After years of trying, Charles Schwab & Co. has finally brought international mutual fund giant Scudder, Stevens & Clark Inc. into Schwab's no-fee fund supermarket.
Boston-based Scudder, with more than $30 billion in fund assets, is the largest fund family yet to sign up with Schwab, a spokesman said.
"They're a big name that will look nice alongside some of the others," said John P. McGonigle, senior vice president in charge of Schwab's mutual fund marketplace.
Scudder's decision boosts Schwab's OneSource program to 584 funds from 71 companies, all sold without loads, or transactions fees.
"Scudder will round out some of the international categories where OneSource was frankly a little light," Mr. McGonigle said.
OneSource now has $33.5 billion in fund assets.
Mr. McGonigle said he first approached Scudder in 1992, when the brokerage firm launched OneSource. But Scudder waited until the fund supermarket proved itself before signing on.
Growing acceptance of the mutual fund supermarket concept among investors tipped the balance in Schwab's favor, a Scudder executive said. "Our decision to participate is a reflection of the demand among shareholders," said Howard Schneider, a managing director at Scudder.
Naturally, Scudder, which charges no distribution fees for its funds, will pay for the privilege of participating in OneSource. The company declined to reveal the terms of the deal. Schwab charges fund companies an annual 0.30% to 0.35% of customer assets held in the program, Mr. Greenwald said.
"Scudder recognizes you have to pay up for distribution, and they see what the distribution channel has done for others," said Burton J. Greenwald, a Philadelphia-based mutual fund consulting.
Scudder has lost market share in recent years and doesn't have the brand name recognition or marketing firepower of the largest no-load companies such as the Vanguard Group, Mr. Greenwald said.
"Scudder needs Schwab more than Schwab needs Scudder," he said.
But Scudder may be only the first of the big no-load fund firms to sell without a fee through Schwab.
T. Rowe Price is said to be negotiating with Schwab to add its funds to OneSource by yearend, a knowledgeable industry observer said.