The exchange traded fund industry’s competitive landscape continues to grow as more fund sponsors enter the market and slash expense ratios to attract a larger customer base. However, expense ratios aren’t the only costs when it comes to investing in ETFs.
To attract trading volume, a few brokerage houses have promised to offer commission-free ETF trades.
Here is a sampling of some of the players offering commission-free ETFs, including Charles Schwab, Fidelity, TD Ameritrade, Vanguard, and more recently Scottrade.
Schwab
In the last quarter of 2010, Schwab launched its first ETFs and started advertising commission-free trades on its ETFs. The company started off with a selection of ETFs that cover Treasuries, TIPs, and domestic and international equities. The brokerage firm continues to build upon its ETF lineup and is working on ETF-based 401(k)s. [Schwab Sees Growth in ETF Business.]
Fidelity
Fidelity has an agreement with iShares to offer commission-free ETF trades on some of the most popular iShares funds, and the firm also offers free trades on its own ETF. [The ETF Price War Goes to Another Level.]
TD Ameritrade
Late to the party, TD Ameritrade tried to make a spectacular entrance by offering free trades on more than 100 ETFs. The brokerage uses the help of Morningstar’s research team to select the ETFs, which cover a range of ETF sponsors, including iShares, PowerShares, State Street, Vanguard, WisdomTree, iPath and Van Eck, among others. [The ETF Supermarket Has Arrived.]
Additionally, the firm was the first to offer free trades on funds that cover commodities, junk bonds and a number of iShares country-specific funds.
Vanguard
Famously known for its low-cast lineup, Vanguard offers free trades on all of its ETFs to its clients. The diverse selection of Vanguard fund products offers investors an opportunity to build a well-rounded portfolio. Trades on non-Vanguard ETF will still be charged a low commission fee.
Scottrade
In March, Scottrade launched ETFs through FocusShares, who will sponsor the Focus Morningstar ETFs. The brokerage offers commission-free trades to clients and advisors who custody their assets with Scottrade. The firm started off with 15 new ETFs. [Scottrade Tries To Undercut Its ETF Competitors.]
Max Chen contritubed to this article.