Best ETF Brokers
Richard Montana | August 1, 2022
ETFs or “exchange-traded funds” are exactly as the name implies: funds that trade on exchanges, generally tracking a specific index. When you invest in an ETF, you get a bundle of assets you can buy and sell during market hours, potentially lowering your risk and exposure, while helping to diversify your portfolio.
ETFs can be good for beginners because they offer entry-level access: You can buy as little as a single share, and with some brokers, like RoboMarkets, you can even buy fractional shares. Fees vary by broker, but it’s best to look for options with very low or no transaction costs.
If you enjoy focusing on several markets simultaneously, challenging yourself into making rational investments and trading on one of the most prestigious markets in the world – trading Exchange Traded Funds could be what you are looking for.
To buy or sell an ETF, you need a trading account with a stock broker or investment platform. With so many brokers to choose from, you may be unsure which broker is right for you. We have compiled this ETF trading guide to help you understand more about the different options available and so that you can discover some of the best ETF brokers around today.
Top 10 ETF Brokers
Here you will find our best ETF brokers, based on thousands of hours of extensive research, testing and analysis across hundreds of brokers. Upon conclusion of each of our broker reviews, we have assigned each broker with a rating.
Some of the most important factors that contribute towards a good broker for trading ETFs online have been considered including things such as the available ETFs, other financial instruments, platforms, apps, tools, spreads, execution, liquidity, fees, education, funding options, regulation, customer service and more.
Each of our best brokers for ETF trading have undergone and passed our stringent broker reviews with flying colours, based on what we consider to be amongst the most important considerations when choosing an ETF broker for trading online. These brokers are well-established within the online trading industry, providing top ETFs trading conditions to traders and investors of all experience levels.
Having the best ETFs brokers according to our findings listed in one place, can help you save time when looking for the best ETF broker for your own individual needs.
ADGM FRSA, ASIC, BVIFSC, CBI, FFAJ, FSCA, IIROC, JFSA
Min $100 Deposit
ASIC, BaFin, CFTC, DFSA, FCA, FINMA, FMA, FSA, FSCA, JFSA, MAFF, MAS, METI, NFA
Min $250 Deposit
With many years of direct industry experience, regulation in various countries and an outstanding multi-lingual customer support team, AvaTrade is the broker of choice for many trading opportunities, including ETFs. The broker offers a range of popular ETFs to trade as CFDs, giving traders the ability to trade long or short with leverage. With AvaTrade, you can trade on user-friendly platforms for all of your devices and get free access to an excellent range of premium tools to help you make informed decisions. They have educational content for those of you who are beginners and also provide social trading platforms if you are looking for a more hands-off approach.
When trading with IG you can get exposure to multiple assets from just a single trade with exchange traded funds (ETFs). They have a superb selection of ETFs for you to choose from with over 5,400 ETF markets covering indices, sectors, commodities and currencies. This is perhaps the largest variety that I have seen from any broker that provides ETF trading. You can trade ETFs on an award-winning platform and take a position wherever you are, and receive trading alerts and signals on the go via the mobile trading app. One the key benefits I found with IG is that they have a brilliant ETF screener tool which can help you to find the ETF that’s right for you.
With Pepperstone, you can trade ETF CFDs on more than 100 ETFs that track the performance of sectors including mining, energy, technology, bond markets and retail. They have a great range of ETFs that track the overall performance of equity markets in an impressive 35 countries and across 6 continents. Wherever your equity market interests are, Pepperstone will most likely have an ETF for you to trade.
With eToro, you can explore a variety of Exchange Traded Funds. They have modern and intuitive platforms where you can easily track charts, analyse the markets, trade and invest in a generous selection of ETFs. Not only is eToro great for self-directed trading, they are one of the world’s leading social trading networks. At eToro, buying and selling ETFs is very straightforward. The brokers platform is easy to use and offers zero commissions (terms apply) on ETFs as well as low minimum investments.
FP Markets offers various ETFs that contain many types of investments, including stocks, commodities, bonds or a mixture of investment types. At FP Markets, investors can easily participate in ETF trading by buying or selling ETFs via either the FP Markets’ Mobile App or FP Markets website, where they will also have access to a wide variety of ETFs across sectors and markets, lower expense ratios, fewer broker commissions and a personal account manager.
Degiro is a multi-award winning, multi regulated online broker with very competitive fees and large range of products to trade on 50 exchanges, spanning across 30 different countries. They have a comprehensive range of trading tools and educational materials to assist you with making informed decisions according to your own financial goals.
The Vanguard brokerage account gives you access to a range of investment products and services with competitive fees. They are more suited towards long-term investors who are looking for a convenient way to manage their funds with an established company.
WellsTrade provide you with an online brokerage account so that you can conveniently buy and sell assets using an intuitive platform. They have reasonable fees, powerful tools and expert analysis to help assist you with your decisions.
CAPEX is an online broker regulated in multiple jurisdictions that offers over 2,100+ tradable assets on flexible and powerful trading platforms. They also have a selection of trading tools and market insights but lack in educational materials.
BUX Markets is a regulated brokerage offering CFD trading and signal following via its proprietary TradeHub platform. BUX Markets offer access to a large range of global markets with tight spreads, fast execution and low minimum stake sizes. Whilst they have competitive spreads and fees, the brokers funding options are limited and there are is no live chat support.
ETF Trading Guide
What are ETFs?
An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold throughout the day on stock exchanges.
An ETF works like this: The fund provider owns the underlying assets, designs a fund to track their performance and then sells shares in that fund to investors.
ETFs give you a way to buy and sell a basket of assets such as stocks and commodities, without having to buy all the components individually. If you speculate that the energy market, for instance, will go up, you can invest in a few trades simultaneously.
Trading ETFs is a popular way to gain exposure to a range of markets – including indices, sectors, commodities and currencies. A prominent advantage of ETFs is that often they balance each other out; if one instrument’s value goes down, another instrument’s value can go up and even it out.
ETFs are bought and sold on a stock exchange – in much the same way as stocks are traded. Although, ETFs do not grant the investor shareholder rights in the same way as traditional investing. For example, stock ETFs can pay dividends, but do not grant the holder voting rights.
Stock ETFs include a selection of stocks to track a specific industry or entire sector. Bond ETFs, commonly known as Fixed Income ETFs, allow traders to invest in various fixed income securities like corporate bonds or treasuries. Industry or sector ETFs can either focus on a particular sector or industry. Commodity ETFs allow traders to invest in commodities such as crude oil or gold. ETFs like these are important to investors because they allow a diverse investment portfolio, hold shares cheaper than the actual physical possession of the commodity and coul earn gains from stock declines by shorting stocks.
Stock index ETFs
Stock index ETFs are funds that track the performance of a specific index. Stock indices represent a group of shares, whilst ETFs can enable you to gain such exposure from a single position, as they can track multiple stocks.
As an example, a FTSE 100 ETF would track the performance of the FTSE 100, and would either hold physical shares of the index’s constituents, or products that mimic its price movements.
Investors and trades can access the forex market through currency ETFs without having to buy or sell the underlying currencies. Currency ETFs can track a single currency or more commonly baskets of currencies.
Currency ETFs may be used as a way to gain exposure to the general economic health of a particular region (such as the EU) or other emerging market economies. These ETFs may also be used for hedging against inflation and foreign asset risk.
Sector & industry ETFs
A sector or industry ETF will track an index that consists of companies operating within the same industry. Most industries will have an index that comprises of major stocks. As an example, the gold sector has the S&P 500 Global Gold Index, which implements the securities from that sector including miners, researchers and producers.
In a similar way to currency ETFs, sector ETFs may be used as a way to try and take advantage of changes in an economy’s health and also to hedge against any existing positions. If an investor or trader has significant risk in a particular sector, they may consider mitigating this risk by shorting a sector ETF.
Commodity ETFs are not made up of the underlying commodity, but are instead derivative contracts that take their price from the commodity. This enables investors and traders to speculate on the price of various commodities without having to take physical ownership of the underlying asset.
It should be noted that there is a distinct difference between commodity ETFs and commodity-linked ETFs, such as the sector ETFs described above. Commodity ETFs actually emulate the price of the underlying commodity, whereas commodity-linked assets track companies within the industry.
Inverse or short ETFs
Inverse ETFs are those funds that move in the opposite direction to the underlying asset. Thus, any movement that the asset makes, the inverse ETF will do the opposite. They can usually be found on any of the aforementioned categories of ETFs.
Investors and traders may tend to use inverse ETFs as a means of opening short positions on the market. This can be for the purpose of hedging existing long positions, or just a way of speculating on potential falling markets.
Leveraged ETFs are designed to mirror an underlying asset but use financial derivatives to amplify investors’ exposure. For example, a leveraged 3x ETF would maintain a $3 exposure to the underlying asset for every $1 of investor capital.
Trading with leverage can greatly increase risks and losses. It is therefore imperative to have a clear understanding of how leveraged trading works and the significant risks involved. Professional traders would thoroughly research ETFs and create a risk management strategy before opening a position.
What is ETF Trading?
An exchange-traded fund (ETF) is a basket of securities you buy or sell through a brokerage firm on a stock exchange. They offer you a way to invest in a wide range of bonds or shares in one package. They’ll typically track a specific market, like the FTSE 100.
Unlike some other funds, ETFs are traded on the stock market. That means you can buy or sell them at any time during the day. Many brokers will offer popular ETFs to trade as CFDs, giving traders the ability to trade long or short with leverage.
The major benefit of trading ETF CFDs is that you’re buying a contract for difference which derives its price from the ETF. By doing so, you can open trades in either direction – bullish or bearish – and can potentially generate returns by speculating correctly. Provided your assessment of the ETF is correct, you can benefit from price movements either way. You can go short on the ETF if you believe prices will go down, or you can go long on the ETF if you believe prices will rise. With ETFs CFDs, leverage can magnify your gains. But signficant losses can also result.
What is an ETF Broker?
An ETF broker is a firm or an individual who executes ETF trades on behalf of the clients and usually charges them a commission fee for doing so. A firm or individual who trades ETFs for their own account is called a trader. Most ETF brokers handle transactions for a number of individual and institutional customers.
Why Trade ETFs?
Each ETF is usually focused on a specific sector, asset class, or category. ETFs can be commonly used to help diversify your investment portfolio, or, for the active trader, they can be used to try and take advantage of price movements.
ETFs have several advantages over traditional open-end funds. The 4 most prominent advantages are trading flexibility, portfolio diversification and risk management, lower costs, and potential tax benefits.
How to Start Trading ETFs?
Now that you have had a brief overview of what ETFs are and what to look for when choosing a broker, you may be considering opening an online trading account to trade ETFs online. To do so, you will need to choose an ETF broker, follow the account opening process and you will then be able to start trading online through one of their ETF trading platforms. Here is a summary of the key steps:
1. Decide if ETF trading is for you
Trading ETFs online carries an element of risk and can take more time than other forms of investing. You will need to research ETFs, manage your positions, follow market news and decide how to react to it. It is important to understand the risks and dedication that comes with trading ETFs online.
2. Educate yourself
Before trading ETFs, it is imperative to learn as much as possible about investing and ETFs in particular. Any mistake could prove to be costly. There is an abundance of free educational materials provided by many online brokers that can help you to improve your trading skills and knowledge.
Most ETF brokerages will also provide a free demo trading account so that you can practice trading ETFs online with virtual funds in order to familiarise yourself with the trading platforms and practice your trading strategies until you feel confident enough to open a real trading account.
3. Choose an ETF broker
In order to trade ETFs online, you will need a broker account and trading platform to execute your trade positions through to the markets. When choosing a broker, there are a few important things to consider such as regulation, commission fees, platforms, tools, education, funding options and customer support.
4. Research ETFs
If you have made it this far then you may be ready to start trading ETFs online! The next step is to research the different ETFs to discover those in which you have an interest in trading. Perhaps there is a particular industry, product or service that is already of interest to you. Many brokers will allow you to filter ETFs according to various criteria in order to narrow down your search if need be.
Many traders will begin by analysing different companies, studying public information such as finances, earnings and reports from professional analysts. The best brokers should have this information conveniently displayed for you within their trading platform.
5. Have an ETF trading plan
Some of the most important factors that can help determine ETF trading performance can be the trading plan and discipline. It is important to have a solid trading plan personalised to your own needs that includes the money management and trading strategy that you will use. Most experts and professional traders would try to not let negative emotions such as fear, anger and greed affect their trading strategy.
6. Buy and sell ETFs
Once you know what ETFs you want to trade online, you can analyse them to help decide if and when you will place your trades. After placing an ETF trade, you will need to keep track of how it performs and manage it according to your trading plan. Some investors will keep hold of ETFs for the long-term, whereas traders may buy and sell ETFs on a daily basis.
Choosing an ETF Broker
There are various factors worth considering if you are looking for an ETF broker to trade online with. In this section, we will cover what we consider to be some of the most important factors that you need to be aware of when choosing a suitable ETF broker for your own individual needs.
If you are looking for a broker to trade ETFs online with, then regulation should really be one of the first things that you look for. Regulation is very important as it can give traders some protection in the case something was to go wrong. Regulated brokers must follow strict rules and procedures that are put in place to protect investors. Without regulation, there may be no help should the worst happen.
If you have a particular market in mind, you will need to ensure that the broker you are considering has ETFs in that market available to trade. The more ETFs that the broker has, the more choice you will have if you wish to trade other markets in the future. The financial instruments to look out for include Forex, Commodities, Cryptocurrency, Stocks, Indices, Options, ETFs, CFDs and Futures.
Brokers will often charge a commission fee for processing your ETF trades through their platform. There may also be accounting fees and inactivity fees. It is important to be aware of all the broker fees and compare brokers to make sure they are providing good value. If you are looking to save as much as possible on your trading costs, you can take a look at our best discount brokers.
To trade ETFs online, you will need an ETF platform or trading app which the broker will provide you with. There are various desktop, web and mobile platforms available, some more user-friendly than others. Each platform will have a choose of trading tools, features and functionalities. If you are already familiar with a specific trading platform, you may wish to check that the broker provides it. Alternatively, you can opt for a popular and user-friendly ETF trading platform such as MetaTrader or cTrader. You will find that there are lots of MetaTrader brokers which is one of the most user-friendly platforms that gives convenient market access for manual and automated trading strategies.
In finance, leverage refers to the act of magnifying positions through the use of borrowed capital. You have to qualify for a margin account, but when you do, you’re able to use leverage (margin) when trading ETFs. Leveraged products, such as ETFs, magnify your potential profit but also your potential loss.
For example, if you had an account balance of $10,000 and leverage of 1:2, you would be able to take a position size of $20,000 ($10,000 x 2 = $20,000).
Whilst this does mean that you can control a position size larger than you would have been able to without leverage, it also means the risk is significantly greater. It is imperative that you have a clear understanding of leverage and how it works before trading ETFs with leveraged positions.
The best ETF brokers should have a generous selection of educational resources such as trading guides, tutorial videos, webinars, eBooks, quizzes and more. These can help you to learn more about trading ETFs online and to help familiarise yourself with the brokers products and services. We are a big advocate of brokers who support informed trading. If you are new to trading and need as much guidance as possible, you might want to explore our best brokers for beginners.
Most ETF trading platforms will have an array of built-in trading tools to assist with their daily trading activities and thorough market analysis. However, if you require any additional tools, it may be worth checking that they are provided by the broker. Tools can include economic calendars and earning reports to keep up to date with the latest stock market news, which can be used as part of a fundamental analysis. Other trading tools may include trade calculators, trading signals, market alerts and more.
Each ETF broker will have its own minimum deposit policy so check that you can meet this requirement. You may also need to provide some personal information in order to pass the brokers KYC and AML procedures. The sign-up process can be quicker at some brokers, especially if all of it is conducted online. During the sign-up process it is very important to make sure that you read all of the brokers terms and conditions, only proceeding if you understand and agree with them.
ETF brokers can have a variety of different account funding options in order for traders to make deposits and withdrawals to and from their trading account. You should make sure that the broker has a convenient funding options for you along with the time taken and fees involved. Common broker payment methods can include wire transfer, credit/debit card whereas some brokers will offer online payment methods such as Neteller, PayPal and Skrill.
There are ETF brokers located throughout the globe. Some will offer email and telephone support whereas others will also offer live chat support. You want to be able to contact the broker at a time and via a method that suits you. Therefore, it can be important to check where the brokers’ offices are located, what times they are available and how they can be reached. You could test their response time and quality prior to opening an account.
ETFs are a type of pooled investment security traded on a stock exchange in the same way that a regular stock can be traded. Rather than holding only one underlying asset as you would with a stock, ETFs are a type of fund that holds multiple underlying assets. Unlike mutual funds, ETF share prices fluctuate throughout the day as the ETF is traded whereas mutual funds trade just once a day after the market closes.
Trading ETFs is a popular way to gain exposure to a range of markets from just a single position, including indices, sectors, commodities and currencies. ETFs are popular among investors as they can offer a broad market exposure from just a single position. ETF trading can be suitable for day trading and swing trading. Rather than trading one specific stock, ETFs offer diversification to a market theme, as well as making that theme incredibly intuitive.
However, it is important to understand the significant risks involved with ETF trading, especially when using leveraged positions. Most experts would suggest trading on a demo account with virtual funds to begin with.
This can be a useful way to familiarise yourself with how to trade ETFs and use trading platforms whilst allowing you to practice your trading strategies until you feel confident and produce consistent results. Most trading brokers provide unlimited demo accounts free of charge.
Take your time to research brokers and do your own due diligence, the above information is only for educational purposes and not advice. Please feel free to use our broker comparison tool if you need some further inspiration before you get started.