Ally Invest's Etf Offerings: Spyder Etfs And More

Ally Invest offers a wide range of investment options, including stocks, bonds, ETFs, and more. As of May 2024, you can buy ETFs on the platform, with a vast amount of ETFs to choose from. This provides investors with an opportunity to diversify their portfolios. The cost of trading ETFs at Ally Invest is also low, with commission-free trades for eligible U.S. stocks, options, and exchange-traded funds. However, for stocks and ETFs priced under $2, there is a $4.95 base commission plus $0.01 per share.

Ally Invest is a good choice for investors looking for a user-friendly platform with competitive rates, low minimums, and a solid trading platform. It is also suitable for those who want to invest in ETFs due to its large selection and low trading costs.

What are ETFs?

An exchange-traded fund (ETF) is a pooled investment security that can be bought and sold like an individual stock. ETFs can be structured to track anything from the price of a commodity to a large and diverse collection of securities. They are traded on exchanges and generally track a specific index. ETFs are bought and sold like common stocks on a stock exchange.

ETFs are made up of a collection of securities like stocks, commodities, bonds, and other investment types. This allows investors to invest in a particular sector, industry, or region instead of having to buy individual stocks. They are often organised around a strategy, theme, or exposure. ETFs are generally less expensive to manage than other investments.

ETFs are considered more tax-efficient than actively managed mutual funds. They are also more flexible, as they can be traded during regular market hours, whereas mutual funds can only be redeemed at the end of a trading day. ETFs also have lower operating expense ratios (OERs) than actively managed mutual funds.

ETFs are available on most online investing platforms, retirement account provider sites, and investing apps. They are a good option for investors looking for an affordable, potentially tax-efficient way to access a broad range of asset classes.

How does Ally Invest work?

Ally Invest is an online investment service that provides a range of investment options for people of all experience levels. It is a good choice for those who are new to investing, as well as more experienced investors, due to its low costs, low minimums, and solid trading platform.

Ally Invest offers a variety of investment options, including self-directed and managed accounts, with no account minimum for self-directed investment accounts and a $100 minimum for most robo-managed accounts. It provides commission-free trading for eligible US stocks, options, and exchange-traded funds (ETFs), as well as low options contract fees.

Ally Invest's browser-based platform is basic but effective, offering quick trading capabilities, real-time streaming quotes and data, and a customizable dashboard. It also has a mobile app that allows users to access holdings, the trading platform, research, screeners, and a stocks watchlist.

In addition to its investment services, Ally Invest also offers online banking, securities brokerage, investment advisory, mortgage and auto financing, and insurance services to its customers. It integrates well with other Ally products, such as Ally's online banking, credit cards, CDs, and home and auto loan offerings, providing customers with an overview of their financial products in one place.

Ally Invest provides educational resources and a range of tools to help investors make informed decisions, including screeners, calculators, and third-party research. It also offers 24/7 customer support and has extended trading hours from 8:00 am to 5:00 pm Eastern Time.

Overall, Ally Invest is a user-friendly and accessible investment platform that caters to a wide range of investors, offering a variety of investment options and tools to help them achieve their financial goals.

What are the fees and costs?

When it comes to fees and costs, ETFs are generally a low-cost option for investors. As they are usually passively managed and based on a market index, their fees are often lower than those of actively managed funds, such as mutual funds. Actively managed funds, where a portfolio manager or group of analysts make decisions about what securities to buy and sell, will generally charge a higher fee.

ETFs carry management fees, which cover the technical and intellectual work involved in selecting and managing assets. These fees are usually low due to the lack of "management risk", meaning the potential losses that may be incurred due to the guidance of a live portfolio manager. The overall set of fees for an ETF is known as the expense ratio, which tends to be around 0.05% for most ETFs. This is calculated by dividing the annual expenses of the investment by the fund's total value and is typically found on the fund's website. For example, an ETF with an expense ratio of 0.2% would result in $20 in fees for every $1,000 invested.

In addition to management fees, there are also trading costs associated with ETFs. When buying or selling an ETF, investors usually have to pay a commission, though some brokers offer commission-free trades. The impact of these commissions depends on the size of the investment and the frequency of trading. For example, smaller investments and more frequent trades will result in higher costs over time.

Other costs to consider include the operating expense ratio (OER), which is the percentage of fund assets taken out annually to cover fund expenses. This can add up over time, especially for ETFs with low trading volume. The bid-ask spread, the difference between the highest price a buyer is willing to pay and the lowest price a seller will accept, can also impact costs, particularly for short-term holdings.

It's important to note that some ETFs may have additional fees, such as front-end load fees or sales costs, so it's always a good idea to review the prospectus or website of the fund to understand all potential costs.

What are the investment options?

Investment options at Ally Invest include:

Self-Directed Trading

Self-Directed Trading is for the DIY types with time to spare. There is no minimum balance required to start and no commission fees on most U.S.-listed securities. You can choose from a variety of investment options, including stocks, bonds, ETFs, margin accounts, and more.

Automated Investing

Automated Investing is for those who are busy or low on time. You need a minimum of $100 to start with a Robo Portfolio. You tell Ally Invest about your goals, and they pair you with a diversified portfolio. You can choose to pay no advisory fee or put more in the market (for 0.30% a year).

Personal Advice

Personal Advice is for those seeking real, human support. You need to start with $100,000 in assets under care. You receive a personalized plan and a view of all your finances. You can expect a blended annual advisory fee of, at most, 0.85%.

Ally Invest also offers:

• Stocks
• Mutual funds
• Options (equity and index)
• Fixed Income (corporate, agency, treasuries, municipals, strips & zeros, CDs, and new issues)
• Robo Portfolios
• Personal Advice

How does it compare to other platforms?

Ally Invest is a good low-cost broker for beginner and intermediate investors. It offers $0 trading costs on eligible U.S. securities, no account minimum, and low-cost options trading. Its options trading costs are a bit lower than competitors, and it has a solid, if basic, trading platform and app. However, active traders seeking more advanced features may prefer another platform.

Ally Invest is best suited for beginners and options traders. Beginners will benefit from its pared-down experience, which provides everything you need without an overwhelming number of options. Options traders will appreciate its competitive pricing and advanced tools.

Ally Invest's cash management features are also noteworthy. Although uninvested cash in an Ally Invest brokerage account earns no interest, the platform offers instant money movement between Ally savings and brokerage accounts. This allows investors to take advantage of interest rates several times higher than the typical default sweep interest rates of most brokerages. However, this requires opening a separate Ally savings account.

Ally Invest falls short in terms of educational support and investment selection. If you're looking for educational resources to learn more about investing, other brokers like Fidelity offer better options. Additionally, expert traders seeking to trade futures, crypto, or forex will need to look elsewhere, as these are not available on Ally Invest.

Overall, Ally Invest is a strong choice for those seeking a user-friendly platform with competitive pricing and good cash management features. However, advanced traders and those seeking more comprehensive educational resources may prefer alternative platforms.

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