Fidelity, Schwab block orders of BlackRock, Texas Cap ETFs

Fidelity Investments and Charles Schwab are prohibiting clients from investing in money-market ETFs on their trading platforms, an unusual move for the financial powerhouses who typically permit easy access to funds that already trade on an exchange.

The two firms are blocking purchases of three exchange-traded funds offered by BlackRock and Texas Capital, the first to track money-market securities such as Treasury bills and other government-backed debt in an ETF structure. The new funds serve as a direct challenge to mutual-fund providers, who have long been big, established players in money-market products. Fidelity and Schwab alone manage trillions of dollars in money-market assets, and this month, Schwab filed plans to launch its own government money-market ETF.

A Schwab spokesperson said its decision is consistent with the firm's «long-standing approach» of only making available Schwab affiliate money-market mutual funds, while a Fidelity spokesperson said this is an extension of the company's policy to «generally restrict» third-party money-market mutual funds.

Yet, the move stands out because trading platforms like Schwab and Fidelity typically don't restrict exchange-traded funds, even if those funds are in competition with existing in-house offerings.

«I've never seen this with any other ETFs,» said Mike Younkman, CIO at Ankerstar Wealth, a firm with roughly $110 million in assets under management, who had been investing in Texas Capital's MMKT for his advisory clients, and was «disappointed that