Fidelity Adds 5 to Lineup of No-Commission iShares ETFs

Asset flows and accounts with these ETFs are growing at three times the rate of other ETF trading

Online broker Fidelity Investments has increased the number of iShares ETFs that can be traded for free on Fidelity.com to 30 from 25, the company said Wednesday.

Investors working with an RIA using Fidelity’s brokerage platform can also trade these exchange-traded funds for free, the company says.

The five new iShares ETFs in Fidelity’s commission-free line-up include funds that may be attractive to income seekers:  iShares iBoxx High Yield Corporate Bond Fund (HYG), iShares Dow Jones Select Dividend Index Fund (DVY), iShares Dow Jones International Select Dividend Fund (IDV), iShares Dow Jones US Real Estate Index Fund (IYR) and iShares MSCI ACWI ex US Index Fund (ACWX).

Fidelity made 25 iShares ETFs available to online investors on a commission-free basis a year ago. These exchange-traded funds cover nine U.S. equity-style categories, from large value to small growth, as well as international equity and fixed-income asset classes.

The ETFs that can be traded for free have no minimum holding period.

(Also last year, Fidelity let investors trade more than 900 exchange-traded products and all domestic equities on Fidelity.com for $7.95 per trade, and it launched ETF research and analysis tools.)

“We’re pleased to extend our partnership with BlackRock to give investors even more choices for how they can diversify their portfolios with ETFs – all at a tremendous value,” said James C. Burton, president of Fidelity’s retail brokerage business, in a press release.

“And, with the five new iShares ETFs addressing timely customer needs, we are confident investors will continue to see the benefits of commission-free ETF investing at Fidelity,” he added.

In October 2010, TD Ameritrade began offering free online trading on 100 ETFs, if they are held for more than 30 days. Charles Schwab lets brokerage clients trade Schwab ETFs for free, and Vanguard lets investors buy its ETFs online without commissions. 

Fidelity says that over the past year both the amount of asset flows and the number of accounts holding commission-free ETFs have grown at three times the rate of other ETFs and accounts.

According to Fidelity research, overall ETF investing is poised to increase in 2011.

In a December 2010 survey, Fidelity found that 44% of investors are likely to invest in ETFs in the next three months, up 33% from December 2009. And, a poll of active investors in October 2010 revealed that 74% of respondents planned to trade more ETFs in the next 12 months.

Read about Morningstar's new ETFs at AdvisorOne.

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