E-Trade Group Inc., an aggressive player in on-line brokerage, is getting into asset management.
The Palo Alto, Calif.-based company said Tuesday that it has received regulatory approval to launch a mutual fund family.
Its new investment unit, E-Trade Asset Management, will introduce its first portfolio, the E-Trade Standard & Poor's 500 Index Fund, next week.
E-Trade said it plans to start offering additional proprietary investment products in the next 12 to 18 months.
The broker-dealer is not the first on-line operation to offer its own mutual funds. San Francisco-based Charles Schwab & Co. has had a fund family for several years; Waterhouse Investors Service, a unit of Canada's Toronto-Dominion Bank, launched its first mutual fund in May.
E-Trade's entry into asset management comes as the company is under fire over the failure of its Web site during peak trading hours in recent weeks. The timing was called coincidental by Christopher Musto, a senior analyst with Gomez Advisors, Concord, Mass.
Instead, the company's venture into asset management is an attempt to appeal to another type of investor, Mr. Musto said.
"It's a way to make money from people that don't trade stock a lot," he said.
