Despite this deep bench of free-trade ETFs, it’s still a tight race between TD Ameritrade and Vanguard. TD’s roster includes a broad selection of iShares funds, many of which are of country-specific. Additionally, their offerings comprise bond funds, ETFs that track US-based indexes as well as ETFs from Vanguard, SPDRs and a handful of specialty funds. From an international perspective, TD Ameritrade is the clear winner.

Vanguard is the champion from a sector perspective though, offering 11 funds that cover the major sectors that many investors will fund useful in an allocation strategy.

One must also consider account restrictions.

Vanguard may restrict your account for 60 days if you trade the same Vanguard ETF in a Vanguard Brokerage account more than 25 times over a 12-month period. Additionally, if you open a standard account with less than $50,000 you will be charged a $7 commission for your first 25 trades and then $20 for each subsequent trade, on top of an annual $20 account service fee.

Under TD’s program, investors who hold funds for less than 30 days will be charged a commission-free ETF short-term trading fee of $19.99. Standard commissions at TD are $9.99 for Internet orders for stocks and all other ETFs. There’s no tiered pricing regime aside from TD’s Apex program, under which investors who average five or more trades per month over a three-month period, or who maintain a minimum total account value of $100,000, avoid service fees and gain access to a deeper pool of research.

The war for ETF assets continues to heat up. Thus far, the battle has centered around attracting assets to in-house funds. But TD and Fidelity are changing the rules of the game. Neither of them offer in-house funds to investors, whereas the likes of Vanguard only offer free trades on their proprietary funds. The entrance of Fidelity and TD marks a new phase in which the goal is to attract clients who will generate additional fees and commissions over the life of an account.

When comparing these commission-free offers you should consider your investment style and the available funds. If you’re running an asset allocation strategy that you rebalance on, say, a monthly basis, Vanguard might be your best option. Vanguard’s expense ratios are unbeatable for its in-house funds, which provide broad access to numerous sectors and indexes. If you’re focused on international investment, TD Ameritrade would probably be right for you.

What’s New

China is arguably the most important emerging market (EM) for investors. It accounts for about 33 percent of the EM universe as measured by market capitalization, and consequently figures prominently in EM funds. Nonetheless, your China exposure may not be as complete as you’ve been led to believe.

The broad Chinese market is nearly impossible for foreign investors to tap into because of the central government’s tight restrictions on investment and foreign capital. In fact, only about 28 percent of China’s equity market is open to foreigners. Most China-focused funds invest in US-listed American Depositary Receipts, the few local B-Shares open to foreign investors, or H-Shares, the Hong Kong listings of Chinese stocks. That limited access leaves funds heavily concentrated in just a few sectors and also increases correlations to the broader global markets.

Nonetheless, there’s a bevy of China-focused ETFs on the market, all of which track specialty indexes rather than local indexes.

Van Eck Global moved to address that issue on Thursday with the launch of Market Vectors China ETF (NYSE: PEK).

The fund will track the CSI 300 Index, a local market capitalization-weighted index designed to capture the 300 largest, most liquid shares traded on the Shanghai and Shenzhen bourses. It is also designed to exclude shares that exhibit higher-than-average volatility or suspicious signs of price manipulation. Market Vectors China ETF will be the first US-based ETF offering exposure to the index, and will allow American investors to tap into the broader Chinese markets.

Market Vectors China ETF faces the same restrictions as other foreigners seeking to buy Chinese A-shares, so it will replicate the performance of the index by using swap agreements and other derivatives. That strategy may change in the future however.

While the broad Chinese market is all but impossible for foreigners to access, the authorities do have a mechanism by which Qualified Foreign Institutional Investors (QFII) can be licensed to trade a set quota of A-shares in the local markets.

A number of investment banks operating in China hold QFII licenses, but investment companies that offer ETFs don’t qualify for QFII status. As a way to sidestep that restriction, the ETF’s advisor Van Eck Associates has applied for a QFII designation. The move would greatly benefit ETF investors should Van Eck Associates be awarded a QFII license.

While the licensing process will likely be slow, I believe that the ETF is worth owning as it’s currently constructed. The CSI 300 Index is more than 50 percent off its pre-crisis highs and has fallen by almost seven percent year to date. Yiannis and I are expecting a rally in the fourth quarter or early next year as Chinese economic growth continues to outpace the global norm.

Market Vectors China ETF has already built up a daily average volume of more than 35,000 shares and the spread between the bid and ask price is tight, averaging only a few pennies. With an expense ratio of 0.72 percent, the fund looks like an intriguing way to play the domestic Chinese markets.