Today, Charles Schwab (NYSE:SCHW) announced a new platform for trading exchange-traded funds at no commission. The Schwab ETF OneSource platform makes 105 different ETFs available to Schwab customers commission-free, with ETFs managed by a variety of different management firms, including State Street's (NYSE:STT) Global Advisors division.
Prior to the announcement, Schwab had offered its own proprietary ETFs at no commission to customers. But the OneSource platform expands Schwab's commission-free offerings to include some of the largest and best-known ETF managers in the business, with State Street the No. 2 ETF provider in the industry.
Schwab CEO Walt Bettinger compared the new ETF platform to its similar Mutual Fund OneSource platform, which it released 20 years ago. Bettinger said that he believes the platform "will deliver enormous benefit and change the way our clients buy and sell ETFs."
Joining the crowd
With the move, Schwab joins other providers with expansive ETF offerings. In late 2010, TD AMERITRADE (NASDAQ:AMTD) came out with its platform of 101 commission-free ETFs. Vanguard has also offered all 64 of its ETFs at no commission to its customers for nearly three years.
Bettinger noted that investors "want sophisticated, low-cost strategies and more control over their investment choices and outcomes," and he believes that ETF OneSource will give Schwab customers the cost-sensitive investing tools they need. Still, as Schwab senior vice president Peter Crawford noted, "This is not about cost alone. Side-by-side with affordability, we also provide the guidance and educational resources to help investors and advisors select the right ETFs to meet their needs."
Most notably, though, the move will help cement Schwab's presence in ETFs among its customers. With the company's proprietary ETFs only gathering $8.6 billion in assets as of the end of 2012, the new OneSource platform should help Schwab build its $152 billion in custodied retail ETF assets across its customer accounts and make it a bigger player in the ETF industry.
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