ETFs are surpassing mutual funds as the standard building blocks of stock and bond portfolios. Therefore, I’m taking a closer look at the latest commission-free ETF lists from the major brokers. Unfortunately, the marketing often focuses on quantity instead of quality. Who cares if they offer 500+ ETFs, if I only need six good ones? Here are the factors that I think are important:
- Total Assets. This is a measure of popularity and reputation. A more popular ETF will have a smaller bid/ask spread and won’t have to liquidate in a bear market. A more reputably ETF manager will have lower index tracking error. However, ETF size isn’t everything.
- Index/Asset Class. What index does it track? Does that index cover an asset class that I want to include?
- Cost. What is the expense ratio? Low costs are important.
Fidelity Commission-Free ETF full list. The currently advertises 357 commission-free ETFs (28 from Fidelity and 329 from iShares). The full list requires a log-in. Here is an which lists the 240 iShares ETFs (89 more have since been added).
Recent changes. In , Fidelity announced that it would match Schwab and increase the number of commission-free ETFs on their list to “more than 500” by the end of the month. However, in they announced that they added a few new Fidelity ETFs and 89 additional iShares ETFs (formerly 240) as part of a “first phase”.
In February 2017, Fidelity lowered the standard commission on online stock and ETF trades to $4.95 per trade, down from $7.95 previously. In August 2018, Fidelity announced a part of , eliminated many account minimums, and cut a bunch of mutual fund expense ratios by getting rid of share classes.
Largest ETFs on Fidelity Commission-Free ETF list. Here are the top 20 most popular ETFs on their list, sorted by largest total assets. I have added in the asset class (index) and expense ratio.
| ETF Name (Ticker) | Asset Class | Expense Ratio |
| iShares Core S&P 500 ETF (IVV) | US Large Cap Blend | 0.04% |
| iShares MSCI EAFE ETF (EFA) | International Large Cap Blend | 0.31% |
| iShares Core MSCI EAFE ETF (IEFA) | International Large Cap Blend | 0.08% |
| iShares Core U.S. Aggregate Bond ETF (AGG) | US Total Bond | 0.05% |
| iShares Core MSCI Emerging Markets ETF (IEMG) | Emerging Markets Stock | 0.14% |
| iShares Core S&P Mid-Cap ETF (IJH) | US Mid Cap Blend | 0.07% |
| iShares Russell 2000 ETF (IWM) | US Small Cap Blend | 0.19% |
| iShares Core S&P Small-Cap ETF (IJR) | US Mid Cap Blend | 0.07% |
| iShares Russell 1000 Growth ETF (IWF) | US Large Cap Growth | 0.20% |
| iShares Russell 1000 Value ETF (IWD) | US Large Cap Value | 0.20% |
| iShares MSCI Emerging Markets ETF (EEM) | Emerging Markets Stock | 0.67% |
| iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) | US Corporate Bonds | 0.15% |
| iShares Edge MSCI Min Vol USA ETF (USMV) | US Low Volatility | 0.15% |
| iShares S&P 500 Growth ETF (IVW) | US Large Cap Growth | 0.18% |
| iShares TIPS Bond ETF (TIP) | US Inflation-Protected Bond | 0.19% |
| iShares 1-3 Year Treasury Bond ETF (SHY) | Short-Term Treasury Bond | 0.15% |
| iShares Short Treasury Bond ETF (SHV) | Short-Term Treasury Bond | 0.15% |
| iShares Russell 1000 ETF (IWB) | US Large Cap Blend | 0.15% |
| iShares Core S&P Total U.S. Stock Market ETF (ITOT) | US Total Stock | 0.03% |
| iShares Russell Midcap ETF (IWR) | US Total Stock | 0.20% |
Lowest Expense Ratio ETFs on Fidelity Commission-Free ETF list. Here are the top 20 cheapest ETFs on their list, sorted by lowest expense ratio.
| ETF Name (Ticker) | Asset Class | Expense Ratio |
| iShares Core S&P Total U.S. Stock Market ETF (ITOT) | US Total Stock | 0.03% |
| iShares Core S&P 500 ETF (IVV) | US Large Cap Blend | 0.04% |
| iShares Core S&P U.S. Value ETF (IUSV) | US Large Cap Value | 0.04% |
| iShares Core S&P U.S. Growth ETF (IUSG) | US Large Cap Growth | 0.04% |
| iShares Core U.S. Aggregate Bond ETF (AGG) | US Total Bond | 0.05% |
| iShares Core MSCI International Developed Markets ETF (IDEV) | International Developed Large Cap Blend | 0.07% |
| iShares Short-Term Corporate Bond ETF (IGSB) | US Short-Term Corporate Bond | 0.06% |
| iShares Intermediate-Term Corporate Bond ETF (IGIB) | US Interm-Term Corporate Bond | 0.06% |
| iShares Broad USD Investment Grade Corporate Bond ETF (USIG) | US Total Corporate Bond | 0.06% |
| iShares 0-5 Year TIPS Bond ETF (STIP) | US Inflation-Protected Bond | 0.06% |
| iShares Core 1-5 Year USD Bond ETF (ISTB) | US Short-Term Bond | 0.06% |
| iShares 0-5 Year Investment Grade Corporate Bond ETF (SLQD) | US Short-Term Corporate Bond | 0.06% |
| iShares Core Total USD Bond Market ETF (IUSB) | US Total Bond | 0.06% |
| iShares Core S&P Mid-Cap ETF (IJH) | US Mid Cap Blend | 0.07% |
| iShares Core S&P Small-Cap ETF (IJR) | US Mid Cap Blend | 0.07% |
| iShares National AMT-Free Muni Bond ETF (MUB) | Municipal Bond | 0.07% |
| iShares S&P Short Term National AMT-Free Bond ETF (SUB) | Short-Term Municipal Bond | 0.07% |
| iShares Core U.S. REIT ETF (USRT) | US Real Estate | 0.08% |
| iShares Core High Dividend ETF (HDV) | US High Dividend Stock | 0.08% |
| iShares Core MSCI EAFE ETF (IEAFA) | International Developed Large Stock | 0.08% |
Commentary. Fidelity’s list includes a good mix of iShares ETFs with good management, low costs, and low bid/ask spreads. An individual investor can easily create a diversified portfolio of ETFs according to their desired asset allocation. However, in their latest round of additions, they added a bunch of iShares ETFs which were mostly more popular for professional traders and options buyers, not for long-term investors. For example, why would you buy EEM when you could buy IEMG with a much lower expense ratio? Don’t confuse quantity with quality.
“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone.”
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