Commission-Free ETF Push Continues

Listen to The ETF Store Show every Tuesday at 9am on ESPN 1510 as we cover everything you need to know about Exchange Traded Funds and the world of investing.

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Charles Schwab recently introduced 16 additional commission-free ETFs on their Schwab ETF OneSource platform, which now features a total of 121 commission-free ETFs.  On our most recent radio broadcast, we explained the broader significance of this move and discussed where ETF commissions should factor into the decision-making process when evaluating ETFs for your own portfolio.  We also looked at the telling results of a new ETF investor survey from Schwab which, among other things, found that half of the respondents plan to increase their ETF holdings over the next year – a 22 percent increase over those who said the same in 2012.  Beth Flynn, vice president of Schwab’s ETF platform management, summed up the survey results, stating that “demand is up across the board, and investors who own ETFs appear to be more interested in the product than ever – we’re seeing less discussion of ‘if’ and more about ‘how’ investors will buy and use ETFs”.  On the show, we explained why a growing number of investors are moving to ETFs and why you shouldn’t expect to see this trend slow down any time soon.

In our weekly market update, we provided the key details on the last minute deal reached in Washington to reopen the government and raise the debt limit.  While politicians, once again, “kicked the can down the road”, continued dysfunction in Washington could ultimately become a real concern for the US economy and of course, the stock market.  In our ETF spotlight segment, we highlighted the Vanguard Small Cap ETF (ticker VB).  For longer-term investors, small cap stocks can offer the potential for growth and also some diversification benefits in your portfolio.  Since 1926, small cap stocks have outperformed large cap stocks by about 2% a year.  VB offers an extremely low cost, efficient way to access small cap stocks.  Learn more about VB and other Vanguard ETFs by visiting