In early 2025, E-Trade launched a series of five No-Fee index mutual funds, becoming the second leading online broker to offer non-cost funds, following fidelity investments. This is good news for electronic trade investors, and the move places even more pressure on mutual funds and ETF costs. Both have seen fee declines for decades.
But how do these new e-trade index funds compare to those offered by major rivals like Fidelity? Quite in the end.
Overview of E-Trade’s No-Fee Fund
e-tradeThe new lineup of mutual funds is a solid entry, but investors need to know a few things as they compare index funds to their major rivals. Faithful.
First, mutual funds do not charge administrative fees – meaning Expense rate These funds are zero. The cost ratio is the fees a company charges as a percentage of investments in a fund. These electronic trade funds allow these fees to be avoided entirely.
E-Trade offers five unpublished mutual funds:
- e-trade no hee light large cap Index Fund (ETLGX)
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The fund tracks 500 large US companies and is effectively the same as the S&P 500 index fund, but is not called itself to avoid the costs associated with its branding.
- e-trade no hee total Market Index Fund (ETTOX)
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The fund tracks 3,000 large companies in the US stock market, effectively the same as the Russell 3000 Stock Index.
- e-trade no hee International Index Fund (ETISX)
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The fund tracks key stocks in developed markets except the US, ensuring investors are exposed to global stocks.
- e-trade no hee hee cunicipal bond index Fund (etmux)
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The fund invests in highly valued municipal bonds that provide tax-free benefits to investors.
- e-trade no hee us bond index Fund (ETBOX)
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The fund tracks the Bloomberg US government credit bond index and provides broad exposure to the bond market.
These funds, like Fidelity’s No-Fee funds, are only available to e-Trade customers and cannot be purchased from other brokers. In fact, if you purchase them through electronic trade (or fidelity) and decide to transfer your account later, you will not be able to receive funds from another brokerage. Therefore, these free funds of e-trade and fidelity encourage you to stay with that broker.
Fidelity’s No-Fee Fund Overview
Fidelity was the first to offer a fee-free index mutual fund that begins in 2018. Currently, brokers offer four things called Fidelity Zero Funds.
- Fidelity Zero Total Market Index Fund (FZROX)
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The fund offers a wide range of exposure to the stock market.
- Fidelity Zero International Index Fund (FZILX)
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This free fund offers global stock exposure.
- Fidelity Zero Expansion Market Index Fund (FZIPX)
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The fund provides exposure to small and intermediate stocks.
Therefore, e-trade and fidelity offer several similar funds, including the S&P 500 clone, the International Equity Fund, and the Total Market Equity Fund. In contrast to each other, e-trade offers a pair of bond funds, while Fidelity offers funds with exposure to small and medium-sized businesses.
Compare with Schwab’s low-cost funding
Where are the securities companies? Charles Schwab With all of these? So far, Schwab has many low-cost funds, but only E-Trade and Fidelity offer No-Fee index mutual funds.
For example, the Schwab S&P 500 index fund (SWPPX) is Best S&P 500 Index Funds And they still charge an expense ratio of 0.02%, which is still incredibly low. In reality, that means that investors pay $2 per year for every $10,000 invested in the fund. So, its cheap fund puts Schwab in one of its free, low-cost index funds, but not at a free rock bottom price.
Mutual fund fees continue to fall sharply
The emergence of paid funds from electronic trade and fidelity is welcome news for investors, allowing them to invest in diversified funds at net cost. This funding is the next logical step in mutual fund fees that have been declining for decades as low-cost arrivals. Funds (ETFs) traded on exchanges While providing similar investment returns, investors have made it possible to trade them during normal market hours.
For years, investors have benefited from lower fund fees. That means that much of your return on investment is more than ever in your pocket. Fund companies may not find positive developments, but it is difficult to see them as anything other than profits for long-term investors.
– Brian Baker, CFA, Bankrate Senior Investing Reporter
Even if you’re not choosing an unpaid fund, it’s important to be aware of the fees. Many mutual funds charge Expensive sales load And a high cost ratio. Both can cost you a lot over time. Also, paying a high fee makes little sense if many of the funds from e-Trade, Fidelity and Schwab above track the same important index, such as the S&P 500 stock index, one of the best long-term investments.
“It’s not an exaggeration to say that investing in low-cost funds can save you literally tens of thousands of dollars over the lifespan of your investment,” Baker says.
Conclusion
Investors have benefited from reduced fund fees for years, and paid funds from electronic trade and fidelity can help investors literally bring their fees to zero. If there are downsides, you need to be a client of these brokers to take advantage of these no-cost funds.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. Furthermore, investors recommend that past investment products performance is not a guarantee of future price increases.