Earlier this month, Schwab (SCHW) launched a few ETFs that will allow its clients to trade commission free, creating a nice diversified vehicle for dollar cost averaging. The move may pressure other firms to offer commission free ETFs in the future, but so far it hasn’t happened.
Currently Schwab offers 4 ETFs and has plans to offer additional ETFs later this year. They are:
Schwab US Broad Market ETF (SCHB)
Schwab US Large Cap ETF (SCHX)
Schwab US Small Cap ETF (SCHA)
Schwab International Equity ETF (SCHF)
I don’t expect the 4 ETF’s to gain much popularity outside of Schwab because they are generic and compete with more liquid and established ETF’s, but it looks like they provide decent liquidity already with all of them trading an average of about 100K shares a day or more. They plan to add large cap growth, large cap value, international small cap and and an emerging market ETF in a few weeks. I think if they stick to more general ETF’s and don’t try to specialize too much, they’ll continue to do well with their ETFs. It’s a smart move from Schwab and appears to be paying off already.