"Trading commissions are one of the smallest drivers of their revenue today," Mr. Ryan said. At Schwab, trading revenue, including commissions, accounted for 8% of the firm's total last year, down from 11% in 2016 and 14% in 2015. Shares of Schwab rose nearly 3% to $45.88 Tuesday. Shaving trading costs and slashing fund fees to rock-bottom prices has helped both Schwab and BlackRock's iShares attract individual investors and win market share. Schwab has vaulted to the fifth-largest U.S. ETF issuer just 10 years after launching its first fund, according to Morningstar. BlackRock accounts for almost 40% of the market with $1.4 trillion in U.S. ETFs. Trade commissions are one of many costs investors should look at before buying an ETF, said Mark Armbruster, president of Armbruster Capital Management, a registered investment adviser in Pittsford, N.Y., that manages about $400 million. Investors also must consider the fund's management expenses, its underlying index and the bid-ask spread, a measure of how efficiently a stock trades. "It's an important consideration, but it's not the only consideration," Mr. Armbruster said. "But for smaller accounts...it can be really meaningful." Write to Asjylyn Loder at asjylyn.loder@wsj.com Full Text Translate Charles Schwab Corp. and Fidelity Investments are making hundreds more exchange-traded funds free to trade on their platforms. Schwab kicked off the latest round of price cuts with an announcement Tuesday morning that it would double the number of ETFs that can be bought and sold at no cost on its platform. Fidelity followed within the hour saying its platform would likewise expand its commission-free lineup to include more than 500 ETFs. The back-to-back moves mark the latest salvo in a yearslong battle that has dragged prices lower on everything from advice and asset management to trading. Driving the broad changes across the money-management industry has been an investor base that is increasingly cost- conscious. Investors are increasingly forsaking pricier stock and bond pickers in favor of low-cost passive funds and finding other ways to save costs. ETFs, which charge as little as $3 a year for every $10,000 invested, have been one of the biggest beneficiaries of that trend. Assets in U.S. ETFs have swelled to $3.6 trillion from $793 billion at the end of 2009, according to Morningstar. Aside from choosing cheaper products, investors are also focused on transaction fees, leading brokerages to go lower and lower. In pushing transaction costs to zero on so many funds, Schwab and Fidelity will forgo transaction revenue. But they are betting that the fee cuts will lead to new customers, who will purchase more profitable products and services like cash management or Schwab's own proprietary funds, said Richard Repetto, a principal at Sander O'Neill + Partners. "They get more customers and they get more assets," Mr. Repetto said. Tuesday's price cuts call to mind a similar escalation of the fee wars in February 2017. Schwab kicked it off by lowering transaction fees on stock and ETF trades to $6.95 from $8.95. Later that month, closely held Fidelity undercut Schwab by reducing online-trade commissions on stocks and ETFs to $4.95 from $7.95. Schwab followed suit within hours, matching reducing online-trade commissions on stocks and ETFs to $4.95 from $7.95. Schwab followed suit within hours, matching Fidelity's price. TD Ameritrade Holding Corp. said it would cut trading fees to $6.95, from $9.99. Last year, Vanguard Group announced plans to eliminate transaction fees on all ETFs, even those sold by its competitors. The elimination of transaction costs has been especially attractive to those investors who squirrel away small amounts of money with each paycheck. For those buyers, paying commissions on small investments across a portfolio of ETFs adds up every month, eroding overall returns. "The cost of trading is profits you don't have," said Jerome Donovan, a 65-year-old retiree who became a Schwab customer more than 30 years ago when he grew tired of paying as much as $200 per trade to invest in stocks. While the race to lower fees has been a boon for these and other types of investors, brokerages have suffered. Commissions earned per trade have fallen sharply across the industry, according to a report from Moody's Investors Service. Starting March 1, Schwab will sell 503 ETFs that won't come with a $4.95 transaction fee. Its expanded lineup of commission-free ETFs will include funds from BlackRock Inc., the biggest ETF issuer in the world. BlackRock already sells some of its iShares ETFs through competing brokerages, including Fidelity and TD Ameritrade. Fidelity, which has a longstanding relationship to offer iShares ETFs commission-free, will increase the number of funds to more than 500 and for the first time include ETFs from issuers other than Fidelity and iShares. The privately held Boston brokerage also will expand the roster of no-fee iShares ETFs for the second time in less than a year. It is a worthwhile trade-off for brokerages because trading commissions are a small piece of their revenue, some of which is offset by charging asset managers for the privilege of being on their platforms, said Devin Ryan, managing director at JMP Securities in New York. "Trading commissions are one of the smallest drivers of their revenue today," Mr. Ryan said. At Schwab, trading revenue, including commissions, accounted for 8% of the firm's total last year, down from 11% in 2016 and 14% in 2015. Shares of Schwab rose nearly 3% to $45.88 Tuesday.