Vanguard Introduces Commission-Free ETF Trading

ETFs are low cost index funds that trade like stocks. There are also a few active ETFs not benchmarked to indexes, but the bulk of assets are invested in index linked ETFs.

For ETF investors, commission free trades are a huge plus.

Even though ETFs on average have lower annual expenses compared to mutual funds, ETF trading costs reduced those advantages. Now, with three major brokerage platforms offering commission free ETF trades, the trading cost barriers have been all but removed.

Strategies like dollar cost averaging using ETFs will now become a viable option.

It's likely commission free ETF trading will force other ETF providers to partner with brokerage firms to avoid losing ground.

At the end of April, Vanguard managed $108.82 billion in ETF assets making it the third largest U.S. ETF provider in terms of assets under management.