NEW YORK - E-Trade Group Inc. has signed a letter of intent under which Standard & Poor's would choose stocks for 21 proprietary portfolios for the soon-to-be-launched E-Trade Stock Basket brokerage service.
The tentative agreement was announced Monday. E-Trade Securities Inc. would start offering the service at the end of the month.
Stock Basket would let individual investors buy portfolios, or "baskets," of stocks online. They could choose to buy all the stocks in a portfolio, customize an existing portfolio, or assemble a basket alone. The 21 "baskets" are to comprise five index-based, 10 sector-based, and six investment style-based portfolios.
The index baskets are to be based on several of the indexes managed by Standard & Poor's, including the 20 largest companies in the S&P 500, the 25 largest in the S&P MidCap 400, and the 30 largest in the S&P SmallCap 600.
The sector baskets will be health care, materials, financials, industrials, information technology, consumer discretionary, telecommunications, consumer staples, and utilities.
The investment-style baskets will be growth and value portfolios of large-, midcap, and small-cap securities.
The minimum investment for the Stock Basket service will be $5,000, and the fee will be between 125 and 75 basis points, depending on the size of the portfolio.
E-Trade is also planning an investment advisory service for individuals, which will be available for all of E-Trade's users.