Best brokers to invest in ETFs:
Practice account:
Minimum deposit: £0,01
Ideal for: having the largest number of ETFs available, with low commissions, especially for small amounts invested.
Practice account:
Minimum deposit: $10
Ideal for: Investors looking for a simple platform to invest in leading global ETFs.
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Your capital is at risk. Other fees apply.
Practice account:
Minimum deposit: £0,01
Ideal for: Investors who want to trade on a cutting-edge platform.
Practice account:
Minimum deposit: £0,01
Ideal for: Investors who invest large capital and who want to build a pound-cost averaging on ETFs.
Practice account:
Minimum deposit: £0,01
Ideale per: having the largest number of ETFs available, with low commission costs, especially for small to medium amounts invested.
Practice account:
Minimum deposit: $10
Ideal for: Investors looking for a simple platform to invest in leading global ETFs.
Visit the website of eToro →
Your capital is at risk. Other fees apply.
Practice account:
Minimum deposit: £0,01
Ideal for: Investors who want to trade on a cutting-edge platform..
Practice account:
Minimum deposit: £0,01
Ideal for: Investors who invest large capital and who want to build a pound-cost averaging on ETFs.
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.
Top 4 brokers for trading ETFs:
DEGIRO
Main information
Country: Netherlands
Cost-free account:
Automatic ETF investments:
ETF commissions: €3.00 (both ETFs on LSE and European exchanges)
Promotion: 200 zero commission negotiable ETFs
Ideal for: Those who want to have the largest number of ETFs available to trade, with low commissions, especially for small to medium amounts invested.
|
Pros: | Cons: | |
200 ETFs available at zero commissions. | Automatic investments are not offered. | ||
Full coverage of both LSE and European listed ETFs. | Connectivity fee of €2.50 per annum for each foreign exchange used. | ||
Real-time quotes for Euronext ETFs. | American ETFs not available. |
DEGIRO
Main information
Country: Netherlands
Cost-free account:
Automatic ETF investments:
ETF commissions: £2,09 (both ETFs on LSE and European exchanges)
Promotion: 200 zero commission negotiable ETFs
Ideal for: Those who want to have the largest number of ETFs available to trade, with low commissions, especially for small to medium amounts invested.
Pros:
200 ETFs available at zero commissions.
Full coverage of both LSE and European listed ETFs.
Real-time quotes for Euronext ETFs.
Cons:
Automatic investments are not offered.
Connectivity fee of €2.50 per annum for each foreign exchange used.
American ETFs not available.
eToro
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Your capital is at risk.
Main information
Country: Israel
Cost-free account:
Automatic ETF investments:
ETF commissions: Variable
Promotion: Start with $100,000 worth of virtual money
Ideal for: Investors looking for a simple platform to invest in leading global ETFs.
|
Pros: | Cons: | |
145 global tradable ETFs. | Limited number of ETFs available. | ||
Possibility to buy fractions of ETFs. | ETFs denominated in USD only. | ||
Minimum deposit of $50. | Automatic investments cannot be made. |
eToro
Main information
Country: Israel
Cost-free account:
Automatic ETF investments:
ETF commissions: Variable
Promotion: Start with $100,000 worth of virtual money!
Ideal for: Investors looking for a simple platform to invest in leading global ETFs.
Pros:
145 global tradable ETFs.
Possibility to buy fractions of ETFs.
Minimum deposit of $50.
Cons:
Limited number of ETFs available.
ETFs denominated in USD only.
Automatic investments cannot be made.
TradeStation
Main information
Country: United States
Cost-free account:
Automatic ETF investments:
ETF commissions: 0.12% (min. £1.50)
Promotion:
Ideal for: Investors who want to trade on a cutting-edge platform.
|
Pros: | Cons: | |
Wide variety of both European and American ETFs. | Not recommended for beginners. | ||
Ability to short sell ETFs. | Commission-free ETFs not offered. | ||
Sophisticated trading platform. | Inactivity costs starting after three months. |
TradeStation
Main information
Country: United States
Cost-free account:
Automatic ETF investments:
ETF commissions: 0.12% (min. £1.50)
Ideal for: Investors who want to trade on a cutting-edge platform.
Pros:
Wide variety of both European and American ETFs.
Ability to short sell ETFs.
Sophisticated trading platform.
Cons:
Not recommended for beginners.
Commission-free ETFs not offered.
Inactivity costs starting after three months.
FINECO
Main information
Country: Italy
Cost-free account:
Automatic ETF investments:
ETF commissions: £2.95 - €3.95 - $3.95
Promotion:
Ideal for: Investors who invest large capital and who want to build a pound-cost averaging on ETFs.
|
Pros: | Cons: | |
Convenient flat fee for those who make high transactions. | Fees for real-time data. | ||
Possibility of making automatic investments on ETFs. | Lack of some European markets for trading ETFs. | ||
Tools on the platform simplify monitoring of the ETF portfolio. | Lack of a variable commission plan for those who invest low amounts. |
Fineco
Main information
Country: Italy
Cost-free account:
Automatic ETF investments:
ETF commissions: £2.95 - €3.95 - $3.95
Promotion:
Ideal for: Investors who invest large capital and who want to build a pound-cost averaging on ETFs.
Pros:
Convenient flat fee for those who make high transactions.
Possibility of making automatic investments on ETFs .
Tools on the platform simplify monitoring of the ETF portfolio.
Cons:
Fees for real-time data.
Lack of some European markets for trading ETFs.
Lack of a variable commission plan for those who invest low amounts.
ETFs are investment funds that are easy to trade, similar to stocks. At the same time, however, they allow the investor to achieve a high level of diversification, starting with the purchase of a single ETF.
This, in addition to the extremely low management costs, makes ETFs one of the most traded financial products by investors around the world.