From the May 2013 issue of Research Magazine • Subscribe!

April 29, 2013

Fidelity Expands Menu

Among its peers, Fidelity hasn’t been the most aggressive in its attempt to accommodate ETF investors. But the Boston-based firm is trying to change that.

Fidelity and BlackRock announced a deal that allows customers of Fidelity Brokerage Services to buy and sell 65 iShares ETFs commission-free. The move increases the number of eligible iShares funds from its previous figure of 30.

The ability to buy and sell ETFs without paying a brokerage commission is one of the biggest unfolding trends in the ETF marketplace.

Fidelity’s commission-free ETF menu now includes 10 iShares Core ETFs, like the popular iShares Core S&P 500 (IVV) and the iShares Core Total U.S. Bond Market ETF (AGG). IVV, one of the largest equity ETFs, has $39.9 billion in assets and charges annual expenses of just 0.07%. AGG has $14.8 billion and charges 0.08%.

Also included in the mix are iShares ETFs covering international stocks, fixed income and specialized equity sectors. 

In the commodities group, the four equity ETFs qualifying for online commission free trades are the iShares MSCI Global Gold Miners (RING), iShares MSCI Global Metals & Mining Producers (PICK), and the iShares MSCI Global Silver Miners (SLVP) and the iShares MSCI Global Agriculture Producers (VEGI).

Other popular ETFs on Fidelity’s commission-free menu are the iShares Dow Jones Select Dividend Index (DVY) and the iShares S&P U.S. Preferred Stock Index (PFF).

How does Fidelity’s commission-free ETF menu match up with similar offerings?

Currently, Fidelity’s menu is limited to just iShares ETFs. By comparison, competing commission-free ETF platforms like Charles Schwab, TD Ameritrade, and Vanguard use multiple ETF families and offer a larger menu of eligible ETFs for commission free trades.

Finally, Fidelity’s ETF customers will face restrictions not common to other brokerages. According to the company’s website, “Effective July 31, 2013 any eligible iShares ETFs purchased commission-free must be held for a minimum of 30 calendar days or a short-term trading fee will apply.” The short-term trading fee is $7.95 on the sale.

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