Fidelity to Offer Commission-Free Trading on 25 iShares ETFs

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Includes: ACWI, AGG, EEM, EFA, EMB, IJH, IJJ, IJK, IJR, IJS, IJT, IVE, IVV, IVW, IWB, IWD, IWF, IWM, IWN, IWO, IWV, LQD, MUB, SCZ, TIP
by: Michael Johnston

Fidelity Investments announced today that it will offer its retail customers commission-free online trades for a suite of 25 iShares ETFs. The funds included in the commission-free platform include ETFs in all nine domestic equity style/size categories, as well as international equity and fixed income options. “Fidelity has partnered with the leading ETF provider in the market to bring investors the best brokerage offering in the industry today,” said Kathleen A. Murphy, president of Personal Investing at Fidelity Investments. “Simply put, we’re offering the broadest selection of commission-free ETFs from the undisputed ETF leader, and it’s only available through Fidelity.”

The iShares ETFs will be available for commission-free trading beginning today.

The move seemingly comes as an effective response by iShares and Fidelity to the commission-free ETF trading offers from a common competitor. Charles Schwab’s made a splash in the ETF industry last year by introducing a line of ETFs with lower expense ratios than comparable iShares funds that also trade commission-free in Schwab accounts. The focus on low costs has seemingly worked well for Schwab, as the issuer’s product line has expanded to include six ETFs with almost $350 million in aggregate assets at the end of the year.

Fidelity has only dipped its toes into the ETF waters, launching the NASDAQ Composite Index Tracking Stock (NASDAQ:ONEQ) in 2003 but doing little to promote the fund. ONEQ currently has about $130 million in assets. However, speculation has swirled recently about Fidelity stepping up its ETF presence.

Fidelity will offer 25 iShares ETFs commission-free for a period anticipated to be at least three years. The brokerage firm also announced that it is reducing its online U.S. equity trade commissions to $7.95 for all customers.

Disclosure: Long IVV.