Game Changer

[drew1cfp]

Some of you may remember how the mutual fund landscape changed when Charles Schwab announced its Mutual Fund Supermarket about 20 years ago. Prior to that one had to pay a commission, sometimes as high as 7%, to purchase a mutual fund. Moreover, one was forced to purchase the fund directly from the mutual fund family.

Schwab concocted the Mutual Fund Marketplace where one could purchase funds from different fund families without paying a front-end commission. Soon thereafter, other brokerage firms followed suit and created their own suite of mutual funds. Schwab however, remained the leader and this changed the way an investor could purchase a mutual fund.

Schwab has announced its new Schwab ETF OneSource marketplace. Initially, there are 105 ETFs in the marketplace with more to come. Indeed, TD AmeriTrade, Vanguard, Fidelity and a few other brokerage firms have commission-free ETFs. The major difference is that one may trade the Schwab ETFs without the restriction of a holding period. A trader can day trade these ETFs. This should be of extreme interest to users of the Bandit and EdgeRater software.

So what is the downside to the new Schwab ETF OneSource? For one thing you must have a Schwab account. Presently, there are no inverse or 2X or 3X beta funds. And shorting is not allowed.

Attached is an interesting back-test of these funds using EdgeRater; the end results are also applicable to the Bandit software. One requires Excel (2007 or greater) to filter the results of the back-test. In brevity, all seven Connors' ETF strategies work well with the new Schwab ETFs.

Drew

Schwab ETFs Back Test - 2005 to 2011.zip

(30.16 KiB) Downloaded 2430 times

[Chris White]

Thanks for this research Drew!

The ability to trade these ETFs commission free is a big bonus when using the ETF Trading Bandit strategies.

I've added the symbol list to the symbol lists topic in this forum so that anyone using ETF Trading Bandit or EdgeRater or EdgeClub can download.

Chris.