes from the production or sale of tobacco products, exploration or extraction of fossil fuels , which are private prisons or jails and the manufacture of controversial firearms, personal weapons, small arms or military weapons.

"At Schwab, we offer investment options, resources and education," said Malik Sievers, head of ESG strategy at Schwab Asset Management. “Our first proprietary ESG fund fills a clear gap in the market for small- and mid-cap ESG funds managed through a value investing lens. We are excited to offer investors a new option for integrating ESG into their portfolios that can help them tailor their ESG investment exposure based on their goals and preferences.”

Schwab Asset Management, the fifth largest provider of ETFs, has more than a decade of experience managing ETFs and a strong capital markets team that plays a critical role in keeping Schwab ETFs running efficiently. Along with this new proprietary offering, Schwab's holistic approach to ESG also includes training resources and extensive access to third-party ESG products. Ariel brings a distinctive bottom-up approach to actively managed investing with the goal of delivering long-term results for investors. His personalized approach recognizes ESG issues as important to business results and views management teams as collaborative partners in driving ESG performance. The Schwab Ariel ESG ETF will have two co-lead portfolio managers, John W. Rogers, Jr. and Kenneth Kuhrt, who will be supported by Ariel's dedicated ESG team.

Schwab and Ariel Investments have a longstanding relationship and have worked together for more than 20 years.Ariel-Schwab Investigation of Black Investors, a research series examining the similarities and differences between black and white Americans when it comes to saving, investing, and other financial priorities.

You can find more information in the brochure.Here.

Acerca de Schwab wealth management

Schwab Asset Management offers a focused range of competitively priced ETFs, mutual funds and separately managed account strategies designed to meet the basic needs of most investors. As part of the Charles Schwab organization, we are committed to meeting the needs of investors and strive to improve our clients' financial lives in everything we do. By conducting our business through the eyes of our clients and putting them at the center of our decisions, we aim to provide exceptional experiences for our investors and the financial professionals who serve them. Founded in 1989, Schwab Asset Management has more than $640.5 billion in assets under management and draws on the knowledge and experience of more than 119 investment professionals (as of 09/30/2021). For more information, seewww.schwabassetmanagement.com.

About Karl Schwab

At Charles Schwab, we believe in the power of investing to help people create a better future. We have a long history of challenging the status quo in our industry, innovating in ways that benefit the investors, advisors and employers who serve them, and serving our clients' goals with passion and integrity.

For more information, seewww.acercadeschwab.com. don't follow usGore,Facebook,YouTubemiLinkedIn.

About Ariel Investments

Ariel Investments, LLC is a global value-oriented investment management firm founded in 1983. Ariel is headquartered in Chicago with offices in New York City, San Francisco and Sydney. As of September 30, 2021, Ariel's total assets under management, including subsidiaries, were approximately $17.3 billion. Ariel serves retail and institutional investors through five unencumbered mutual funds and nine separate account strategies. For more information, visit Ariel's website atarielinvestments.com.

Disclosure:

This fund differs from traditional ETFs.

Traditional ETFs tell the public what assets they own every day. Not this background. That cancreate additional risksfor your investment. For example:

• You may have to pay more money to trade fund shares. This history will provide less information to merchants who tend to charge more for transactions when they have less information.
• The price you pay to buy shares in a fund on an exchange may not reflect the value of the fund's portfolio. The same is true when you sell stocks. These price differences can be larger for this fund compared to other ETFs because it offers less information to traders.
• These additional risks may be even greater in poor or uncertain market conditions.
• The ETF publishes a "proxy portfolio" on its website each day, designed to support trading in ETF shares. Although the proxy portfolio contains some ETF holdings, it is not the actual ETF portfolio.

The differences between this fund and other ETFs can also have advantages. By keeping certain fund information confidential, the fund may be less at risk that other traders may predict or copy your investment strategy. This can improve performance in the background. However, if other traders are able to copy or predict the Fund's investment strategy, this could negatively affect the Fund's performance.

To learn more about the fund's unique characteristics and risks, visitProxy portfolio risk, premium/discount risk, business interruption risk, authorized participant concentration risk, tracking error riskmiShares in the Fund may trade at prices other than NAVNOmain risksmiProxy-Portfolio y Proxy-Overlaysections of the sales brochure and/or additional information sheet.

Investors should carefully review the information contained in the Prospectus or, where available, the Prospectus Summary, including investment objectives, risks, charges and expenses. You can obtain a brochure or, where available, a summary of the brochure by visiting the websiteschwabassetmanagement.com/schwabetfs_prospectus. Please read it carefully before investing.

Investment returns will fluctuate and are subject to market volatility, so an investor's shares, when traded or sold, may be worth more or less than their original cost. Unlike mutual funds, ETF shares cannot be individually redeemed directly from the ETF. ETF shares are bought and sold at market price, which may be higher or lower than Net Asset Value (NAV).

Semi-Transparent (also known as Opaque) Active ETF Risk:Active semi-transparent ETFs work differently than other exchange-traded funds (ETFs). Unlike other ETFs, an active semi-transparent ETF does not publicly disclose the full composition of its portfolio each business day, which can affect the price at which the ETF's shares trade on the secondary market. Active semi-transparent ETFs have limited trading history. There is no guarantee that an active trading market will develop, be maintained or function as intended. There is a risk that the market price of an active semi-transparent ETF could fluctuate significantly from the ETF's net asset value and that its shares trade with a wider bid-ask spread and therefore would be more costly for investors. Investors trade that shares. in other ETFs. These risks increase during periods of market instability or volatility.

Proxy-Wallet-Risiko:Unlike conventional ETFs, this fund does not disclose the stock portfolio (actual portfolio) on a daily basis. Instead, the fund publishes a proxy portfolio on its website every day. The representative portfolio is intended to reflect the economic risks and risk characteristics of the Fund's actual positions on each trading day, but is not identical to the Fund's actual portfolio. While the Proxy Portfolio is intended to provide investors with sufficient information to enable an effective arbitrage mechanism to maintain the Fund's market price at or near the Fund's underlying NAV per Share, there is a risk (which may increase during periods of market volatility) that market prices will fluctuate significantly in relation to the Fund's underlying NAV. Trading ETFs based on a published proxy portfolio may trade with a wider bid-ask spread than ETFs that publish their portfolios daily, particularly during periods of market instability or volatility, and therefore may cost more to trade for investors. In addition, while the Fund seeks to benefit from the secrecy of its portfolio information, market participants may attempt to use the proxy portfolio to identify a Fund's business strategy which, if successful, may result in such market participants engage in certain predatory business practices. that could harm the Fund and its shareholders.

Creating a proxy wallet– The proxy portfolio is designed to replicate the daily performance of the Real portfolio. This is accomplished by performing a "factor model" analysis of the actual portfolio. The factor model consists of three sets of factors or analytical metrics: market-based factors, fundamental factors, and industry/sector factors. The fund uses a "model universe" to create its proxy portfolio. The model universe consists of securities that the Fund may purchase and is a financial index or a specific portfolio of securities from which the Fund's investments are selected. The results of the factor model analysis are then applied to the model universe. The representation portfolio is then generated as a result of this analysis of the model universe, and the representation portfolio represents a small subset of the model universe. The factor model is applied to both the actual portfolio and the model universe to create the fund's proxy portfolio, which performs essentially identical to your actual portfolio.

The proxy portfolio only contains investments that the Fund is authorized to hold. The Fund's SAI has more information on the proxy portfolio and its construction. Proxy Portfolio and Proxy Overlay Information about the contents of the proxy portfolio and the percentage weight overlap between the proxy portfolio positions and the actual portfolio positions of a fund, which formed the basis for the value calculation settlement at the end of the previous business day (Portfolio Overlay) is available on the fund websitewww.schwabassetmanagement.com

Because ESG (environmental, social and governance) strategies exclude some values, products with an ESG focus may not capitalize on the same opportunities or market trends as products that do not use ESG strategies. In addition, the criteria used to select companies for investment may cause investments in a security, industry or sector to underperform the market as a whole.

Value investing attempts to identify undervalued companies with characteristics to enhance valuations. Securities that exhibit value characteristics tend to perform differently and change among investors as market and economic conditions change. As a result, the fund's performance can sometimes underperform other funds that are more broadly based or invest in securities with different characteristics.

Small-cap funds are subject to greater volatility than funds in other asset classes.

Mid-cap companies may be more susceptible to adverse business or economic events than larger, more established companies, and the value of securities issued by these companies may change significantly.

Schwab Asset Management is the investment adviser and Ariel Investments, LLC is the sub-adviser.

Schwab Asset Management is the dba name of Charles Schwab Investment Management, Inc. (CSIM). Schwab Asset Management is part of the Schwab Asset Management Solutions (SAMS) organization, a collection of business units within Charles Schwab Corporation aligned through a common function: asset management-related services, under common leadership. CSIM and Charles Schwab & Co., Inc. (Schwab), a member of SIPC, are separate but related companies and subsidiaries of Charles Schwab Corporation.

Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). Ariel Investments, LLC and SIDCO are not affiliated with The Charles Schwab Corporation or any of its subsidiaries.

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Fuente: Die Charles Schwab Corporation