This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Fidelity Shakes Up ETF Game

Fidelity on Tuesday announced it would offer free trades on 25 iShares exchange-traded funds in a partnership with BlackRock (BLK). The move will help the mutual fund giant cultivate a stickier customer base and stay relevant in the exploding age of ETFs.

While I recently noted that a departing Fidelity executive hinted at proprietary funds ( Fidelity Hints It May Get Into ETFs), today's announcement is a major milestone for the Boston behemoth.

The 25 funds are a predictable bunch, including big-name index brands that could be mistaken for mutual funds at first glance. BlackRock acquired iShares in June.

The iShares Russell 1000 (IWB) , iShares S&P 500 (IVV) and iShares S&P Growth (IVW) will all offer Fidelity traders inexpensive exposure to well-known indices.

Not to be boring, Fidelity will also offer access to other heavily traded ETFs. Also available commission-free will be the iShares MSCI Emerging Markets (EEM), iShares TIPs (TIP) and the iShares iBoxx Investment Grade Corporate Debt (LQD) ETFs.

Too Little, Too Late?

Fidelity's announcement may be an admission of missed opportunities in the ETF space. Vanguard, a competitor in the mutual fund space, has already transformed the ETF industry with low-cost iShares knock-offs.

While Vanguard's most popular funds may not be examples of original thinking, they have shattered the mold in an industry where first-mover status is king. The Vanguard Emerging Markets Stock ETF (VWO), which goes head-to-head with iShares' EEM, raked in $1.2 billion in 2009, according to data from the National Stock Exchange. EEM, which was introduced earlier, netted $941 million.

The first lesson Fidelity must learn is that ETF investors are a discerning bunch. If they are presented with an identical product at a lower price point, they know how to bargain-hunt.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,243.60 -36.14 -0.21%
S&P 500 2,002.99 -7.41 -0.37%
NASDAQ 4,553.8940 -25.8950 -0.57%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs