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Brokerage Firms Vying for Piece of ETF Market
March 2, 2011
SAN DIEGO (ETFguide.com) – The table is set for the next stage within the rapidly evolving ETF market: Proprietary ETFs furnished with commission free trading offered by leading brokerage firms. And St. Louis, MO-based Scottrade appears to be the next company to follow this path.
Through its acquisition of FocusShares, discount brokerage firm Scottrade is close to launching its own family of ETFs. The funds will cover broad U.S. equity and industry sectors and expense ratios for the Scottrade branded “FocusShares ETFs” are expected to be between 0.12% to 0.25%. The precise timing of the Scottrade ETF launch is unknown but expected to occur in the first or second quarter of this year.
Other brokerage platforms like Charles Schwab, Fidelity, TD Ameritrade and Vanguard have been vying for a greater share of the ETF assets and trading activity.
Schwab has 13 proprietary ETFs and TD Ameritrade offers five 'TDX Independence' target dated retirement ETFs (NYSEArca: TDX). The TD funds have target dates for 2010 (NYSEArca: TDD), 2020 (NYSEArca: TDH), 2030 (NYSEArca: TDN) and 2040 (NYSEArca: TDV). The TDX ETFs are sub-advised by Amerivest Investment Management, which is a subsidiary of TD Ameritrade Holding Corporation
In related news, Interactive Brokers (IB) announced commission-free trading for five funds from a new ETF family called “FactorShares.” The offer applies to IB’s clients using its Trader Workstation platform.
Commission-free trading currently applies to the first five FactorShares products:
--FactorShares 2X: S&P500 Bull/TBond Bear (NYSEArca: FSE)
--FactorShares 2X: TBond Bull/S&P500 Bear (NYSEArca: FSA)
--FactorShares 2X: S&P500 Bull/USD Bear (NYSEArca: FSU)
--FactorShares 2X: Oil Bull/S&P500 Bear (NYSEArca: FOL)
--FactorShares 2X: Gold Bull/S&P500 Bear (NYSEArca: FSG)
“FactorShares offers our clients a streamlined, cost-effective approach to spread trading,” said Thomas Peterffy, CEO of Interactive Brokers. “With one commission-free trade, our clients can now access the daily spread between major asset classes within a single ETF position.”
Interactive Brokers has agreed to waive the flat-rate and cost-plus brokerage commissions for transactions in FactorShares ETFs and will not impose short-term trading fees. |
