Exchange-traded funds (ETFs) are an easy way to start investing with a diversified portfolio...if you can avoid paying a trading fee every time you buy shares. Here we found 20 of the best commission-free ETFs available at several large investment companies.

Exchange-traded funds (ETFs) are an excellent investment option for an investor who wants to create a well-diversified portfolio. Choosing individual stocks and bonds is not only time consuming – it’s expensive. ETFs, like mutual funds, combine assets into a pool to construct a specific investment objective, usually to track a particular market index.

Unlike mutual funds, however, ETFs trade like common stock. They’re bought and sold on a stock exchange. That means you don’t need $2,000 or $3,000 — the minimum required balance for many mutual funds — to buy a diversified bundle of investments.

The downside to ETFs, however, is that you typically must pay a trade commission every time you buy or sell shares.

An investor with a well-diversified ETF portfolio may own eight or more ETFs. That’s small potatoes compared to the number of investment vehicles you’d need to diversify with individual stocks or bonds; even so, the commissions paid to buy those ETFs can add up, particularly for those who systematically purchase shares over time (like at each pay check) or those who rebalance their portfolios periodically.

Commission-free ETFs

The good news is that there are hundreds of commission-free ETFs available on a number of platforms including Vanguard, Fidelity, TD Ameritrade. These commission-free ETFs are excellent options for investors who want to invest a little bit each week, month, or quarter.

Most investment companies allow for free trades if done within their own platform. If you’re a Vanguard client, you most likely won’t pay to trade Vanguard ETFs, for example. To be considered commission-free for the purposes of this round-up, ETFs must be available commission-free on at least two different platforms.

What else makes for an attractive ETF? In a word: fees. The primary investment objective of most ETFs is to track an index, which means it’s not seeking to beat the market or reduce risk. An ETF’s goal is simple: to trade when changes are made to the tracked index.

Of course, before you purchase any ETFs, you should figure out the asset allocation strategy you want to follow.

I like the model portfolios available from the American Association of Individual Investors (AAII), which are broken out for aggressive, moderate, or conservative investors. In fact, I considered the categories from their model portfolios to identify the best commission-free ETFs for new investors, with a few changes. I grouped fixed income and international holdings into one category each.

I also considered adding an additional category for aggressive investors: alternatives/commodities/real estate, but no ETFs met my criteria.

Large-Cap Stock ETFs

FundSymbolInfoCostsWhere It’s Free
iShares Core S&P 500 ETFIVVIVV tracks the S&P 500 Index, a benchmark of the 500 largest firms in the US. The S&P 500 is one of the world’s best-known and most widely followed stock indexes.0.07%E*TRADE


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Vanguard Growth ETFVUGVUG tracks the MSCI US Prime Market Growth Index, comprised predominantly of growth stocks of large US companies.0.09%E*TRADE


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Vanguard Value ETFVTVVTV tracks the MSCI US Prime Value Market Index, comprised of large-cap value-oriented stocks, predominantly of US companies.0.09%E*TRADE


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Mid-Cap Stock ETFs

FundSymbolInfoCostsWhere It’s Free
Vanguard Mid-Cap VOVO tracks the CRSP US Mid Cap Index, which represents the universe of medium-sized companies within the US equity market. 0.09%E*TRADE


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Vanguard Mid-Cap Growth ETF VOTVOT tracks the MSCI US Mid Cap Growth Index, which represents the universe of medium-sized growth companies in the US equity market. 0.09%E*TRADE


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Vanguard Mid-Cap Value ETF VOEVOE tracks the CRSP US Mid Cap Value Index, which represents the universe of medium-sized value companies within the US equity market. 0.09%E*TRADE


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iShares Core S&P Mid-Cap ETF IJHIJH tracks the S&P MidCap 400 Index, which measures the performance of 400 medium-sized companies within the US equity market. 0.15%E*TRADE


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Small-Cap Stock ETFs

FundSymbolInfoCostsWhere It’s Free
Vanguard Small-Cap ETF VBVB tracks the CRSP US Small Cap Index, which measures the performance of small-sized companies within the US equity market. 0.09%Vanguard


TD Ameritrade
Vanguard Small-Cap Value ETF VBRVBK tracks the MSCI US Small Cap Value Index, which measures the performance of small-sized value companies within the US equity market. 0.09% Fidelity


Vanguard


TD Ameritrade
iShares Core S&P Small-Cap ETF IJRIJR tracks the S&P SmallCap 600 Index, which measures the performance of small-sized companies within the US equity market. 0.17%Firstrade


TD Ameritrade
Vanguard Small-Cap Growth ETF VBKVBK tracks the MSCI US Small Cap Growth Index, which measures the performance of small-sized growth companies within the US equity market. 0.09% Fidelity


Vanguard


TD Ameritrade

International Stock ETFs

FundSymbolInfoCostsWhere It’s Free
Vanguard Europe Pacific ETF VEAVEA tracks the MSCI EAFE Index, which measures the performance of equity markets within the European, Australasian, and Far Eastern markets. 0.09%E*TRADE


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You Invest by J.P. Morgan
Vanguard FTSE All World Ex US ETF VEUVEU tracks the FTSE All-World ex US Index, which includes approximately 2,000 stocks from 46 countries around the world. Stocks from currently emerging markets account for 13 percent of its holdings. 0.15%E*TRADE


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You Invest by J.P. Morgan
Vanguard FTSE All World Ex-US Small Cap ETF VSSVSS tracks the FTSE Global Small Cap ex US Index, which includes approximately 3,300 stocks from 46 countries around the world. Stocks from currently emerging markets account for 12 percent of its holdings. 0.19%E*TRADE


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You Invest by J.P. Morgan
Vanguard Emerging Markets ETF VWOVSS tracks the FTSE Emerging Index, which includes large- and medium-sized companies from nations with emerging markets. 0.15%E*TRADE


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You Invest by J.P. Morgan

Fixed Income ETFs

FundSymbolInfoCostsWhere It’s Free
iShares Core Total U.S. Bond Market ETF AGGAGG tracks the Barclays Capital U.S. Aggregate Bond Index, which measures the performance of the US investment-grade market. 0.08%E*TRADE


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Vanguard Total Bond Market ETF BNDBND tracks the Barclays Capital U.S. Aggregate Bond Index, which measures the performance of the US investment-grade market. 0.08%E*TRADE


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Vanguard Short-Term Bond ETF BSVBSV tracks the Barclays US 1-5 Year Government/Credit Float Adjusted Index, which includes all medium- and larger-sized US government issues, investment-grade corporate bonds, and investment-grade dollar-denominated bonds that have a maturity length between one and five years. 0.10%E*TRADE


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Vanguard Intermediate-Term Bond ETF BIVBIV tracks the Barclays U.S. 5, which includes all publicly-issued medium- and larger-sized US government issues, investment-grade corporate bonds, and investment-grade international dollar-denominated bonds that have a maturity length between five and 10 years. 0.10%E*TRADE


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About our criteria

To make the list, ETFs must fit onto one of the categories, maintain a rock-bottom fee structure, and be available commission-free on more than one platform. Narrow categories like ETFs that invest in only one country or industry sector were excluded.

Portfolios available on more than two platforms were given preferential treatment in that they sometimes appear on a list, despite a higher fee structure than some of the other options. When this occurs, the less expensive option is also included. Thought was also given to whether the inclusion of a particular asset class could help round out a diversified portfolio, as with the addition of a small-cap or mid-cap investment option within the international category.

Final thoughts

If you’re thinking about setting up an account with a brokerage firm that will allow commission-free ETF trades within their product family, consider the following firms:

Each firm has a wide range of ETFs that will enable a smart investor to set up and maintain a well-diversified portfolio.

If you don’t want to make the trades yourself, consider an app like Stash, which lets you invest in a select number of ETFs and doesn’t charge you for individual trades.

Read more:

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About the author

Total Articles: 10
Alaina Tweddale is a Philadelphia-based freelance writer focusing on consumer finance and technology. Prior to going out on her own in 2013, Alaina worked for 15 years in the marketing departments of financial giants like Lincoln Financial Group, Delaware Investments, and Cendant Mortgage.

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1 comment
Becky Hembree says:

Fidelity Investments has MANY bad reviews. Comments?