Vanguard Introduces Commission-Free ETFs

Vanguard has joined Fidelity and Schwab in offering commission-free ETFs.

Vanguard brokerage clients may make commission-free transactions in Vanguard’s entire line-up of 46 low-cost ETFs. In addition, most Vanguard brokerage clients will pay $7 or $2 to trade stocks and non-Vanguard ETFs.

The same commissions will apply to transactions conducted on the firm’s website or with the help of a Vanguard broker.

Vanguard offers 46 ETFs that seek to track an array of domestic and international stock benchmarks, as well as broad and discrete segments of the domestic bond market. The average expense ratio of Vanguard ETFs is 0.18%, compared with the industry average of 0.52%.

Vanguard is the industry leader in ETF net cash flow this year, with an estimated $11.7 billion through April 29, 2010, according to Bloomberg data. The firm’s ETF assets have more than doubled over the past year and now total more than $100 billion. Some of the largest ETFs are part of the Vanguard line-up including the $15 billion Vanguard Total Stock Market ETF (VTI), the $24 billion Vanguard Emerging Markets ETF (VWO), and the $7 billion Vanguard Total Bond Market ETF (BND).

For more ETF investing choices, see the list of Vanguard ETFs.