ETF Hearsay: Charles Schwab's first foray into active and ESG ETFs, with a sub-advisor!

Schwab Ariel ESG ETF

Ticker: SAEF (tentative)

Exchange: NYSE Arca

Expense ratio: TBD

Original filing date: April 5, 2021

Effective date: June 21, 2021

Listing Date: TBD

CUSIP: TBD

Active: Yes

Index / Benchmark: Not Applicable

Investment Objective:

The fund seeks long-term capital appreciation.

Investment Strategy:

Universe: predominantly constituents of Russell 2500

Select companies with potential for capital appreciation due to:

high barriers to entry

sustainable competitive advantage

predictable fundamentals that allow for the potential for double-digit earnings growth (at time of initial purchase)

skilled management teams

solid financials

ESG: Sub-advisor proprietary ESG-risk rating on each company based on:

Environmental such as:

Social such as:

Governance such as:

Furthermore, apply negative screening process to exclude companies whose primary source of revenue is derived from:

the production or sale of tobacco products
the exploration for or the extraction of fossil fuels, including coal, oil, and natural gas
the operation of private prisons or jails
the manufacture of firearms, personal weapons, small arms or controversial military weapons, such as weapons of mass destruction, nuclear weapons, land mines, and cluster munitions

ESG screens may not apply in certain market conditions where Charles Schwab manages the fund's assets instead of the sub-advisor.

Constituents:

Predominantly Russell 2500

Adviser: Charles Schwab Investment Management, Inc.

Sub-Adviser: Ariel Investments, LLC

Adminstrator: Charles Schwab Investment Management, Inc.,

Fund accountant: State Street Bank and Trust Company

Custodian: State Street Bank and Trust Company

Distributor: SEI Investments Distribution Co.

Legal counsel: TBD

External accounting: TBD

Prospectus is here.