Fidelity and BlackRock have joined forces and together are offering retail customers commission-free trades on 25 iShares exchange traded fund(ETF) products.
Fidelity and BlackRock have teamed up, and the alliance could be a formidable one. The move is seen as a move against two huge competitors: Charles Schwab and Vanguard. Schwab recently launched its own proprietary line of ETFs, which it is selling commission-free on its platform. Schwab also lowered commissions on all other trades to $8.95. [BlackRock’s ETF Plans.]
Vanguard, meanwhile, has long offered ETFs but also competes with Fidelity for the industry top spot in terms of assets, explains Hannah Glover for Ignites.
This is one of Fidelity’s first major moves into the ETF market after years of sitting on the sidelines. It also solidifies BlackRock’s position as the world’s largest provider of ETFs. It now controls 50% of the $1 trillion ETF, says Morningstar. [ETFs vs. Mutual Funds? No Contest.]
Who’s the big winner in all these moves? That’s you, the ETF investor.
Fidelity’s retail business represents 12 million brokerage accounts. The partnership also bars BlackRock from making any similar deals with other distribution platforms and explains that Fidelity cannot offer other non-proprietary ETFs commission-free. [Fidelity Announces Free Trading.]
For more stories about ETFs, visit our ETF 101 category.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.