Schwab to Launch Ultra Shares
Schwab filed a "Form N-1A Registration Statement" for new "Ultra Share" classes of its Schwab Government Money Fund, Schwab Treasury Obligations Money Fund and Schwab U.S. Treasury Money Fund. The shares are expected to go live on Sept. 24, but don't have tickers or expense ratios posted yet. The filing explains, "The fund's goal is to seek the highest current income consistent with stability of capital and liquidity.... To pursue its goal, the fund invests in U.S. government securities, such as: U.S. Treasury bills and notes, other obligations that are issued by the U.S. government, its agencies or instrumentalities, including obligations that are not fully guaranteed by the U.S. Treasury, such as those issued by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks, repurchase agreements that are collateralized fully by cash and/or U.S. government securities [and] obligations that are issued by private issuers that are guaranteed as to principal or interest by the U.S. government, its agencies or instrumentalities." Schwab Treasury Obligations Money Fund's prospectus says, "The fund's goal is to seek current income consistent with stability of capital and liquidity. The fund's investment objective is not fundamental and therefore may be changed by the fund’s Board of Trustees without shareholder approval.... To pursue its goal, the fund typically invests in securities backed by the full faith and credit of the U.S. government and repurchase agreements backed by such investments." Schwab U.S. Treasury Money Fund's prospectus adds, "The fund's goal is to seek the highest current income that is consistent with stability of capital and liquidity.... To pursue its goal, the fund typically invests in securities backed by the full faith and credit of the U.S. government. The fund intends to operate as a government money market fund under the regulations governing money market funds. The fund will invest at least 99.5% of its total assets in cash and/or government securities (including bills and notes); under normal circumstances, at least 80% of the fund's net assets (including, for this purpose, any borrowings for investment purposes) will be invested solely in U.S. Treasury securities (excluding cash). With respect to the 80% policy, the fund will notify its shareholders at least 60 days before changing the policy. The full faith and credit backing is the strongest backing offered by the U.S. government, and traditionally is considered by investors to be the highest degree of safety as far as the payment of principal and interest." Currently, our MFI Daily tracks 14 Schwab money funds: Schwab AMT Tax-Free MF Inv ($1.1 billion in total assets), Schwab CA Municipal MF Inv ($4.6B), Schwab Government Money Fund Inv ($16.0B), Schwab Government Money Fund Swp ($17.4B), Schwab Govt Money Market Portfolio ($185M), Schwab Municipal MF Inv ($2.5B), Schwab Municipal MF Ultra ($11.6B), Schwab NY AMT T-F MM Inv ($873M), Schwab Retirement Govt MF ($2.5B), Schwab Treasury Oblig MF Inv ($10.9B), Schwab US Treasury MF Investor ($16.0B), Schwab Value Adv MF Inv ($67.6B), Schwab Value Adv MF Ultra ($44.8B) and Schwab Variable Share MF Ultra ($4.6B).
