UPDATE 2-Schwab unveils no-fee platform for exchange-traded funds

Thu Feb 7, 2013 2:50pm EST
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By Jed Horowitz and John McCrank

NEW YORK Feb 7 (Reuters) - Charles Schwab Corp is waiving transaction fees on exchange-traded funds, the online brokerage said on Thursday, applying the formula it used to sell mutual funds to the masses to increasingly popular ETFs.

Schwab ended 2012 with $223.2 billion of client money in its OneSource no-fee mutual fund platform, which includes over 4,000 funds. The San Francisco-based company said that after months of negotiating with providers, it was launching a similar platform for ETF products. There will be 105 ETFs on the new commission-free platform, called Schwab ETF OneSource.

ETFs, unlike mutual funds, are listed on exchanges and can be traded throughout the day. Mutual funds are valued once a day after the stock market closes.

The offerings will span major asset classes, highlighting six providers: State Street SPDR ETFs, Guggenheim Investments, PowerShares, ETF Securities, United States Commodity Funds, and Schwab's own investment management arm, the company said.

The program extends the "very aggressive pricing strategy" introduced last year when the firm unveiled Schwab-sponsored ETFs at no commission, Chief Executive Walt Bettinger said in a presentation to analysts on Thursday.

$150 BILLION CATEGORY   Continued...