US-based financial services provider Charles Schwab, today announced plans to introduce Schwab Stock Slices™, a new service that enables investors to own any of America’s leading companies from the S&P 500 for as little as $5 each, even if their shares cost more.
Using the new service, which will launch to clients on June 9, investors can purchase a single stock slice or up to 10 different Stock Slices™ at once, commission-free, just like regular online stock trades at Schwab, according to the firm.
“At Schwab we believe stock ownership should be accessible – this is the premise on which Chuck founded our company, and it remains true today,” said Jonathan Craig, Senior Executive Vice President and Head of Schwab Investor Services.
“But getting started as an investor can be overwhelming, and often those stocks that are most relevant and appealing are also the most expensive, and out of reach for many. With the introduction of Schwab Stock Slices we’re leveling the playing field – across all retail channels that clients can trade stocks, they can now buy slices of stock,” he added.
Advantages for investors
The firm reveals that Schwab Stock Slices will give investors the ability to sort and search companies by ticker, company name, and sector. They will also allow investors to create and purchase their own bundles of stocks based on their needs and interests.
Additionally, all Schwab clients have access to a range of educational resources and research, including stock screeners and Schwab Equity Ratings®, the firm’s proprietary method for rating stock performance, according to the company.
“Even with the recent volatility, we’re seeing high levels of engagement from many who see this as an opportunity to get into the market, and fractional shares trading through Schwab Stock Slices will provide an easy platform to do that,” says Neesha Hathi, Executive Vice President and Head of Schwab Digital Services.
How Schwab Stock Slices work
The firm explains that once someone selects the single stock or collection of stocks they want to purchase, the total dollar amount invested is split evenly across each stock, and slices of shares can round as narrowly as four decimal places. For example, a $50 investment across five stocks would appear as a $10 purchase of each stock, and the order would show the number of shares or fraction of shares that $10 would buy based on stock prices at the time of execution.
According to the company, Schwab Stock Slices will give investors the power to build a portfolio of stocks for a small fraction of what the total price would be otherwise. For example, for just $25, an investor could own pieces of Apple, Amazon, Facebook, Google, and Netflix when purchasing one full share of each would otherwise cost a total of approximately $4,500.
Schwab Stock Slices will be available in retail Schwab brokerage, custodial, and individual retirement accounts (IRAs).
Clients using the service will be able to trade shares in real-time throughout the trading day using market orders.
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