Fidelity Increases Commission-Free ETFs to 31

Consumers everywhere agree – price wars are the best wars on the planet.  The ETF trading commission price war makes ETF investors happy and their wallets a little thicker.  Fidelity today (2/16/11) announced the addition of five more iShares ETFs to its $0 commission lineup.  This brings the total quantity of commission-free ETFs for Fidelity’s online customers to 31, consisting of Fidelity’s own Nasdaq Composite Tracking Stock (ONEQ) and 30 iShares products.

The complete list of iShares with free online trading at Fidelity now includes these ETFs:

• iShares iBoxx Yield Corporate Bond (HYG)
• iShares Dow Jones Select Dividend (DVY)
• iShares Dow Jones EPAC Select Dividend (IDV)
• iShares Dow Jones Real Estate (IYR)
• iShares MSCI ACWI ex US (ACWX)

Sixteen months ago, the first salvo in this war was yet to be fired.  Today four major players have a lot at stake.  The history is brief but eventful:

Schwab Creates Watershed Event with Commission-Free ETFs on 11/3/09 by launching its first ETFs and introducing commission-free trading.  Schwab has since extended its lineup several times.

Fidelity responded three months later on 2/2/10 by teaming up with iShares to offer 26 Commission-Free ETFs at Fidelity while lowering commissions on other ETFs.  Fidelity expanded its menu today.

Vanguard Entered the ETF Free Trading War three months later (5/4/10) by making its own line of ETFs available to Vanguard Brokerage customers without commissions.  Vanguard continues to aggressively launch new ETFs with no commissions for its brokerage customers.

The Launch of Ameritrade’s ETF Supermarket on 10/8/10 was the most sweeping to date, including eight different sponsors and 101 ETFs and ETNs.

Disclosure I am Long HYG shares.