More Commission-Free ETF Choices as TD Ameritrade Expands Program

TD Ameritrade investors now have access to more than 550 commission-free ETFs, up from around 300, with 12 new providers and an additional 13 Morningstar categories.

https://tickertapecdn.tdameritrade.com/assets/images/pages/md/Expanding: More commission-free ETFs for TD Ameritrade clients
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Key Takeaways

  • TD Ameritrade has expanded its commission-free ETF program

  • Advisors and investors now have access to more than 550 commission-free ETFs

  • Broad range of asset classes, sectors, and strategies represented

It’s said you can’t have too much of a good thing. So if you liked 314, how does more than 550 sound? That’s how many commission-free exchange-traded funds (ETFs) TD Ameritrade offers as of June 3, 2019.

The expansion to 569 from the previous 314 means TD Ameritrade now offers access to one of the largest and most diverse selections of nonproprietary, commission-free ETFs in the industry. And it’s not just the number that matters. It’s also the breadth and depth. The expanded lineup adds 12 new providers and covers an additional 13 Morningstar categories to offer more choices. In total, investors can now choose from 21 providers covering around 90 Morningstar categories.

“We’re pleased to offer our clients a larger selection of commission-free ETFs, and we’re particularly excited about the broad range of strategies, sectors, and asset classes available without a commission,” said Eileen Norton, director of investment solutions at TD Ameritrade Institutional. “It doesn’t end here. We’ll continue to innovate and expand the ETF Market Center and commission-free program going forward as part of our constant efforts to improve the investing experience for clients.”

New offerings include more municipals, commodities, index-tracking, countries, single-currency, sector, asset allocation, and low-cost core ETFs. Plus, advisors and investors can access actively managed ETFs using long-short smart beta and environmental social governance (ESG) strategies.

Why offer so many ETFs on a commission-free basis?

“We’re committed to providing our clients with access to a robust suite of commission-free products through the ETF Market Center,” said Keith Denerstein, director of investment products and guidance at TD Ameritrade. “With a wide range of commission-free ETFs to choose from and industry-leading research tools and analysis, we’re helping our clients build portfolios that meet their financial needs.”

What Is an ETF?

An exchange-traded fund (ETF) is listed on an exchange and can be traded like a stock, allowing investors to buy or sell shares in the collective performance of an entire stock or bond portfolio or an index as a single security. ETFs are subject to risks similar to those of stocks, including short selling and margin account maintenance.

ETFs are baskets of securities that typically track a sector-specific, country-specific, or a narrow- or broad-market index and are thus considered to be passively managed. (This means that, in most cases, someone isn’t actively choosing which stocks to buy and sell.) They’re listed on exchanges just like stock, so you can conveniently trade them through your brokerage account. Keep in mind, though, that the risks you face when trading equities are the same risks you face when trading ETFs.

You can also learn more by reading our side-by-side comparison of ETFs and mutual funds.

Industry-wide, the U.S. ETF market surged to $3.4 trillion across 1,996 ETFs at the end of 2018, a more than tenfold increase from $237 billion across 157 ETFs in 2004, according to research firm ETFGI.

Where to Find ETFs

Ready to start your search for the ETFs that best fit you? TD Ameritrade clients can start with the TD Ameritrade ETF Market Center, which provides a broad selection of ETF research tools and third-party market insights and analyses. The ETF Market Center is also now home to a list of more than 550 commission-free ETFs, which can provide you with a wide range of potentially low-cost investment opportunities.

Investing Basics: ETFs
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Key Takeaways

  • TD Ameritrade has expanded its commission-free ETF program

  • Advisors and investors now have access to more than 550 commission-free ETFs

  • Broad range of asset classes, sectors, and strategies represented

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ETFs are subject to risk similar to those of their underlying securities, including, but not limited to, market, investment, sector, or industry risks, and those regarding short-selling and margin account maintenance. Some ETFs may involve international risk, currency risk, commodity risk, leverage risk, credit risk, and interest rate risk.  Performance may be affected by risks associated with nondiversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income, small-capitalization securities, and commodities. Each individual investor should consider these risks carefully before investing in a particular security or strategy. Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

Information provided by TD Ameritrade, including without limitation that related to the ETF Market Center and commission-free ETFs, is for general educational and informational purposes only and should not be considered a recommendation or investment advice.

*ETFs purchased commission-free that are available on the TD Ameritrade ETF Market Center are available generally without commissions when placed online in a TD Ameritrade account. Other fees may apply for trade orders placed through a broker or by automated phone.

Particular commission-free ETFs may not be appropriate investments for all investors, and there may be other ETFs or investment options available at TD Ameritrade that are more suitable.

Short-Term Trading Fee (Holding Period for 30 Days). ETFs available commission-free that participate in the ETF Market Center may be subject to a holding period that commences with any purchase and extends through the following THIRTY (30) calendar days.  An account owner must hold all shares of an ETF position purchased for a minimum of THIRTY (30) calendar days without selling to avoid a short-term trading fee where applicable.  There is no limit to the number of purchases that can be effected in the holding period. Any order to sell within THIRTY (30) calendar days of last purchase (LIFO – Last In, First Out) will cause an account owner’s account to be assessed a short-term trading fee of $13.90 where applicable. For the purposes of calculation the day of purchase is considered Day 0. Day 1 begins the day after the date of purchase. The short-term trading fee may be applicable to each purchase of each ETF where such ETF is sold during the holding period. The short-term trading fee may be more than applicable standard commissions on purchases and sells of ETFs that are not commission-free.

TD Ameritrade receives remuneration from certain ETFs that participate in the commission-free ETF program for shareholder, administrative and/or other services.

No Margin for 30 Days. Certain ETFs purchased commission free that are available on the TD Ameritrade ETF Market Center will not be immediately marginable at TD Ameritrade through the first 30 days from settlement. For the purposes of calculation the day of settlement is considered Day 1.

Neither Morningstar Investment Management nor Morningstar, Inc. is affiliated with TD Ameritrade and its affiliates. Morningstar, the Morningstar logo, Morningstar.com, and Morningstar Tools are either trademarks or service marks of Morningstar, Inc.

TD Ameritrade does not provide tax advice. Investors should consult with a tax advisor with regard to their specific tax circumstances.

Asset allocation and diversification do not eliminate the risk of experiencing investment losses.

TD Ameritrade and all third parties mentioned are separate and unaffiliated companies, and are not responsible for each other’s policies or services.

Neither Morningstar Investment Management nor Morningstar, Inc. is affiliated with TD Ameritrade and its affiliates. Morningstar, the Morningstar logo, Morningstar.com, and Morningstar Tools are either trademarks or service marks of Morningstar, Inc.

Market volatility, volume, and system availability may delay account access and trade executions.

Past performance of a security or strategy does not guarantee future results or success.

Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.

Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.

The information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy, and is for illustrative purposes only. Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.

TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2019 TD Ameritrade.

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