How much does Fidelity charge for ETF transactions?
$0.00 commission applies to online U.S. equity trades, exchange-traded funds (ETFs) and options (+ $ 0.65 per contract fee) in a Fidelity retail account only for Fidelity Brokerage Services LLC retail clients.
Brokerage houses may charge a commission for ETF trades just as they charge for any other market-traded security. These fees are typically around $20 per trade or less but they can add up over time if the investor trades ETFs often.
| Costs | ETF A | ETF B |
|---|---|---|
| Commission (online trades only) | $0 | $0 |
| Expense ratio | 0.20% ($20) | 0.15% ($15) |
| Bid/ask spread | 0.004% ($0.40) | 0.11% ($11) |
| Total cost (roundtrip cost after one year) | 0.204% ($20.40) | 0.26% ($26) |
Fidelity does not charge a transaction fee on any redemption of shares of a transaction-fee fund that were purchased with no load. A fund's own redemption fees may apply. You can buy shares in a transaction-fee fund from its principal underwriter or distributor without a Fidelity transaction fee.
Vanguard and Fidelity Fees
To trade stocks, ETFs, options and most mutual funds, clients of both firms will avoid commissions altogether. Options at Vanguard come with a $1 contract fee, while Fidelity charges an even lower $0.65 contract fee.
ETF fees are accrued daily, which means they are reflected in the daily price of an ETF; however, the fees are typically deducted from fund assets on a monthly basis. From the investor's perspective, ETF fees are not directly paid like a monthly bill. Instead, they are reflected in a fund's net return.
ETFs have lower costs on average than passively managed mutual funds and don't charge 12b-1 fees. The expense ratio is the cost of the mutual fund, including any management fees, fees for expenses, and 12b-1 fees, and expressed as a percentage of the total assets under management.
What Are ETF Fees? ETF fees are expenses passed on to the investor from the managing fund company. Like any typical business entity, an ETF company may incur a range of operational expenses, including management fees and marketing costs.
$0 trading commissions
Pay nothing to trade stocks, ETFs, and Vanguard mutual funds online.
The price-to-earnings (P/E) ratio of an ETF measures the collective price of an ETF's holdings relative to their respective earnings. A high P/E ratio indicates that the ETF is overvalued.
Does Fidelity charge commission on ETFs?
Commission-free trades
$0 commissions1 for online US stock, ETF, and option trades.
Escaping the Fidelity Recordkeeping Fee can be achieved through strategic actions such as closing the account, seeking fiduciary services, and considering alternatives to minimize financial obligations. Closing the account is a straightforward approach to avoid the fee entirely.
In most situations, you will find what you need at Fidelity. There are a few downsides. Fidelity does not offer cryptocurrency investing. The company is also missing some features found on other investment platforms, like futures trading and paper trading, where you can practice trading.
Fidelity® International Multifactor ETF. Provides exposure to a portfolio of international companies that score well across value, quality, low volatility, and momentum factors, and also have lower correlation to the US market.
Vanguard and Fidelity charge $0 commissions for online equity, options, and ETF trades for U.S.-based customers. Fidelity has a $0.65 per contract option fee; it's $1 at Vanguard. Fidelity will set you back more for broker-assisted stock trades ($32.95 versus Vanguard's $25.
But which is better for you ultimately depends on how you invest. Investors who prefer Vanguard's funds may be better off going that route, while Fidelity loyalists would be wise to open an account with Fidelity, as it offers inexpensive and free ways to invest in its own mutual funds and ETFs.
However, if you know that you'd like a bit more exposure to smaller and medium-sized companies or just want to invest in more stocks overall, VTI is your best bet. VOO, meanwhile, is the better option for investors who want to focus heavily on large cap companies.
For most individual investors, ETFs represent an ideal type of asset with which to build a diversified portfolio. In addition, ETFs tend to have much lower expense ratios compared to actively managed funds, can be more tax-efficient, and offer the option to immediately reinvest dividends.
| Ticker | Fund name | 5-year return |
|---|---|---|
| SMH | VanEck Semiconductor ETF | 35.02% |
| SOXX | iShares Semiconductor ETF | 30.70% |
| XLK | Technology Select Sector SPDR Fund | 24.57% |
| IYW | iShares U.S. Technology ETF | 24.09% |
For most investors, ETF trades take place with other investors, and not with the fund company itself. That means the fund company doesn't have to process your order; doesn't have to mail you the same documents; and doesn't have to go into the market to process your order. Less work = lower costs.
Why choose an ETF over a mutual fund?
ETFs have several advantages for investors considering this vehicle. The 4 most prominent advantages are trading flexibility, portfolio diversification and risk management, lower costs versus like mutual funds, and potential tax benefits.
Schwab offers $0 online commission per trade on over 2,000 U.S. exchange-listed ETFs.
Day trading ETFs is possible as there are various trading opportunities within the same business day due to market volatility. The ideal candidates for day trading are those with the highest trading volume, making them liquid and volatile.
| Fund (ticker) | YTD performance | 5-year performance |
|---|---|---|
| Vanguard S&P 500 ETF (VOO) | 10.4 percent | 15.0 percent |
| SPDR S&P 500 ETF Trust (SPY) | 10.4 percent | 15.0 percent |
| iShares Core S&P 500 ETF (IVV) | 10.4 percent | 15.0 percent |
| Invesco QQQ Trust (QQQ) | 8.6 percent | 20.7 percent |
Most ETF income is generated by the fund's underlying holdings. Typically, that means dividends from stocks or interest (coupons) from bonds. Dividends: These are a portion of the company's earnings paid out in cash or shares to stockholders on a per-share basis, sometimes to attract investors to buy the stock.
