The Mutual Fund OneSource Select List, comprises around 170 funds and is used by Charles Schwab’s direct investors as well as advisors, who also have access to a further five mutual fund lists and a separately managed account list.
The list is updated every quarter. The changes below are from the first quarter of the year to the second.
Changes to the list are largley based on quantitative analysis, using Schwab's internal manager ratings.
A fund being removed from the list does not mean Schwab's investment advisory team deem it to be 'a sell', rather that it is no longer one of their top picks for new investment.
To find out more about how funds are picked for the list, read our profile with gatekeeper Michael Iachini.
Charles Schwab has cut two Brandes funds from its Mutual Fund OneSource Select list, as the firm warned of a choppy time ahead for emerging markets in the short term.
The $1.2 billion Brandes Emerging Markets Value fund has been cut from its list, while the $1.5 billion Brandes International Small Cap Equity fund, which has a slant towards developing economies has also been removed.
Added to the list are the $295 million RBC Emerging Markets Equity fund and the $5.1 billion MFS International New Discovery fund, which has a stronger slant towards developed international markets than the small cap fund it has replaced.
'The overall developed international stock market may lag the US stock market again in 2017 due to political risk, fading economic surprises, slower relative growth, currency drag, and sector leadership,' said Schwab in its second quarter update.
'Emerging markets remain attractive over the longer-term but returns could be volatile in 2017 and we suggest investors maintain weights at long-term strategic targets.'
The firm has meanwhile added another European-focused fund to its list of recommended international stock funds, as the region enjoys a buoyant performance in 2017. JPMorgan Intrepid European has joined Franklin Mutual European as Schwab's recommended pure European plays.
In its recommended sector funds list, Schwab has removed utility funds, warning of headwinds from a rising interest rate environment. The $587 million American Century Utilities and $51 million Icon Utilities funds have both been cut.
Within its large-cap US stocks list, a notable boutique addition is the Nicholas fund, launched in 1969 and run by Milwaukee-based Nicholas Company.
Here are all the ins and outs from Charles Schwab's reshuffle:
|OneSource second quarter reshuffle|
|LARGE-CAP U.S. STOCK FUNDS|
|Schwab Core Equity||Glenmede Large Cap Core|
|MFS Massachusetts Investors||Jensen Quality Growth|
|Nicholas||BMO Low Volatility Equity|
|Pioneer Equity Income||Columbia Dividend Opportunity|
|Federated Strategic Value Dividend|
|MID- AND SMALL-CAP U.S. STOCK FUNDS|
|Prudential QMA Mid-Cap Value||Pax Small Cap Individual Investor|
|BlackRock Advantage Small Cap Core||Meridian Growth|
|Wasatch Core Growth||Boston Trust Small Cap|
|Wasatch Micro Cap Value|
|Delaware Small Cap Value|
|INTERNATIONAL STOCK FUNDS|
|RBC Emerging Markets Equity||Brandes Emerging Markets Value|
|JPMorgan Intrepid European||Matthews Asia Growth Investor|
|Wells Fargo International Equity||FMI International|
|MFS International New Discovery||Brandes International Small Cap Equity|
|BP Capital TwinLine Energy||Ivy Energy|
|Center Coast MLP Focus||Tortoise Select Opportunity Investor|
|Diamond Hill Financial Long-Short||American Century Utilities|
|ICON Natural Resources||ICON Utilities|
|Oppenheimer Gold & Special Minerals|
|Schwab U.S. Aggregate Bond Index|
|TAXABLE BOND FUNDS|
|Schwab U.S. Aggregate Bond Index||Schwab Total Bond Market Fund|
|USAA Intermediate-Term Bond||Schwab GNMA Fund|
|Prudential High-Yield||Lord Abbett Income|
|Pioneer Dynamic Credit||RidgeWorth Seix High Yield|
|Sit US Government Securities|
|ADDITIONAL FUND CATEGORIES|
|American Century One Choice 2045|
|American Century One Choice 2050|
|American Century One Choice 2055|
|American Funds Investment Company of America||Schwab GNMA Fund|
|Pioneer Equity Income||Schwab Intermediate-Term Bond Fund|
|JPMorgan International Research Enhanced Equity||Parnassus Core Equity Investor|
|Prudential High-Yield||Commerce Value|
|Lord Abbett Inflation Focused||RidgeWorth Seix High Yield|
|Columbia US Government Mortgage||American Century Infl-Adj Bond|
|AB Global Bond||American Century Ginnie Mae|
|Sit US Government Securities|
|Pimco Foreign Bond (USD-Hedged)|