Recs

2

An Update on the Biggest Boon Yet for Investors

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

In October, my colleague Dan Caplinger wrote about the biggest boon yet for investors: TD AMERITRADE's (Nasdaq: AMTD  ) entree into the fight for dollars in the exploding exchange-traded fund market. "Although TD AMERITRADE was slow to get into the game, it's fired what could be the winning shot in the latest battle over commission-free ETFs," Dan wrote.

The shot
TD AMERITRADE launched more than a hundred ETFs at no commission. Importantly, the ETFs spanned the universe of ETF companies -- iShares, SPDRs, Vanguard, to name a few -- bucking the trend of a discount broker partnering with a specific fund family.

Up to then, Charles Schwab (NYSE: SCHW  ) offered Schwab-branded ETFs at no commission, Fidelity offered 25 no-commission ETFs from BlackRock's (NYSE: BLK  ) iShares unit, and Vanguard offered its own ETFs sans the normal broker rake.

In more recent months, Scottrade unveiled its own line of funds, leaving E*TRADE (Nasdaq: ETFC  ) as the best-known discount brokerage without a horse in the race. (And with major ETF provider State Street  (NYSE: STT  ) also on the sidelines, there seems to be a natural partnership opportunity.)

How's it working out?
When TD AMERITRADE Executive Vice President Peter Sidebottom stopped by Fool HQ earlier in June, we asked him how the company's ETF strategy has worked out thus far. According to Sidebottom, as measured by client satisfaction and money inflows, the program has been "tremendously successful."

In determining the company's ETF strategy, he said the decision came down to core values -- TD AMERITRADE has "a belief in open markets."

Plus, it's good business. In October, Dan wrote that not partnering with a single ETF provider could be "the winning shot." Sidebottom obviously feels that way, telling a small group of Fools that fostering an open marketplace with the best product is simply hard for a competitor to match.

Sidebottom said that on the retail side, for every $1 invested in a commission-free ETF, the company is routinely getting $0.50 or more in other assets. In the company's most recent quarter, it posted record trading volume and "gathered its highest amount of quarterly net new assets to date," reported The Wall Street Journal.

While it would be silly to attribute such results solely to the company's ETF strategy, that strategy does seem to have been a shot in the arm.

For more on brokerages or commission-free ETFs, visit our Broker Center today.

Fool.com managing editor Brian Richards doesn't own shares of any companies mentioned.

Motley Fool newsletter services have recommended buying shares of Charles Schwab and BlackRock. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1511879, ~/Articles/ArticleHandler.aspx, 11/23/2014 8:37:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Brian Richards
TMFBrich

Now: I work on global strategy for The Motley Fool with a focus on Canada, Europe, and South America. Former: Managing Editor of Fool.com. The longer version: http://www.linkedin.com/pub/brian-richards/31/164/461/.

Today's Market

updated 1 day ago Sponsored by:
DOW 17,810.06 91.06 0.51%
S&P 500 2,063.50 10.75 0.52%
NASD 4,712.97 11.10 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

11/21/2014 4:02 PM
AMTD $34.27 Down -0.13 -0.38%
TD Ameritrade CAPS Rating: ****
BLK $355.91 Up +8.37 +2.41%
BlackRock CAPS Rating: ****
ETFC $23.03 Up +0.20 +0.88%
E*TRADE Financial… CAPS Rating: ***
SCHW $28.28 Down -0.06 -0.21%
Charles Schwab CAPS Rating: ***
STT $76.57 Up +0.37 +0.49%
State Street Corp CAPS Rating: ****