Commission-free exchange-traded fund platforms are popular throughout the brokerage industry. Fidelity, Charles Schwab Corp. (NYSE: SCHW) and E*Trade Financial Corp. (NASDAQ: ETFC) offer over 550 ETFs combined on a commission-free basis.
But there's a new player on the commission-free ETF stage.
Firstrade Securities, Inc. said Monday it will offer 703 ETFs without commissions, by far the largest no commission ETF platform in the industry.
“Under the just introduced program, Firstrade investors will have a wide selection of ETFs to choose from across eight asset classes, three exchanges, 82 categories and 40 fund families,” said Firstrade in a statement. “These available ETFs are designed for long-term investors and must be held for at least 30 days (if less than 30 days, the low-cost commission is $2.95). Also included are low expense ratio ETFs from leading fund families — Vanguard, iShares, SPDR State Street and First Trust, among others. In order to minimize risk, no leveraged ETFs are being offered.”
Another Favorable Fee
In most cases, investors to need to hold an ETF for more than 30 days to get the benefit of the no commission deal. If they don't do that, they're subject to redemption or early sell fees of up to $20 in some cases. While Firstrade has an early sell fee on the ETFs on its commission-free menu, it's tiny by comparison at just $2.95.
“Firstrade had already set among the lowest trading commissions in the industry, having reduced its commission for stocks, ETFs and options from $4.95 to $2.95 per trade in September 2017,” said the firm.
In additional to Vanguard, iShares, SPDR State Street and First Trust, other issuers on the Firstrade platform include Guggenheim, Global X, JP Morgan Asset Management, PIMCO, Deutsch Bank's DWS, PIMCO, Reality Shares, VictoryShares and WisdomTree.
Well-known ETFs on the Firstrade commission-free platform include the following: WisdomTree US LargeCap Dividend ETF (NYSE: DLN), Alerian MLP ETF (NYSE: AMLP), ARK Innovation ETF (NYSE: ARKK), PIMCO Active Bond ETF (NYSE: BOND) and the iShares MSCI KLD 400 Social ETF (NYSE: DSI).
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