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E*Trade Allows Small Funds in Supermarket

E*Trade of Palo, Alto, Calif. is now allowing smaller mutual funds into its fund supermarket in a so-called "incubator program." Until now, E*Trade had admitted funds with a minimum of about $50 million in assets under management. It will now admit funds with as little as $1 million in assets under management. The program was designed to help smaller and unknown funds break into the fund supermarket arena.

E*Trade will base the cost of shelf space on a fund's size. Smaller funds will be charged less than the standard 35 basis points that most supermarkets charge and the smaller the fund, the less it will be charged, said a spokesperson for E*Trade. E*Trade also plans to provide links to smaller funds' websites from its own and allow the smaller funds to post marketing materials on E*Trade's site. These two benefits are currently not available to larger funds in E*Trade's supermarket.