There are plenty of advantages when it comes to investing in ETFs, but one of the biggest drawbacks is transaction fees, which you must pay each time you buy or sell the funds. This is especially problematic if you plan on regularly contributing. But ETF investors are in luck, reports the Wall Street Journal, because more brokerage firms are offering low-cost and even free ETF trades. The highlights: Discount broker SogoTrade charges $1.50 per online ETF trade with a $10 monthly subscription fee, or a $3 trade with no additional fee on up to 5,000 shares; TradeKing charges trades of any size at $4.95 each; and Zecco offers 10 free online ETF trades per month if you maintain a $2,500 minimum account balance.
In light of Pimco's move into exchange-traded funds, Jim Wiandt of IndexUniverse predicts that more firms outside the traditional index world will make a significant move into ETFs. "Up until now, those who have said that ETFs are going to take over the world have been on the radical fringe, but Pimco's announcement seems to be a step in that direction," he writes.