Global X jumps into the commission-free ETF trading game in a deal with Interactive Brokers.
Interactive Brokers is offering free trades on exchange-traded funds sponsored by New York-based Global X, a darling of the ETF world that now has 29 niche funds, most of them focused on emerging markets and on commodities. Terms of the agreement weren’t disclosed.
The free-trading offer is the latest sign of competition in the rapidly growing world of ETFs. The most conspicuous price battle is between Vanguard, the No. 3 U.S. ETF firm, and discount broker Schwab; with both firms offering free trades to clients trading their respective proprietary ETFs. Additionally, Scottrade is offering free trades on a new lineup of 15 equity funds it rolled out in March.
Interactive Brokers and its affiliates execute almost 1 million trades per day on a variety of electronic products, among them stocks, options, futures, foreign exchange and bonds, according to the company’s website. The company’s mission is to create technology and provide liquidity on better terms. On its website, it explicitly says it competes on price and speed.
Global X has gathered almost $1.7 billion in assets since rolling out its first ETF in February 2009. The assets are spread around its different funds. For example, the Global X Lithium ETF (NYSEArca: LIT) has $177 million in assets, the Global X China Consumer ETF (NYSEArca: CHIQ) has almost $200 million and its first fund, the Global X/InterBolsa FTSE Colombia 20 ETF (NYSEArca: GXG), has $156 million.
Also, in what appears to be an ETF-industry first, the company rolled out the Global X Food ETF (NYSEArca: EATX), and announced it would donate profits once the fund is in the black to Action Against Hunger/ACF International, a global humanitarian organization.