The leading online brokerages for
exchange traded fund investors
offer free ETF trades or dirt-cheap rates, according to IBD's
survey of investors. This lets
dollar-cost average or rebalance frequently at no cost just as
they do with
ETF providers are covering the cost of trades to attract
to their funds rather than to competitors, which in many cases
track the same index.
Investors should beware the fine print. Some brokers charge
fees for frequent trading, have account minimums or offer free
trades on a short list of
Here's a look at five online brokers most favored by
respondents to IBD's
Best Online Brokers
survey and their ETF trading perks.
. This platform fromTD Ameritrade (
), blows away competitors in the ETF arena, offering the widest
array of commission-free trades on 37 funds from iShares, 32 from
Vanguard, 12 from the SPDR family, and one each from Barclays,
Deutsche Bank, Pimco, PowerShares, Market Vectors and
The firm charges a $19.99 fee for short-term ETF trades if you
sell a position within 30 days of buying it. It's the only firm
on this list that has no minimum for regular accounts. The
minimum for margin accounts is $2,000. All other trades cost
. This company (
) provides free trading on 31 Global X Funds and five
FactorShares. But it requires the highest account minimum --
$10,000 -- of any other brokers in this list.
The minimum for IRA accounts is $5,000. It charges a $10
minimum monthly activity fee, so no matter what, you will be
charged at least $10 a month in commissions.
Otherwise, it costs half a cent per share per trade, or a
minimum of $1, with a maximum of 0.5% of the trade.
This giant gives free trades on 30 widely traded iShares ETFs and
its one ETF,Fidelity Nasdaq Composite Index Tracking Stock Fund (
Otherwise, commissions run $7.95 a trade. The minimum account
requirement is $2,500.
Fidelity says iShares ETFs are not "margin eligible for 30
days from settlement," which means those shares can count toward
your margin-buying power after 30 days.
This firm (
) lets investors trade 15 Schwab ETFs as often as they want, with
no penalties for short-term trades. Normal commission fee is
$8.95. The account minimum is $1,000.
The firm offers no free ETF trading, but charges merely 1 cent
per share for up to 500 shares and 0.6 cent a share thereafter
for all trades. Regular commissions run $6.99 to $9.99 depending
on the order size and type. It requires a $5,000 minimum for
regular accounts and a $30,000 minimum for day-trading