Charles Schwab, the San Francisco-based discount broker, is looking to expand its quickly growing footprint in the exchange-traded fund market with a $150 million acquisition of Windward Investment Management, a firm specializing in ETFs.

The deal, which is expected to close in the fourth quarter, would bring nearly $4 billion in assets under management Boston-based Windward currently has in three broadly diversified ETF portfolios to Schwab’s platform, Schwab said in a press release.

Schwab first entered the ETF market last November, but the company has had an impressive run so far, gathering some $1.4 billion in assets in less than a year. Much of that has to do with its commitment to low costs for investors, effectively undercutting all its competitors—even leading low-cost player Vanguard—on that turf.

“Schwab’s willingness to pay almost 4 percent of AUM for Windward when current public mutual fund firm valuations are closer to 3 percent of AUM is instructive,” Bill Koehler, chief investment officer of Leawood, Kan.-based ETF Portfolio Partners, told IndexUniverse.com. “It’s indicative of the growth potential they see for ETF portfolios to more broadly serve investors in the future.”

Koehler said the deal underscores the expanding role ETFs are playing in investors’ strategies as they increasingly seek transparency, lower cost, tax efficiency and performance in their portfolios.

Once the transaction closes, Schwab retail clients will have access to Windward’s portfolios, which are known for their focus on risk management.

At that time, Schwab will also begin waiving transaction commission costs for Windward managed accounts custodied on Schwab’s Advisor Services platform, the press release said.

“We think that upon closing, streamlined access and improved pricing from Schwab will further fuel Windward’s growth and enable us to add significant client value for advisors,” Schwab President and Chief Executive Officer Walt Bettinger said in the statement.