Schwab Doubles Commission-Free ETF Lineup To Over 500

Charles Schwab Corp. SCHW, one of the largest discount brokers, said Tuesday it's adding nearly 250 exchange traded funds to its Schwab ETF OneSource platform, expanding what was already a sizable slate of ETFs offered sans commissions.

What Happened

In addition to doubling the size of its commission-free ETF offering to 503 funds, Schwab is adding iShares ETFs to the OneSource platform. BlackRock Inc.'s BLK iShares unit is the world's largest ETF issuer.

“With these additions, Schwab clients will be able to buy and sell 503 ETFs covering 79 Morningstar Categories with $0 online commissions, no enrollment requirements and no early redemption fees or activity assessment fees – key differentiators for investors comparing Schwab ETF OneSource to other commission-free ETF offerings,” said San Francisco-based Schwab in a statement.

Why It's Important

Schwab's OneSource expansion was announced on the same day as a similar announcement from rival Fidelity. Boston-based Fidelity said it also more than doubled the amount of ETFs it offers to clients with no commissions to over 500.

Fidelity is boosting the number of iShares ETFs it offers commission-free. The broker's commission-free ETF platform consists of its own ETFs and iShares products.

As is the case with other elements of the ETF business, competition is fierce in the commission-free ETF arena as brokers see investors' desire to save on costs and fees as a prime avenue for attracting more assets.

Even with the expansions, Schwab and Fidelity have a ways to go to catch rival commission-free ETF platforms. For example, Firstrade Securities allows no commission trading on the entire U.S. ETF universe while Vanguard offers its clients commission-free trading on all U.S.-listed ETFs except for inverse and leveraged products.

What's Next

On March 1, 90 iShares will debut on Schwab ETF OneSource while State Street Corp. STT, Invesco Ltd. IVZ and WisdomTree Investments WETF will add to the number of ETFs currently offered on Schwab's commission-free roster.

“Aberdeen Standard Investments, ALPS Advisors, Direxion, Global X ETFs, John Hancock Investments, J.P. Morgan Asset Management and PIMCO – all current participants in the Schwab ETF OneSource program – are also adding funds to the lineup,” according to the statement.

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Photo credit: Mike Mozart, Flickr

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