Trade Index ETF Funds for FREE
Competition in retail trading has led to incredible cuts in the price of trading index exchange-traded funds. Charles Schwab, Fidelity and Vanguard now offer commission free trading on a myriad of indexed exchange-traded funds, opening the door for investors to create highly balanced portfolios at zero cost.
Charles Schwab ETFs
Charles Schwab now offers completely free trades on its own branded line of exchange-traded funds. Most of its ETFs are solid indexing trackers with annual fees less than 50 basis points. Compare that to mutual funds, which often earn commission free trades, but cost as much as 2% per year on assets under management.
Fidelity Free Index ETFs
Fidelity was a late comer to the exchange-traded fund business, and few expect the mutual fund company to ever catch up. However, the prospect of earning new business on commission free ETF trades was alluring, so the company teamed up with iShares to offer free trades on 25 of iShares’ most popular index ETFs.
Vanguard Commission Free ETFs
Vanguard is to investing as WalMart is to retail. With the power of economies of scale and intensive cost-cutting, Vanguard has carved its own space in exchange-traded funds with tiny annual expense fees. Now it is going even further, introducing commission free trades on all of its Vanguard exchange-traded funds for investors with an open brokerage account.
Maximize Your Savings
With less than $10,000 investors can now own a range of exchange-traded funds from the niche funds to popular iShares index funds without any costly transcation fees. Granted, you will have to open a brokerage account at all three brokers, however you’ll enjoy the benefits of commission free trades and be able to routinely add to your index ETF holdings each month, in small deposits, much as you would to mutual funds. If you’re currently invested in indexed mutual funds, consider the switch. A retirement portfolio with $100,000 in mutual funds could easily be replicated with $100,000 in commission free exchange-traded funds, saving you $750+ per year in annual fees. Now that is worth the 15 minutes to open another brokerage account!
