Fidelity Investments said on Tuesday that its retail brokerage customers can trade the firms Nasdaq-tracking ETF commission-free until the end of August.
Orders for the Nasdaq Composite Index Tracking Stock must not exceed 5,000 shares and be placed online as either market or limit orders only, the firm said. Fidelity said investors taking advantage of the initiative could realize savings of between $8 and $32.95 per trade depending on commission schedule.
ETFs are a basket of stocks, but unlike mutual funds, can be bought and sold throughout the day at market price. There are also no investment minimums. The ETF universe is miniscule compared to that of mutual fund, but has more than quadrupled since the end of 1999. ETFs had assets of about $150 billion, according to a December 2003 estimate by the Investment Company Institute. The mutual fund industry has a staggering $7.4 trillion in assets.