Retail investors have gobbled up ETFs in recent years, attracted to their lower fees compared with traditional mutual funds. As of the end of December, ETFs held some $3.3 trillion of assets, according to the Investment Company Institute. The thirst for cheap products has led to a war for investor dollars among the major online brokers.

Both companies said they would make around 500 ETFs available for trading at no cost, each doubling the amount of funds in their offerings. The funds being added include hundreds of iShares ETFs, products developed by BlackRock, the world's biggest asset manager.

The price war between major U.S. brokerages heated up Tuesday after Charles Schwab and Fidelity both announced they would expand commission-free trading to hundreds more exchange-traded funds.

First rival firms started slashing commissions for trading. Then they began eliminating trading fees altogether, but on a limited set of ETFs. Vanguard threw down the gauntlet last year when it announced it would eliminate transaction fees on some 1,800 ETFs, including those from rival asset managers.

J.P. Morgan entered the fray last year, too, rolling out a digital investing product that includes free or discounted trades on stocks and ETFs for one year for all customers, and permanently for those above a certain threshold of money held at the bank.

Banks and brokerages are "fighting to get the money to be sticky on their platforms," said Todd Rosenbluth, senior director of ETF and mutual fund research at CFRA. For investors, they will be able to build a portfolio of ETFs "without having to worry about the implementation cost."

Fidelity said Tuesday that it is expanding an existing partnership with iShares, adding them to its commission-free offering as of Feb. 28. It is also adding more funds in specialized categories like smart beta and actively managed funds.

Schwab says it's adding iShares ETFs to its OneSource offering as of March 1. It also said it will add ETFs from Invesco, State Street Global Advisors and WisdomTree among others.

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