What to do about investors who hate paying exchange-traded fund trade commissions?
Charles Schwab Investment Management's answer: Hit 'em with zero-commission ETFs.
Schwab today announced the launch of Schwab ETF OneSource, a new ETF platform that provides advisers and investors access to commission-free ETFs.
The new platform features 105 ETFs spanning major asset classes, including such funds from leading providers as State Street SPDR ETFs, Guggenheim Investments and PowerShares, as well as ETF securities, U.S. commodity funds and Schwab's own funds.
The platform is a response to the 2012 ETF Investor Study by Charles Schwab, which was released this past October. According to the study, cost is the main concern of investors when considering an ETF, followed by a provider's reputation and track record. In addition, trade commissions rank second among the top three factors for evaluating ETF costs, preceded by expense ratios and follows by discounts and premium pricing.
The study also reported that 41% of investors expect to increase ETF investments in the next year.
"Today's investors and the advisors who serve them want sophisticated, low-cost strategies and more control over their investment choices and outcomes," CEO Walt Bettinger said in a press release. "By working with these leading ETF managers to offer the largest selection, we've created a new home for clients to buy and sell ETFs that is an important complement to the tools and resources we offer to help them achieve their goals."
Not all funds come commission-free. Service charges do apply for trade orders placed via a broker ($35) or automated phone ($5). In addition, some transactions excluding Schwab ETFs are not eligible for commission waivers, such as short sells and buys to cover.
In related news, Guggenheim Investments today announced that 40 of its ETPs will be available through the Schwab ETF OneSource program. “Our participation in the program underscores our commitment to offering exchange traded products that meet the financial needs of today’s investors,” stated William Belden, Head of Product Development at Guggenehim Investments.