Online broker Firstrade has become the latest firm to roll out a commission-free trading platform in an effort to lure ETF investors. The firm announced this week that ten ETFs would be available commission-free on its platform, including funds covering a number of asset classes and strategies. The commission-free ETFs include six Vanguard ETFs, three iShares products, and a PowerShares commodity fund:
|Ticker||Name||ETFdb Category||Other Commission Free Platforms|
|BLV||Vanguard Long Term Bond ETF||Total Bond Market||Vanguard, TD Ameritrade|
|BIV||Vanguard Intermediate Term Bond ETF||Total Bond Market||Vanguard, TD Ameritrade|
|BSV||Vanguard Short Term Bond ETF||Total Bond Market||Vanguard, TD Ameritrade|
|VBK||Vanguard Small Cap Growth||Small Cap Growth Equities||Vanguard, TD Ameritrade|
|IJH||iShares S&P MidCap 400 Index Fund||Mid Cap Blend Equities||Fidelity, TD Ameritrade|
|VIG||Vanguard Dividend Appreciation ETF||Large Cap Value Equities||Vanguard, TD Ameritrade|
|VWO||Vanguard Emerging Markets ETF||Emerging Markets Equities||Vanguard, TD Ameritrade|
|IVV||iShares S&P 500 Index Fund||Large Cap Blend Equities||Fidelity, TD Ameritrade|
|DBC||PowerShares DB Commodity Index Tracking Fund||Commodities||TD Ameritrade|
|FXI||iShares FTSE/Xinhua China 25 Index Fund||China Equities||TD Ameritrade|
Each of the ten commission free ETFs available on the Firstrade platform are already available commission free through at least one other brokerage. All Vanguard ETFs can be traded commission free through Vanguard accounts, and iShares has a partnership with Fidelity that includes commission free trading on 30 of the most popular iShares funds. TD Ameritrade offers more than 100 ETFs commission free, including options from several different issuers. Each of the ETFs available on Firstrade is already included in TD’s commission free platform [see Commission Free ETFs: Breaking Down All The Options].
In an effort to lure cost-conscious ETF investors, several firms have begun offering commission free trades. Last month, FocusShares returned to the ETF industry as a unit of Scottrade, with all 15 FocusShares ETFs available commission-free to Scottrade customers. That move came after Charles Schwab, Vanguard, Fidelity, and TD Ameritrade had introduced similar initiatives. While ETF investors tend to focus on expense ratios as the primary measure of cost, commissions can make a material contribution to total portfolio management fees, especially for active traders with relatively small accounts [see Analyzing The Total Cost Of ETF Investing].
Disclosure: No positions at time of writing.