The emergence of free online trading could have a huge impact on the exchange-traded fund industry.
A few weeks ago,
Zecco Holdings announced it was launching zero-commission online
This could be a major boon for ETFs, because while they're constantly praised for their low annual expenses, transparency, tax efficiency and flexibility, investors have had to pay commissions to buy and sell them. This has alienated a large pool of people, particularly those who prefer to invest in small, regular increments and would get slammed paying $10 a pop in commissions.
"The commission costs were the last major wall separating ETFs and index funds," says Matthew Hougan, editor of indexing industry Web site