Schwab Yield Plus Select losses may be recoverable

Austin Kirk

By Austin Kirk
Posted April 10, 2008


The Schwab YieldPlus Select Fund (SWYSX), which is one of the largest bond funds for Charles Schwab Corp., has lost 80% of its assets over the past year. Many investors placed their money in this fund as an alternative to a money market, and they have suffered substantial losses as a result of the funds inappropriate concentration on mortgage-backed securites. Some of these investment losses may be recoverable through a Schwab YieldPlus Select lawsuit.

In May 2007, the Schwab Yield Plus Select Fund had assets of $13 billion, and as of March 20, 2008, the assets had declined to only $2.5 billion. Through the end of March, 2008, the net asset value per share has dropped more than 18% year to date, and Morning star now ranks the fund last among ultra-short-term bond funds. As a result of unreasonable investment approaches by fund managers, who placed more than half of the assets in mortgage-backed securities, the Schwab YieldPlus Select fund lost considerably more than other competitive funds, which have lost on average only about 1.3%.

Investors have been pulling their money out of the Yield Plus Select fund, as they are now realizing that Schwab made misleading and untrue statements about the nature of the bond fund investment.

Many investors were led to believe that they were purchasing a relatively low risk alternative to a money market account, which are considered the safest possible investments besides bank accounts and government debt. Schwab literature was provided to investors which indicated:

“The [YieldPlus] funds provide higher yields on your cash with only marginally higher risk [and therefore] could be a smart alternative.”


The Schwab Yield Plus lawyers at Saiontz & Kirk, P.A. are reviewing potential Schwab Yield Plus Select lawsuits as a result of omissions and misleading statements made by the brokerage, which prevented investors from fully understanding the nature of what they were investing in. For individuals who lost over $10,000.00 off of their initial investment, they may be entitled to recover a portion of their losses through a securities fraud arbitration lawsuit. To determine if you, a friend or family member may be entitled to compensation, request a free consultation and claim evaluation.

6 Comments • Add Your Comments

  • jeanne says:

    I am a retiree who was told to invest my entire life’s savings into Yield Plus. Regina Quigley, the VP Fiancial Consultant at Charles Schwab in San Mateo, CA, was told by me that this money, $214,000, was all of my retirement money representing over 40 years of working, and that it had to be kept safe. She told me Yield Plus was as as good and safe as cash and there was no risk. She put all $214,000 into Yield Plus. I loss $68,000 in just 9 months, that’s 31% of my retirement savings. She never once suggested I diversify or move out of Yield Plus but instead kept assuring me this was where my money should be and that it was fine there.

    Posted on April 26, 2008 at 7:08 pm

  • E. Moran says:

    In Reno, Gary Cronk, the CS, advisor, told me he put his daughters college education fund inside this fund, it was so safe. When I noticed the huge loss, called the Reno office, he said he had a list of clients to call, I asked why I was not on the list, he did not know why. Lost over 45,000 thanks to him, CS and these lies. Would have lost much more had I not sold out immediately vs taking his advice that I should hold on and wait it out……… notice the fund is below $5. Has anyone noticed that not one front page article has appeared in either the WSJ. IBD or Barrons, as well as the group from MSNBC fast money. Never let a day go by, to share your story with anyone, regarding the morals of CS and their employees, CS thinks the public has short term memory loss, if you share the story you stop folks from investing with them or doing any kind of business with them. They are dishonest and so continue to be, sending out threats to stop complaining via letters, saying the matters were taken care of, which begs the obvious law suits.. None of these folks, starting with straight talk from Chuck, have ever apologized, quite the contrary, the law suits are testimony to their contempt for the small investor. Their tact was to treat investors, as if we were the criminals, not them. No one should do any business with them. They are not only not trustworthy, they take pride to make all the small investors feel like chumps after the fact. Their ads are hypocritical at best.

    Posted on October 19, 2010 at 2:20 pm

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