Nevertheless, commission-free trades should not be the sole indicator for trading an ETF. Mitchell Reiner of Capital Investment Advisors recommends that investors should consider other factors like overall costs, exposure offered and how well the ETFs track their benchmarks.
Moreover, looking at overall costs, investors should also monitor expense ratios, along with wide spreads between bid and ask prices.
Traders should also be aware that Fidelity, E*Trade and Ameritrade charge a short-term trading fee on commission-free ETFs. Vanguard cna restrict purchases if a trader buys and sells the same commission-free ETF over 25 times within a 12-month period.
For more information on the ETF industry, visit our current affairs category.
Max Chen contributed to this article.