Commission-free ETFs, here at last!

Take advantage of the new commission-free ETFs



From the November 2011 issue of the magazine.


Exchange-traded funds have been a huge boon for Canadian index investors. They generally have much lower management fees than index mutual funds, and they offer far more variety. But they have always had an Achilles heel: because you buy and sell ETFs on a stock exchange, you pay trading commissions (usually $10 or more) that can quickly wipe out their advantages. Until now, that is. In September, Scotia iTrade became the first Canadian online brokerage to offer a menu of ETFs that investors can buy and sell for free.

Not all ETFs qualify for the zero-commission deal. Most of the 46 funds on the list are from Claymore Investments, although a few iShares and Horizons products are also included. Any investor will be able to build a well-diversified portfolio of Canadian and international equities, bonds, real estate and commodities from this list.

The announcement could also prompt other discount brokerages to follow suit. Qtrade Investor looks to be the first to compete: “We expect to have an offer that meets or beats the Scotia offer,” says vice president Joel Bernard.

4 comments on “Commission-free ETFs, here at last!

  1. Could you suggest or create a couch potato portfolio with the commission free ETFs offered through Qtrade investor?


  2. @Hanns: Unfortunately the lineup of commission-free ETFs does not include many core ETFs: most are narrow sector funds. However, it would be possible to build a well diversified portfolio using Claymore's CLF and CBO for bonds, HXT and XMD for Canadian equities, HXS for US equities, and CIE for international equities.


  3. would you recommend using this strategy for setting up an RESP using scotia itrade commission free etf's?


  4. I was listening to Yorba TV which is American (canada could be differnt) but he said not only is low commision important but also the fill & some brockerage firms do is what is called just "bill & fill" & the orders are not getting filled @ the best possible prices. There making huge money on bid /ask spreads. Is that posssible in Canada ?

    In the United States a retail investor can now become a member of Nadex for 100 dollars. So the middle man is gone & no commision is paid, with no bid ask spreads. Just have to pay the exchange fee which is something like 90 cents to 25 cents a trade. Those that are American citizens could use it & in the future it might be available to Canadians.


Leave a comment

Your email address will not be published. Required fields are marked *