Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)

In case you aren’t aware that a huge profit source for every broker is your idle cash, Bloomberg reports that Fidelity and Schwab are blocking all new purchase trades of new money market ETFs (gift article) from Blackrock and Texas Capital. Here’s what Fidelity and Schwab say about it:

A Schwab spokesperson said its decision is consistent with the firm’s “long-standing approach” of only making available Schwab affiliate money-market mutual funds, while a Fidelity spokesperson said this is an extension of the company’s policy to “generally restrict” third-party money-market mutual funds.

The inflows to those new ETFs weren’t even that big, making this an interesting development:

Yet, the move stands out because trading platforms like Schwab and Fidelity typically don’t restrict exchange-traded funds, even if those funds are in competition with existing in-house offerings.

Indeed, I hope this doesn’t start a trend of more bans of competitor ETFs. Fidelity and Blackrock have worked very closely together in the past, so this is probably rather awkward.

For now, I still own lots of shares of iShares 0-3 Month Treasury Bond ETF (SGOV) and probably soon Vanguard 0-3 Month Treasury Bill ETF (VBIL). Fidelity and Schwab haven’t banned those, yet. Of course, Vanguard continues to not play funny games with their money market sweep funds. C’mon Vanguard, time for your own money market ETF to create even more tension…

I know that these brokers have to make their money somewhere, but they may have to become more transparent about it soon.

©

Related Posts

A portrait of Ukraine architecture firm Balbek Bureau founder Slava Balbek.A portrait of Ukraine architecture firm Balbek Bureau founder Slava Balbek.
Out Now! Our Sept/Oct 2022 Issue on...
The Ace Hotel is that rare Toronto building — that...
Read more
Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)
Director Benjamin Nicolas captures conflict through a...
...
Read more
Industrieel mini loft appartement van 35m2Industrieel mini loft appartement van 35m2
Industrieel mini loft appartement van 35m2
Dit kleine appartement gelegen in Budapest is ontworpen en ingericht...
Read more
Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)
Tankless Water Heater: 4 Tips on How...
A tankless water heater is a highly efficient appliance that...
Read more
Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)
HIPGNOSIS.BREATHE. Album Cover Art und Photo Design...
HIPGNOSIS.BREATHE. Album Cover Art und Photo Design by Aubrey Powell...
Read more
Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)Fidelity, Schwab Won’t Let You Trade Money Market ETFs (That Aren’t Theirs)
Style & Fashion Drawings: What I Was...
The post Style & Fashion Drawings: What I Was Wearing...
Read more