Fidelity Investments plans to charge investors a $100 service fee on exchange-traded funds purchased from nine firms that don’t have maintenance arrangements with the financial services giant, a spokesman confirmed.
Fidelity plans to put the fees into effect on June 3, according to a CityWire report, which is based on a Bloomberg story that Fidelity has confirmed. The charge covers costs associated with listing the ETFs on Fidelity’s platform, according to the reports.
The list of affected firms — Adaptive, AXS Investments, Cambiar, Day Hagan, Rayliant, Regents Park, Running Oak, Simplify Asset Management and Sterling Capital — could change, CityWire reported.
FAQs
Agreement: Fidelity will start charging up to 15% of all ETF revenue to issuers. Otherwise, retail investors pay $100 per trade… Despite the prevalence of revenue-sharing arrangements, some ETF providers were still surprised by Fidelity's move.
How much does Fidelity charge for ETF trades? ›
$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. Sell orders are subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal).
What is a reasonable ETF management fee? ›
High fees can turn any investment into a poor one. A good rule of thumb is to not invest in any fund with an expense ratio higher than 1% since many ETFs have expense ratios that are much lower.
Did Fidelity add surcharge to ETF platform? ›
Fidelity, which manages $69.1 billion in 67 exchange-traded funds, recently disclosed plans to introduce the $100 surcharge. It issued a memo March 28 to nine ETF issuers that had not yet agreed to the new fee arrangements.
Are all ETFs commission free on Fidelity? ›
Free commission offer applies to online purchase of ETFs in a Fidelity retail account. The sale of ETFs is subject to an activity assessment fee (from $0.01 to $0.03 per $1,000 of principal). ETFs are subject to market fluctuation and the risks of their underlying investments.
How does Fidelity make money if they don t charge fees? ›
So, with the favorable low or no-fee structure, how does Fidelity make money? Fidelity makes money from you via: Interest on cash: Fidelity makes money from the difference between what it pays you on your idle cash or through money market mutual funds and what it earns from the cash balances.
What is the new ETF service charge for Fidelity? ›
That'll Be $100
The new fee applies to firms that don't participate in a maintenance arrangement with Fidelity. For context, investment firms typically pay Fidelity a fee for operational support when listing products on its online platform.
Does Fidelity charge fees for buying Vanguard ETFs? ›
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.
Are Fidelity ETFs worth it? ›
ETFs can offer lower operating costs than traditional open-end funds, flexible trading, greater transparency, and better tax efficiency in taxable accounts. As with all investment choices there are elements to review when making an investment decision.
What is the average fee for an actively managed ETF? ›
Expense ratios can range from as low as 0.03% for some passively managed ETFs to over 1% for actively managed or specialized ETFs. Factoring in 0.5% to 0.75% for actively managed fees is considered to be around the average.
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.
What is considered low fee ETF? ›
The 10 Best Low Cost ETFs by Expense Ratio and AUM
| Ticker | Fund | Expense Ratio |
|---|
| VOO | Vanguard S&P 500 ETF | 0.03% |
| BND | Vanguard Total Bond Market ETF | 0.03% |
| AGG | iShares Core U.S. Aggregate Bond ETF | 0.03% |
| ITOT | iShares Core S&P U.S. Total Stock Market ETF | 0.03% |
6 more rowsThere is no fee to use the EFT service, although your financial institution may charge transaction fees. There may be a four-day period after Fidelity processes your request to establish EFT, during which the service will be unavailable to transfer funds to or from your bank account.
Does Fidelity charge fees for iShares ETFs? ›
Free commission offer applies to online purchases of select iShares ETFs in a Fidelity brokerage account.
Can you trade ETFs with Fidelity? ›
Trading made simple: How to trade stocks and ETFs
Get familiar with trading at Fidelity. Watch just how easy it is to place a stock and ETF trade with tips on how to choose an order type and order duration. Check out additional resources: Step-by-step guide with 6 simple steps.
Is there a fee for EFT Fidelity? ›
Fidelity doesn't charge a fee for sending or receiving EFTs, but the receiving bank may charge a fee. Fidelity also doesn't charge fees to process wire transfers to a bank or other recipient.
