TD Ameritrade Makes Major Splash In Commission-Free ETF Battle

When it comes to fee battles in the world of exchange-traded funds, such tussles usually take place among issuers. Several major brokerage firms have made it cheaper for investors to trade ETFs by offering commission-free programs, an arena that's proving to be a new frontier of cost tussles.

On Monday, brokerage giant TD Ameritrade Holding Corp. AMTD announced a major expansion of its commission-free ETF platform, which will see the company triple the number of ETFs clients can trade without commission to 296 from 100. That means TD Ameritrade's commission-free platform is now larger than Charles Schwab Corp SCHW's Schwab ETF OneSource platform, previously the biggest offering of ETFs on a commission-free basis.

TD Ameritrade “will offer the most commission-free ETFs in the industry as well as the largest selection of non-proprietary, commission-free ETFs,” according to a statement issued by the company. “Through the upgraded TD Ameritrade commission-free ETF program, registered investment advisor (RIA) and individual investor clients will have access to non-proprietary, low-cost ETFs from eight leading providers.” 

TD Ameritrade's Commission-Free Offerings

ETF providers on TD Ameritrade's commission-free platform include big names such as BlackRock, Inc. BLK's iShares, Invesco Ltd. IVZ's PowerShares, WisdomTree Investments, Inc. WETF and JPMorgan Chase & Co. JPM's JPMorgan Asset Management.

New York-based WisdomTree will have a whopping 72 of its 87 ETFs on TD Ameritrade's commission-free platform. 

“TD Ameritrade will provide investors and advisors greater choice and flexibility by allowing all of its clients to buy and sell commission-free ETFs that cover 77 Morningstar categories; provide increased sector and commodity coverage,” according to TD Ameritrade.

A Notable Exclusion

Vanguard, the second-largest U.S. ETF issuer behind iShares, has been dropped from the TD Ameritrade no-commission platform. Pennsylvania-based Vanguard offers some of the least expensive ETFs in the industry and is home to several of the largest ETFs.

Still, data prove investors love not having to pay commissions on their ETF investments.

“Over the past seven years, strong client demand and market appreciation has driven rapid growth in the firm’s commission-free ETF assets under management, resulting in a 31 percent compounded annual growth rate with assets growing nearly seven times,” said TD Ameritrade.

Related Link: Where To Be With Bond ETFs