Online brokerage Folio Investing is charging a fixed membership fee for exchange-traded funds in lieu of per-trade commissions.

While at least two other online brokerages recently announced that they are offering commission-free trading on limited groups of ETFs, Folio Investing says its platform allows commission-free trades in the shares of nearly all of the more than 800 US-registered ETFs in its twice-daily trading windows. 

Clients can also trade individual stocks and mutual funds without paying per-trade commissions.

The service is available for a fixed fee of USD29 per month or USD290 per year.

Founded in 2000, Folio Investing eliminated the traditional commission-based pricing structure by developing a system of window trading: clients' buy and sell orders are bundled, matched internally, and then sent to the market during one of two daily trading windows. The savings in execution costs is passed on to customers.

"Offering a commission-free selection of only a couple of dozen ETFs potentially limits the investing and diversification options for investors," says Greg Vigrass, president and chief executive of the Folio institutional division. "Such a limited number may confine investors to choosing from funds whose management fees are high, whose investments are inappropriate, or where there may be conflicts of interest. Our platform offers hundreds of ETFs, from every issuer, and investors can make their best selection based on cost, asset class, diversification, and their own investment needs and strategies."