Commission-free ETFs will become the norm, Schwab CEO says
Walt Bettinger says ETF OneSource will be expanded to a 'measurable extent'
When it comes to trading fees for exchange-traded funds, investors and financial advisers should get used to paying less.
While The Vanguard Group fired a hefty salvo in the ETF low-fee battle earlier this month, Walt Bettinger, president and chief executive of Charles Schwab Corp., on Friday morning said the list of ETFs at Schwab with no transaction fees will likely be expanded to a “measurable extent.”
Schwab started the year with 242 ETF offerings on its commission-free OneSource platform, and added 12 more in early January.
(More: SEC proposes making it easier to start ETFs)
On July 2, Vanguard announced it was expanding beyond its own 77 funds to include nearly 1,800 ETFs that will qualify for commission-free online transactions.
The commission-free ETFs include most of Vanguard’s offerings, as well as ETFs from BlackRock, Schwab, and State Street Global Advisors.
On July 10, Schwab announced 11 additional ETFs were added to its commission-free platform, bringing the total to 265.
Mr. Bettinger’s comments came during the question-and-answer period of Schwab’s conference call to discuss the company’s second-quarter earnings, which were reported on Tuesday.
“Our plan is to continue to expand ETF OneSource, and it’s possible we will expand it more rapidly than we would have” if Vanguard hadn’t announced its expanded list of commission-free ETFs, he said.
Describing trading as “largely a commodity,” Mr. Bettinger added that, in terms of competing lists of no-transaction ETFs, “there’s a certain level where enough is enough.”
(More: The regulatory hole around ETFs get SEC scrutiny)
When asked to elaborate on when Schwab might expand its own list of commission-free products, he refused to “disclose whether we’re going to be offensive or defensive.”
Emily Farrell, a Vanguard spokeswoman, declined to comment on Schwab’s strategy beyond saying, “We’re lowering the costs for our investors, and if that benefits all investors, that’s even better.”
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