Schwab Commission-Free ETF List Review (Updated 2019)

ETFs are surpassing mutual funds as the standard building blocks of stock and bond portfolios. Here’s a closer look at the latest updates to the Charles Schwab commission-free ETF list. While the commercials often focus on quantity instead of quality, I will do the opposite. Here are the factors that I think are important:

• Total Assets. This is a measure of popularity and reputation. A more popular ETF will have a smaller bid/ask spread and won’t have to liquidate in a bear market. A more reputably ETF manager will have lower index tracking error. However, ETF size isn’t everything.
• Index/Asset Class. What index does it track? Does that index cover an asset class that I want to include??
• Cost. What is the expense ratio? Low costs are important.

Schwab Commission-Free ETF full list. This Schwab ETF OneSource page includes a full list of their 503 commission-free ETFs.

Brief history of changes. In early February 2019, Schwab announced that it would increase the number of commission-free ETFs on their list to 503 as of March 1st, 2019, including no early redemption fees (no minimum holding period). Here is the list of 246 added ETFs, including 90 iShares ETFs.

Schwab’s ETF OneSource started in February 2013 with 103 commission-free ETFs including many in-house ETFs. Schwab has become very competitive with Vanguard and iShares by developing their own brand of low-cost, index ETFs. Outside providers now include: Aberdeen Standard Investments, ALPS Advisors, DWS Group, Direxion, Global X ETFs, IndexIQ, Invesco, iShares ETFs, John Hancock Investments, J.P. Morgan Asset Management, OppenheimerFunds, PIMCO, State Street Global Advisors SPDR® ETFs, USCF, WisdomTree and Charles Schwab Investment Management.

In March 2017, Schwab dropped their standard stock commission to $4.95 per trade + $0.65 per options contract. In addition, expenses for the Schwab market cap-weighted index mutual funds were lowered to match their Schwab ETF equivalents. Schwab Index mutual funds now have no investment minimum.

Largest ETFs on Schwab Commission-Free ETF list. Here are the top 20 most popular ETFs on their list, sorted by largest total assets. Also listed are the asset class and expense ratios.

Lowest Expense Ratio ETFs on Schwab Commission-Free ETF list. Here are the top 20 cheapest ETFs on their list, sorted by lowest expense ratio.

Commentary. Overall, Schwab’s OneSource ETF list does include a good mix of Schwab ETFs with good management, low costs, and low bid/ask spreads. There are also a few good iShares and SPDR ETFs that could be potential ETF pairs for tax-loss harvesting. A DIY investor should find it easy create a diversified portfolio of ETFs according to their desired asset allocation, if you know what you are looking for. With 500+ ETFs, many will be short-lived duds, while still others are ETFs that track a very similar index but are much more expensive than the competition.