FactorShares ETFs In Free-Trading Program

March 02, 2011

FactorShares’ new spread ETFs join the commission-free trading revolution.

Investors can now trade FactorShares’ five new spread ETFs free of charge on Interactive Brokers’ platform, the latest addition to a growing group of U.S. discount brokerages and ETF companies offering commission-free trades.

“Factor believes that Interactive Brokers will help to place the FactorShares spread ETFs in front of their savvy brokerage clients, alerting them to this new approach to alternative ETF investing,” Karlheinz Muhr, chairman of Factor Advisors, said today in a prepared statement from the two companies. Muhr noted investors won’t have a minimum holding period requirement to keep their trades free.

Commission-free trading is a growing marketing hook in the competitive U.S. ETF industry. Over 100 ETFs are currently available commission free at TD Ameritrade. Also, iShares has partnered with Fidelity to offer 30 if its ETFs commission free; Vanguard and Schwab ETFs are commission free for their respective clients; and, if rumors are true, Scottrade will offer free trading on FocusShares ETFs too.

New York-based FactorShares on Feb. 24 launched the first-of-its-kind lineup of spread ETFs that allow investors to simultaneously hold long and short positions in different securities. The ETFs offer double exposure to underlying indexes on both sides of the trade.

The ETFs give investors access to several broad asset classes by creating exposure to the S&P 500 Index, U.S. Treasury bonds, gold, oil and the dollar. While the ETFs are designed for sophisticated investors, they genuinely create new options in sideways markets and shifting risk premiums, as we wrote about a year ago when FactorShares filed to market the funds.

The five ETFs are:

  • FactorShares 2X: S&P500 Bull/TBond Bear (NYSEArca: FSE)
  • FactorShares 2X: TBond Bull/S&P500 Bear (NYSEArca: FSA)
  • FactorShares 2X: S&P500 Bull/USD Bear (NYSEArca: FSU)
  • FactorShares 2X: Oil Bull/S&P500 Bear (NYSEArca: FOL)
  • FactorShares 2X: Gold Bull/S&P500 Bear (NYSEArca: FSG)


The new funds have an annual management fee of 0.75 percent, though total expense ratios of the various funds could be between 1.10 percent and 1.20 percent, FactorShares Chief Executive Officer and co-founder Stuart Rosenthal told IndexUniverse.com in a telephone interview last week.



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