A number of popular brokerage platforms offer commission-free exchange traded fund trades. However, this is not an open invitation to day-trade your investment portfolio.
For instance, Fidelity Investments, TD Ameritrade, Charles Schwab, E*Trade, Vanguard and Merrill Lynch provide investors with access to commission-free trades on a number of ETFs. [Popular Commission-Free ETFs on Schwab OneSource]
“There are no specific advantages other than there is no cost to trade, so these are definitely more beneficial for smaller-sized accounts,” JJ Feldman, investment manager for Miracle Mile Advisors, said in a U.S. News article.
However, the ability to trade an ETF freely without any commission fees could entice investors to trade them more frequently.
“That potentially could be a bad thing, as market timing is virtually impossible,” Feldman added.
Investors should also look at a commission-free option as a bonus, rather than a deciding factor in choosing an ETF.
“Some ETFs are market-cap weighted, fundamentally weighted or dividend-weighted,” Feldman added. “The most important thing is to identify the ETFs that you like based on their strategy and risk-return profile.”