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DailyFinance Catches up on the ETF Wars

03/22/10 by  
Filed under Bourbon & Bayonets

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Several weeks ago, Invest with an Edge brought you coverage over the escalating Commission Wars over ETFs being waged by two discount brokerage behemoths, Fidelity and Schwab.   It appears that other media outlets are starting to consider the possible far reaching impacts of a struggle between these two.  What are the benefits to Schwab and Fidelity’s announcements?  What do investor’s need to be wary of?  What might be on the horizon?

DailyFinance and Sheryl Nance-Nash tackled some of these burning questions and more in a recent article, “Do Free ETFs Have a Hidden Price Tag?”  In bringing her piece to press, Sheryl relied on the expertise of one of our featured contributors, Brian Campos, who is the Director of Capital Cities Asset Management, our investment advisory affiliate.

Excerpts below impress upon the investing public that they should sit up and take note of what dominoes are falling around them.  I’m positive we’ll be hearing more about this subject in the coming months.

“As the two heavyweights battle it out in their never-ending quest for more assets to join their platform, Joe Q. Public gets an initial trading reduction. However, the underlying benefit is access, explains Brian Campos, director of wealth management at Capital Cities Asset Management. “ETFs enjoy several major benefits over mutual funds, and now investors won’t be hindered by trading costs to join the ETF universe,” he adds.

He goes on to address some of the possible disadvantages that investors must be aware of:

“This can be a drawback for investors who desire more specialized investments such as country/region specific portfolios, sector portfolios or special asset portfolios,” points out Campos. Fidelity has yet to include iShares’ other funds in their new offering. “Schwab’s’ offering is even more incomplete as they offer no fixed income portfolios and few differences in capitalization and style portfolios,” he adds

For this and more insights about the ETF price wars, here’s the entire article.

Ron Rowland
Invest With An Edge

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