Exchange-Traded Funds (ETFs)

Are you looking for a cost-effective and tax-efficient way to build your portfolio in an array of businesses within the same sector? Would you like to diversify your portfolio by increasing your investment targets without devoting hours and hours researching each company? Then you may want to consider adding low-cost exchange-traded funds to your investment portfolio strategy.

With more than 30 years experience serving self-directed investors, Scottrade knows our clients prefer varying levels of flexibility and control over their investments. Exchange-traded funds, or ETFs, give you the ability to match the performance of broad market indices or specific targets while defining risk and portfolio management strategies that fit your personal investment style.

Trading ETFs can help you explore the market with confidence

To stay on top of the markets and make informed ETF trading decisions, Scottrade provides free access to online trading tools, research and education including the basic facts you should understand when investing in ETFs. And our tools and products are easy to access wherever you are, giving you the information you need to meet your personalized investing objectives.

Additionally, Scottrade provides our clients with commission-free online trading for Focus™ Morningstar ETFs. These funds combine the diversification of a mutual fund with the trading flexibility of common stocks and are recognized for their low expense ratios and tax efficiencies. These funds have been recognized by investment industry observers, including ETFdb, an industry-leading ETF database, which named the funds #1 on their list of the 10 Most Useful New ETFs of 2011*.

Providing value and expertise with FocusShares and Morningstar® indexes

FocusShares launched 15 U.S. domestic ETFs based on Morningstar indexes With a commitment to empowering investors to “create your portfolio, your way,” FocusShares has developed a family of funds that enable you to build a diversified domestic portfolio with trading flexibility at a low cost.

Morningstar® is globally recognized for thorough, objective market research and insights, and its team of research professionals uses a rigorous, in-depth approach when constructing Morningstar Indexes. To build its indexes, Morningstar tracks thousands of liquid, investable stocks, ensuring depth and diversity within each sector category and providing confidence to investors with a wide range of financial strategies and objectives.

$0 Commission ETFs

Looking for commission-free ETF trading? Get the freedom to invest on your terms with confidence. Scottrade customers can trade Focus™ Morningstar ETFs, which boast expense ratios among the lowest in the exchange-traded fund industry, commission-free from their online account. With these funds, you can build a highly-customized domestic equity portfolio with low management fees, smartly indexed to 11 key business sectors, three investment styles and one broad market. Learn more about trading ETFs in the Scottrade Knowledge Center.

Fund Name	Symbol
Focus ™ Morningstar US Market Index ETF	FMU
Focus ™ Morningstar Large Cap Index ETF	FLG
Focus ™ Morningstar Mid Cap Index ETF	FMM
Focus ™ Morningstar Small Cap Index ETF	FOS
Focus ™ Morningstar Basic Materials Index ETF	FBM
Focus ™ Morningstar Communication Services Index ETF	FCQ
Focus ™ Morningstar Consumer Cyclical Index ETF	FCL
Focus ™ Morningstar Consumer Defensive Index ETF	FCD
Focus ™ Morningstar Energy Index ETF	FEG
Focus ™ Morningstar Financial Services Index ETF	FFL
Focus ™ Morningstar Healthcare Index ETF	FHC
Focus ™ Morningstar Industrials Index ETF	FIL
Focus ™ Morningstar Real Estate Index ETF	FRL
Focus ™ Morningstar Technology Index ETF	FTQ
Focus ™ Morningstar Utilities Index ETF	FUI

_{Diversification does not assure a profit, or protect against loss, in a down market.}

_{Select investments are commission free to those using Scottrade’s online platforms. Other fees and charges may apply.}

_{*Source: ETFdb.com, 10 most useful new ETFs (for buy-and-hold investors), December 2011. Full article available at http://etfdb.com/2011/10-most-useful-new-etfs-of-2011-for-buy-and-hold-investors/}

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Online market and limit stock trades are just $7 for stocks priced $1 and above.

Scottrade does not charge setup, termination, inactivity or annual maintenance fees. Applicable transaction fees still apply.

Scottrade does not provide tax advice. The material provided is for informational purposes only. Please consult your tax, or legal, advisor for questions concerning your personal tax or financial situation.

Select investments are commission free to those using Scottrade's online platforms. Other fees and charges may apply.

Any specific securities, or types of securities, used as examples are for demonstration purposes only. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security.

Investors should consider the investment objectives, risks, charges and expenses of a mutual fund carefully before investing. A mutual fund's prospectus contains this and other information about the mutual fund. Prospectuses are available through our website or through a Scottrade branch office. The prospectus should be read carefully before investing. No transaction fee (NTF) funds are subject to the terms and conditions of the NTF funds program. Scottrade is compensated by the funds participating in the NTF program through recordkeeping, shareholder, or SEC 12b-1 fees.

Investors should consider the investment objectives, charges, expense, and unique risk profile of an Exchange Traded Fund (ETF) carefully before investing. Leveraged and Inverse ETFs may not be suitable for long-term investors and may increase exposure to volatility through the use of leverage, short sales of securities, derivatives and other complex investment strategies. A prospectus contains this and other information about the ETF and should be obtained from the issuer. The prospectus should be read carefully before investing.

Focus™ Morningstar ETFs are commission free for those using Scottrade’s online platforms. Investors not affiliated with Scottrade are subject to commission costs. FocusShares, LLC, is a registered investment advisor (RIA), exchange-traded funds (ETF) sponsor and wholly-owned subsidiary of Scottrade Financial Services, Inc.

Morningstar is a service mark of Morningstar, Inc. and has been licensed for use for certain purposes by FocusShares, LLC (an affiliate of Scottrade, Inc.). The Focus™ Morningstar ETFs are not sponsored, endorsed, sold or promoted by Morningstar, and Morningstar makes no representation regarding the advisability of investing in Focus™ Morningstar ETFs.

Margin trading involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. The Margin Disclosure Statement and Agreement (PDF) is available for download, or it is available at one of our branch offices. It contains information on our lending policies, interest charges, and the risks associated with margin accounts.

Options involve risk and are not suitable for all investors. Detailed information on our policies and the risks associated with options can be found in the Scottrade Options Application and Agreement, Brokerage Account Agreement, and by downloading the Characteristics and Risks of Standardized Options and Supplements (PDF) from The Options Clearing Corporation, or by requesting a copy from a Scottrade branch office. Supporting documentation for any claims will be supplied upon request.

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