- ✓Full access to LSE and European ETFs
- ✓ETF fees starting from 0,03%
- ✓ISA account available
- ✓Regulated by the Financial Conduct Authority
- ✓Both whole and fractional real ETFs can be purchased
- ✓Ideal platform for beginners with little experience
- ✓Zero commissions on buying and selling real ETFs
- ✓Possibility to invest with both real ETFs and CFDs on ETFs
- ✓Introducing broker in Europe of Interactive Brokers
- ✓Same access to Interactive Broker markets and platforms
- ✓Efficient customer service with British operators
- ✓Quick account opening compared to Interactive Brokers
- ✓Highly competitive commission structure
- ✓Large number of products and markets available
- ✓Easy-to-use web platform and app
- ✓Excellent customer service
ETFs are investment funds that are just as easy to trade as shares. At the same time, however, they allow the investor to achieve an excellent level of diversification, even from the purchase of a single ETF.
This aspect, in addition to extremely low management costs, makes ETFs one of the most traded financial products by investors worldwide.
There is no doubt that exchange-traded funds (aka ETFs) have experienced a real boom in recent years, becoming one of the most attractive financial instruments for investors.
ETFs are as easy to trade as stocks and, at the same time, allow you to benefit from diversification, similar to mutual funds (but with drastically lower costs than these).
This combination of attributes has made ETFs one of the most popular financial assets in investors' portfolios.
What can ETFs be traded on?
Would you like to trade ETFs listed on the US stock exchanges? If you are a UK resident this is possible following Brexit. If you are a European resident, however, buying American ETFs is no longer available following the entry into force of Markets in Financial Instruments Directive II (MiFID II) in 2018.
This legislation prohibits European citizens from trading non-harmonized ETFs (i.e. non-compliant with European directives).
However, this is not an issue as most US ETF issuers have their ETFs home-based in Europe to harmonize them and make them available to UK and European investors.
How to invest in ETFs
As an investor, you can invest in ETFs on your own or with the help of a financial advisor. Using a financial advisor may be beneficial if you need to develop your financial planning within a general framework.
You can rely on an advisor when you don't have the time to take charge of the entire investment process, or when you don't feel you have enough skills or knowledge to invest in your own.
In the investing world, robo-advisors are becoming increasingly popular as an alternative to traditional financial advisors. Robo-advisors are online financial consultants, whose services are a combination of both technological (algorithms and software) and human resources (dedicated financial consultants).
This hybrid model makes robo-advisors generally more efficient and less expensive than traditional financial advisors.
What are the best brokers for trading ETFs?
ETFs are financial instruments that are regulated and listed on the main world stock exchanges. As mentioned above, they are in many ways similar to stocks. One of the similarities is how you can both buy and sell on the stock exchange.
In order to invest in ETFs independently, it is therefore necessary to go through an authorized broker. Through the use of an online broker or bank, a few clicks separate you from the purchase of an ETF. But first, it is advisable to carefully consider which broker offers the best conditions for trading ETFs.
Among the many brokers and banks that allow you to trade ETFs, we have narrowed the options to those with the lowest trading fees, those who offer the most ETFs and those with the best trading platforms.
More specifically, among the various parameters taken into consideration we have given greatest importance to the following:
- Trading fees: analyzed using our tool for ETF fees on the LSE and on the European exchanges
- Cost of keeping the account: very often the ETF investor is a passive investor, who buys an ETF with the aim of keeping it in their portfolio for years. It is therefore important to choose a broker that does not have account maintenance costs, does not charge inactivity costs, and does not have costs for the custody of ETFs.
- Ability to trade ETFs listed on the London stock exchange and on European or US stock exchanges: as previously stated, following Brexit, British investors can buy American ETFs. The most active exchanges for ETF trading are Euronext Amsterdam and Paris, Borsa Italiana, London, Xetra and Zurich.
- Possibility of launching automatic investment plans: a practice requested by investors wishing to launch a pound-cost averaging on ETFs.
SAXO: invest in ETFs 7,000+ global ETFs
5.0Country: Denmark
Cost-free account:
Automatic investments in ETFs:
Trading fees: starting from 0.03%
Promotion: none
Ideal for: investing in ETFs listed on European and US markets, using an advanced trading platform
Pros:
- Transparent broker authorized by FCA
- Comprehensive offering of both LSE and European ETFs
- Variable and transparent commissions on ETFs starting from $1
Cons:
- Limited educational tools
SAXO is one of the leading online brokers in the UK. SAXO offers a zero-fee account, with no deposit fees, no inactivity charges and no portfolio transfer costs.
Commissions on ETFs are very attractive:
Starting from 0.03% per trade (min. 3 GBP) for UK ETFs
Starting from 0.005 USD/Share (min. 1 USD) for US ETFs
Starting from 0.03% per trade (min. 3 EUR) for European ETFs
On the platform you will find 7,000+ global ETFs.
SAXO does not offer automated investments in ETFs.
eToro: copy ETF portfolios from Popular Investors
5.0Your capital is at risk
Country: Israel
Conto senza costi:
Automatic investments in ETFs:
Trading fees: variable
Promotion: no ongoing promotion
Ideal for: investing in ETFs independently or with copy trading by copying other investors
Pros:
- Possibility of buying ETF fractions
- Copy trading functionality to copy the ETF portfolios of other investors
- User-friendly platform
Cons:
- Limited offer of tradable ETFs
- Available ETFs denominated in USD only
eToro is one of the world's leading online brokers. While specialising in CFD trading, it has expanded its offering in recent years, also offering investors real shares and ETFs. For the latter, the offer consists of 145 tradable global ETFs.
At eToro, you can invest in ETFs from iShares, Vanguard, PIMCO, Invesco, Xtrackers, SPDR, MSCI and Horizons.
So if you are looking for a broker with a user-friendly platform, and low costs and if you are interested in one of the 145 ETFs offered, eToro can be an excellent and practical solution for investing in ETFs, even with very small amounts.
To buy ETFs, you need to use x1 leverage. With higher leverage, you will be trading CFDs and not the underlying ETF.
52% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you can afford to take the high risk of losing your money.
MEXEM: the introducing broker of IBKR
5.0Country: Israel
Cost-free account:
Automatic investments in ETFs:
Trading fees: 0.08% min. £2.50 (UK ETFs); 0.06% min. 1.80€ (European ETFs)
Promotion: no ongoing promotion
Ideal for: build a portfolio of ETFs on a sophisticated trading platform (TWS) and with advanced analysis and research tools
Pros:
- Full coverage of tradable global ETFs
- Competitive fees especially for small amounts invested
- Advanced and customisable trading platforms
Cons:
- Trading environment not ideal for beginners
MEXEM is the introducing broker of Interactive Brokers, i.e. it is authorised by Interactive Brokers to take clients in Europe and the UK on behalf of the latter.
For this reason, the MEXEM broker can offer users what could be described as a 'hybrid' account. Traders who choose to use MEXEM will be able to take advantage of Interactive Brokers' financial product and market offerings as well as the Trader Workstation (TWS), Interactive Brokers' trading platform for more experienced traders.
One of the advantages of MEXEM lies in the ability to invest in all ETFs offered by Interactive Brokers: from those listed in London on the LSE to European ETFs listed on Xetra, Euronext, Borsa Italiana, etc.
Although MEXEM is the introducing broker of Interactive Brokers, the commission structure and costs provided by MEXEM are not the same as those provided by IBKR.
MEXEM's commission rates for ETF trading is 0.08% (min. £2.50) for the LSE; for other European markets, ETF commissions are 0.06% (min. 1.80€)
In addition, we point out a particularly convenient account cost structure: the trading account is free of charges (no maintenance or securities custody fees) and the deposit of funds is always free of charge.
Finally, with MEXEM it is possible to take advantage of leverage by activating the margin account, which is available with a liquidity of at least £2,000.
DEGIRO: invest in 200 ETFs with special conditions
5.0Country: The Netherlands
Cost-free account:
Automatic investments in ETFs:
Trading fees: 3.00€
Promotion: 200 tradable ETFs with special conditions
Ideal for: investing in ETFs listed on the London Stock Exchange and major European exchanges
Pros:
- 200 ETFs available with special conditions
- Full coverage of global ETFs
- Free real-time quotes
Cons:
- Automatic investments in ETFs not offered
- Annual connection fee of 2.50€ for each foreign exchange on which ETFs are traded
DEGIRO is a low-cost online broker with a banking licence in Germany. Opening a DEGIRO account consists of activating a zero-fee trading account. This account would therefore be perfect especially for buy-and-hold investors, since trading ETFs would only pay trading fees. The DEGIRO account is exempt from:
Inactivity costs
Securities custody and maintenance costs
Account maintenance fees
With DEGIRO you therefore only pay trading fees for each purchase/sale. For ETFs, commissions are 3.00€, whether they are listed on the LSE or European exchanges.
There is also a list of around 200 ETFs with special conditions: no transaction fees, only possible costs for connecting to the relevant exchange and possible currency conversion costs.
Every month, one can buy or sell these ETFs without paying commission costs, but only EUR 1.00 for external costs. The first transaction within a calendar month is always free of charge. Further trades on the same traded ETF can be executed in the same month, but only if both of the following conditions are met:
The transaction is of the same sign (buy or sell) as the first transaction. For example, if I bought an ETF commission-free, further purchases in the same month will also be commission-free. If on the contrary, I want to sell, I will pay the commission of 1.00€.
The transaction on the ETF has a counter value of more than 1,000 EUR or USD (depending on the currency of the ETF).
