In addition to their new $7.95 per trade price structure, Fidelity is also waiving commissions completely for 25 iShares ETFs. This appears to be a partnership where iShares partially compensates Fidelity themselves for promoting their ETFs.
Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with a marketing program that includes promotion of iShares ETFs and certain commission waivers. Additional information about the sources, amounts, and terms of compensation is described in the ETF’s prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice.
Technically, you could make a relatively complete passive portfolio consisting entirely of these iShares ETFs. For example, if you wanted a stock portfolio encompassing the entire world in proportion to their current market capitalization share, you could go with
45% IWV (Broad United States)
40% EFA (Broad Developed Europe & Pacific)
15% EEM (Emerging Markets)
Since these ETFs have pretty good trading volume, the bid-ask spreads should also be reasonably small. For the bond portion, one possibility would be
50% AGG (Broad, Investment Grade Taxable US Bonds) and
50% TIP (US Treasury Inflation-Protected Bonds)
assuming you had room in a tax-advantaged account like an IRA. Not a recommendation, just what I might buy for myself. Here’s the entire list:
US Equity
Russell 1000 Growth (IWF)
Russell 1000 (IWB)
Russell 1000 Value (IWD)
Russell 2000 Growth (IWO)
Russell 2000 (IWM)
Russell 2000 Value (IWN)
Russell 3000 (IWV)
S&P 500 Growth (IVW)
S&P 500 (IVV)
S&P 500 Value (IVE)
S&P Mid Cap 400 Growth (IJK)
S&P Mid Cap 400 (IJH)
S&P Mid Cap 400 Value (IJJ)
S&P Small Cap 600 Growth (IJT)
S&P Small Cap 600 (IJR)
S&P Small Cap 600 Value (IJS)
International Equity
MSCI ACWI (ACWI)
MSCI EAFE (EFA)
MSCI EAFE Small Cap (SCZ)
MSCI Emerging Markets (EEM)
Bonds
Barclays Aggregate (AGG)
Barclays TIPS (TIP)
iBoxx $ Investment Grade Corporate (LQD)
JP Morgan USD Emerging Markets (EMB)
S&P National AMT-Free Municipal (MUB)
Read more about Fidelity Offers Free Commissions on iShares ETFs, Make Your Own Free Portfolio…
