Charles Schwab YieldPlus Bond Funds

Two of discount stockbroker Charles Schwab’s mutual funds, that were marketed as conservative investments, are down significantly in 2008. The Schwab YieldPlus Investor Fund (SWYPX) is down approximately 17% year to date through March 26, 2008, and the Schwab California Tax-Free YieldPlus Fund (SWYCX) is down approximately 9% over the same period.

The funds were marketed with the objective to “seek high current income with minimal changes in share price.” Mark & Associates, P.C. believes that investors were misled about the potential risks of these funds, and is offering free legal consultations to investors who lost money in these funds.

Schwab YieldPlus Investor Fund

The Schwab YieldPlus Investor Fund is an ultra-short bond fund that has fallen due to large investments in mortgage bonds and subprime mortgage backed bonds. The fund declined approximately 3.6% in the second half of 2007, which caused nervous investors to begin fleeing the fund. Morningstar has reported that the fund’s assets have fallen from $13.5 billion in June 2007 to $2.5 billion as of March 20. This aggressive exodus from this fund has allegedly caused the fund managers to sell bonds for depressed prices.

The large loss in the YieldPlus Investor Fund has been shocking to investors. The fund invests in ultra-short term fixed-income securities that should, theoretically, have little risk. However, the funds lead manager invested in bonds that had more credit risk, like subprime bonds, than other similar funds. This explains why the Schwab YieldPlus Investor Fund ranks last in performance of all funds in its category.

Schwab California Tax-Free YieldPlus

The Schwab California Tax-Free YieldPlus Fund (SWYCX) is managed by the same lead manager and the Schwab YieldPlus Investor Fund, and is also significantly down in value. The fund’s investments in variable-rate bonds pegged to the London Interbank Offering Rate (LIBOR) have contributed to its poor performance as the LIBOR index has dropped as liquidity has dried up. Morningstar reports that in March 2008, the fund’s assets were less than $600 million, compared with the mid-2007 level of $1.1 billion.

Legal Rights for Investors in Schwab Funds

Mark & Associates, P.C. believes Charles Schwab misled investors by making misrepresentations in the marketing materials and prospectuses for these funds.  If you lost money investing these Schwab funds you may be entitled to compensation. Contact Mark & Associates, P.C. today for a free case consultation by submitting the form on the right side of this page or by calling 1-866-50-RIGHTS (1-866-507-4448).

Other News

  • Avandia to be removed from Pharmacies

    Avandia the widely prescribed type 2 diabetes drug has been linked to increased cardiovascular risks and the debate has carried on for nearly four years about whether or not the drug should be taken off the market, according to a recent WebMD news report. The FDA issued a safety alert about a possible association between Avandia and increased cardiovascular risks back in 2007. Starting November 2011, the type 2 diabetes drugs Avandia, Avandamet, and Avandaryl will no longer be available [...]

    Read more →

  • Metal Hip Manufactures Asked to Provide Patient Data

    Not too long ago, DePuy Orthopaedics, a division of Johnson & Johnson, recalled two popular hip replacements systems the ASR Hip Resurfacing System and the ASR XL Acetabular System. Depuy said the products were recalled because a high percentage of patients required revision surgery after experiencing pain. Depuy said that it sold 93,000 of these systems before they decided to stop selling them last year. Additionally, dozens of other patients who have had other hip replacements from other manufacturers, such [...]

    Read more →

  • Jury Orders Allergan to Pay $212 Million in Botox Case

    A Virginia man who claimed that injections of the wrinkle-diminishing Botox left him with brain damage has been awarded $212 million by manufacturer Allergan Inc. Douglas Ray Jr. said he was receiving the injections to relieve a hand tremor and writer’s cramp, a report in the Richmond-Times Dispatch said. Ray said that that Allergan failed to warn him that injections could trigger an autoimmune response leading to brain damage. Botox is a purified form of the poison botulinum and is [...]

    Read more →

  • Drug Manufacturers to Discontinue Infant Drops of Key Medicine

    According to a recently released Associated Press news report, Johnson & Johnson and other drug makers of cold and fever medications said that they will discontinue infant drops of medicines containing acetaminophen in an effort to avoid confusion that can lead to dangerous overdoses. The industry association for over-the-counter medicine companies said its members will begin phasing out the liquid drops later this year. After the transition is complete, companies will only sell a single formula for all children under [...]

    Read more →

  • Bisphosphonates Linked to Bone Fractures: Study

    Findings from a new Swedish study reveal that osteoporosis drugs known as bisphosphonates increase the risk of getting unusual thigh bone fractures, as experts have suspected, according to a recent WebMD news article. But these fractures are infrequent and the risk is small the study shows. When correctly prescribed, the overall benefit of the drugs preventing all types of fractures outweighs the risk of getting the unusual fractures, says study researcher Per Aspenberg, MD, PhD, a professor of orthopaedic surgery [...]

    Read more →

  • Babies Heart Defect linked to Crude Oil Chemical Exposure

    According to an April 30, 2001, AFP news report, babies exposed before birth to ethyl benzene, a toxic component in crude oil, may have a higher risk of developing congenital heart disease, US researchers announced. Another chemical used as an industrial metal degreasing agent, trichloroethylene (TCE), also boosted heart risks, said the research to be presented at the Pediatric Academic Societies annual meeting in Denver, Colorado. Congenital heart disease occurs when the heart is malformed before birth, and is the [...]

    Read more →

  • Toyota Announces New Floor Mat Interference Recall

    Once again, Toyota owners are being affected by a new recall due to floor mat interference. Presently, Toyota Motor Corp. is facing hundreds of lawsuits in the United States form vehicle owners or families who suffered personal injuries, wrongful deaths, or suffered financial losses, as a result of sticky gas pedals and floor mat interference, which may causes sudden unexpected acceleration. Since the end of 2009, Toyota has recalled nearly 4 million vehicles in the United States due to sticky [...]

    Read more →

  • Lawsuit over Seat Belts Can Proceed

    According to a recent Reuters news report, The U.S. Supreme Court ruled that federal regulations setting vehicle safety standards do not bar lawsuits seeking damages from automakers for installing lap-only seat belts. The unanimous ruling held that a California lawsuit against Mazda Motor Corp over a fatal 2002 collision involving a 1993 Mazda minivan can proceed. A passenger sitting in a rear seat and wearing a lap-only seat belt was killed. The lawsuit by the family of the passenger claimed [...]

    Read more →