TD Ameritrade Unveils Big Expansion Of Commission-Free ETF Roster

TD Ameritrade Holding Corp. AMTD, one the largest discount brokerage firms, said Monday it's upping the number of exchange traded funds it offers to clients on a commission-free basis to 569 from over 300.

The move means TD Ameritrade clients will have commission-free access to 569 ETFs 21 issuers spanning 90 Morningstar categories.

What Happened

“The expansion, effective June 1, 2019, gives more than 7,000 registered investment advisors (RIAs) and TD Ameritrade’s 11 million individual investor client accounts access to one of the largest and most diverse selections of non-proprietary, commission-free ETFs in the industry,” according to a statement issued by Nebraska-based TD Ameritrade.

TD Ameritrades commission-free ETF platform includes funds from iShares, State Street SPDR and Invesco Ltd. IVZ, three of the four largest U.S. ETF sponsors. Other well-known issuers on the platform include First Trust, FlexShares, Global X, Goldman Sachs Asset Management, JPMorgan Asset Management, John Hancok, Nuveen and WisdomTree Investments, Inc. WETF.

Why It's Important

Commission-free ETF platforms are found throughout the brokerage industry as companies such as TD Ameritrade use these programs to lure investors and traders to their offerings. Earlier this year, rival Charles Schwab Corp. SCHW doubled the size of its Schwab ETF OneSource platform to just over 500 ETFs.

On the same day in February, Fidelity also announced the expansion of its commission-free ETF program to over 500 funds. Fidelity only offers its ETFs and iShares products on a commission-free basis. Vanguard, the second-largest U.S. ETF sponsor, offers nearly the entire U.S. ETF universe, excluding leveraged funds, to its clients free of commissions.

TD Ameritrade has been offering commission-free ETF trading since 2010.

What's Next

At the end of last year, there were nearly 2,000 ETFs trading in the U.S., a number expected to continue growing. That provides room for brokerage firms, such as TD Ameritrade, to bring more funds onto their commission-free ETF platforms.

With more sought after younger investors embracing ETFs, it's possible TD Ameritrade and rival brokerage firms will continue expanding commission-free ETF programs to lure millennial investors.

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