Now this is an interesting twist to the ETF game – Charles Schwab (SCHW) is launching 8 new exchange-traded funds (ETFs) that are commission-free for Schwab customers.
Here are the names and symbols of the four that begin trading today:
Schwab U.S. Large-Cap ETF (SCHX), following the Dow Jones U.S. Large-Cap Total Stock Market
Schwab U.S. Small-Cap ETF (SCHA), following the Dow Jones U.S. Small-Cap Total Stock Market
Schwab International Equity ETF (SCHF), following the FTSE Developed ex-US Index
Adding commission-free trading of these select ETFs is an interesting experiment in attracting ETF investors but I don’t see it being a huge success. Free trading of 8 specific ETFs doesn’t sound like the best deal in the world, especially since these ETFs don’t appeal to commission-generating active traders that constantly hit the buy and sell buttons.
Besides, people that really care about commissions will be turned off by Schwab’s $12.95 per trade (up to 1,000 shares for customers with an account balance below $1 million) stock commission rate, plus extra charges if you use their automated phone system or a live broker. In a world where companies like TradeKing offer $4.95 stock trades, free trades on 8 ETFs are just no big deal.
In December, Schwab will launch the following funds:
Schwab U.S. Large-Cap Growth ETF (SCHG), following the Dow Jones U.S. Large-Cap Growth Total Stock Market Index
Schwab U.S. Large-Cap Value ETF (SCHV), following the Dow Jones U.S. Large-Cap Value Total Stock Market Index
Schwab International Small-Cap Equity ETF (SCHC), following the FTSE Developed Small Cap ex-US Liquid Index
Schwab Emerging Markets Equity ETF (SCHE), following the FTSE All-Emerging Index