As the exchange-traded fund (ETF) market has boomed, the brokerage industry has responded with unique ways of gaining more ETF assets. The most basic and popular way of doing so is by offering select groups of ETFs on a commission-free basis.
Brokerage giants The Charles Schwab Corporation (SCHW), E*TRADE Financial Corporation (ETFC), Fidelity Investments and TD Ameritrade Holding Coproration (AMTD), among others, have extensive lists of ETFs that they offer to clients commission free. None, however, feature the massive menu of no-commission ETFs now being offered by Firstrade. In a statement issued Monday, Firstrade said that it is now offering more than 700 ETFs to its clients on a commission-free basis. (See also: TD Ameritrade Expands Commission-Free ETFs.)
For those keeping score at home, Firstrade has 703 no-commission ETFs to choose from. The commission-free platforms of E*TRADE, Fidelity, Schwab and TD Ameritrade would have to be combined to exceed the number of commission-free ETFs offered by Firstrade.
"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 the statement. "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." (For more, see: ETF Growth Spurt Will Continue.)
While many big-name brokers do not charge clients to trade some ETFs, those same firms levy hefty charges if clients do not hold the ETF in question for at least 30 days. For example, E*TRADE and TD Ameritrade will charge clients almost $20 if they buy a commission-free ETF and sell it in less than 30 days. Firstrade is breaking new ground on that front with an early sell fee of just $2.95.
With over 700 ETFs on its commission-free menu, it is not surprising that Firstrade features the largest number of issuers on its no-commission offering. Beyond Vanguard, iShares, SPDR State Street and First Trust, other issuers on the Firstrade platform include Guggenheim, Global X, JPMorgan Asset Management, PIMCO, Deutsch Bank's DWS, Reality Shares, VictoryShares and WisdomTree.
Overall, there are 40 ETF sponsors on the Firstrade platform – five times as many as are found on TD Ameritrade and more than triple the amount on E*TRADE. Over 500 of the ETFs being offered by Firstrade commission free have Morningstar ratings of three, four or five stars.