Schwab Plans Product as April Tax-Aware Long-Short Asset Estimate Tops $150 Billion

Charles Schwab plans to develop a proprietary long-short offering as an extension of direct indexing, CEO Rick Wurster said Thursday, Oct. 15, as an April estimate put tax-aware long-short assets above $150 billion.

“I do expect us to have an offering,” Wurster said during the company’s call. He said Schwab would share more details on future calls, but the company has not announced a launch date or disclosed the product’s structure, fees or minimum investment.

The offering would be a planned extension of Schwab’s direct-indexing business.

Schwab already runs a long-short program for registered investment advisers. Around mid-September, it raised minimums and slowed the program’s growth to ensure it could support clients operationally. Wurster said broader adviser asset gathering did not slow after that change.

Schwab’s margin loan balances stood at $187.9 billion on Sept. 30, up 14% from the prior quarter. Of that amount, $60.7 billion was related to long-short strategies used by registered investment advisers. That balance measures margin lending, not assets under management in tax-aware strategies, and the amount specifically tied to tax-aware investing is not specified.

A separate April 30, 2026, estimate put net assets across tax-aware long-short strategies above $150 billion, up from a few billion five years earlier. The estimate describes the strategy category as a whole; Schwab’s $60.7 billion figure covers margin balances tied to adviser strategies.

Tax-aware long-short strategies combine long and short positions, aiming to maintain investment exposure while creating more opportunities to realize losses in different market conditions. Those losses may offset taxable gains. Margin and short selling add costs, risks and complexity.

The Internal Revenue Service (IRS) requested comments Sept. 28 on certain investment-fund tax strategies that may produce capital gains alongside ordinary losses. Notice 2026-62 says a “tax-aware” or “tax-advantaged” label alone is not cause for concern. It also recognizes established loss-harvesting practices and contemplates possible future guidance. The notice does not name Schwab or its planned offering, and the company has not disclosed enough product detail to establish how the proposal relates to the strategies described. Written comments are due Oct. 28.