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Can I Buy iShares ETFs on TD Ameritrade? Does TD Ameritrade Offer PowerShares ETFs Trading?


TD Ameritrade has a large selection of mutual funds and commission-free ETF's. Some of these products are iShares and PowerShares ETFs. Here's a rundown on what these funds will cost to trade at TD Ameritrade.

Can You Buy iShares ETFs on TD Ameritrade Account?

TD Ameritrade offers more than 340 iShares ETFs on its platform, 56 of which they allow you to trade commission-free in your account. Although these are free to trade, it’s important to note that TD Ameritrade may charge you a short-term trading fee of $13.90 for sales in any of the “free” ETFs that were not held for at least a full 30 days.

Most ETFs also have an expense ratio embedded in their NAV. For iShares ETFs, this expense ratio varies from just 0.02% to as much as 0.92%. The higher expense ratios generally correspond to ETF strategies that are harder to implement, such as emerging markets equities and debt, as these markets are not as liquid or as easily accessible as most developed financial markets.

The 343 iShares ETFs offered through the TD Ameritrade platform cover everything from domestic and international equities and bonds to commodities and real estate. You can choose ETFs that give a broad, diversified exposure to these categories or if you have more specific views on the market that you want to reflect in your portfolio you can choose an ETF that drills into a more focused area of these groups, such as small-cap stocks in India, Consumer Goods stocks in the U.S., or long duration government bonds.

Can I Buy iShares ETFs on TD Ameritrade

One of the most popular iShares ETFs with investors is the iShares Core MSCI Emerging Markets ETF (IEMG), which has close to $45billion invested in it and offers diversified exposure to emerging market stocks by investing in equities that represent the membership of the MSCI Emerging Markets Investable Index. The expense ratio is also fairly attractive for an emerging markets ETF at just 0.14%, especially compared to the ETF’s popular and very similar iShares cousin, the iShares MSCI Emerging Markets ETF (EEM), which charges 0.69%.

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Can You Buy PowerShares ETFs on TD Ameritrade Account?

TD Ameritrade currently offers 251 PowerShares ETFs on its platform, 27 of which they allow you to trade commission-free in your account. Note that these “free” ETFs are also subject to TD Ameritrade’s short-term trading fee as described earlier.

Just as with iShares ETFs, most of the expense ratios on the PowerShares ETFs range from 0.04% to 1.00%, with a few exceptions that are north of 2%, such as the KBW High Dividend Yield Financial ETF (KBWD) and CEF Income Composite ETF (PCEF).

Can I Buy PowerShares ETFs on TD Ameritrade

The PowerShares ETF universe offers investors very similar coverage and flexibility as iShares, with offerings in all of the major asset areas: domestic and international equities and bonds, commodities, and real estate. They also offer many of the more targeted, niche strategies that allow you to bet on certain sectors, countries, and other attributes of public companies, such as size and valuations relative to the rest of the market, such as the DWA Developed Markets Momentum ETF (PIZ), which focuses on foreign large growth-oriented companies.

In addition to these plays/strategies, PowerShares offers some ETFs that employ interesting strategies using derivatives to achieve a specific objective, such as the S&P 500 BuyWrite ETF (PBP). This ETF invests at least 90% of its assets in securities that represent the S&P 500 index, and then simultaneously write/sell near-term covered calls on the S&P 500 with a strike price just above the index. This so-called “Buy/Write” strategy allows the investor to capture most of the S&P 500’s upside while also offering some downside protection as well from the proceeds on the covered calls.

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iShares and PowerShares ETFs on TD Ameritrade Recap

In summary, both iShares and PowerShares offer a wide variety of ETFs that cover all the most common ETF strategies as well as some niche investment areas. When comparing two similar ETFs from each of these managers, the differentiating factors you should pay attention to their expense ratios, small differences in their holdings (or the indices they track), and the ETFs’ liquidity and total net assets.

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