Web Street Securities of Chicago, an online brokerage firm, has eliminated the commissions it charges on purchases, sales and exchanges of over 4,000 mutual funds it offers to online investors. The move propels Web Street Securities ahead of more than 160 online brokerage firm competitors, making it the first such firm to offer investors free mutual fund trades.
Web Street is expecting to use free fund trades as its loss leader. Mutual fund transaction revenues accounted for only 3.8 percent of total revenues to online brokerage firms in 1999, according to Cerulli Associates of Boston. By offering free mutual fund trades, Web Street hopes to attract new customers and retain existing ones, Web Street said in a statement.
Web Street offers 1,000 no-load funds from families including Janus of Denver, Colo. and T. Rowe Price of Baltimore as well as load funds from OppenheimerFunds of New York, Putnam Investments and MFS, both of Boston, and Franklin Templeton of San Mateo, Calif.