TD Ameritrade Launches Over 100 Commission Free ETFs
TD Ameritrade Holding Corp. (AMTD: 16.25 ,-0.16 ,-0.98%) announced the launch of over 100 commission-free exchange-traded funds, heating up competition with rivals including Charles Schwab Corp. (SCHW: 14.04 ,-0.09 ,-0.64%), which took similar steps beginning last year.
The Omaha, Neb. online brokerage said the ETFs will be available to both retail investors and independent registered investment advisers. ETFs, which trade like stocks, have gained in popularity in recent years as the investment tools track a particular index, sector, industry or even commodity.
The commission-free ETF announcement underscores a broader pricing war among online brokerages. Last year, Schwab, E*Trade Financial Corp. (ETFC: 14.67 ,+0.06 ,+0.41%) and Fidelity Investments all cut their trading commissions. TD Ameritrade has said it has no plans to change its flat fee of $9.99 per trade for all customers.
Pricing battles are also prominent in the ETF space, with Schwab, Vanguard Group, and Fidelity all offering some degree of commission-free trades in an effort to capture market share.
If investors elect to trade out of the ETFs within 30 days, Tomczyk said the customers would be charged a $19.99 fee, but noted that such a fee "works very similar to how an index mutual fund operates."
Short term trading fee for ETFs, and they collect no payment from the ETF companies, odd.