ETFs are becoming an increasingly integral part of long-term investor portfolios in the UK. Their low commissions and wide range of offerings enable the inclusion of almost any type of asset.
In this article, we will explore the top brokers to buy ETFs in the UK, alongside a comprehensive comparison of the advantages and disadvantages of each broker, so you can make an informed decision.
What is an ETF?
A fund is a basket of assets which is professionally managed. Exchange-traded funds are available on exchanges, just like regular shares. The fund is designed with specific objectives – such as tracking an index, a sector, or an asset class, but some may also be actively managed, where the fund manager actively tries to outperform the market.
The fund pools money together from different investors and invests it in diversified assets. As a result, individual investors can diversify their portfolios with a minimum investment. Shares in ETFs can be bought and sold through brokerage accounts, just like regular stocks or other assets.
Best brokers to buy ETFs
If you want to buy ETFs, here are the best brokers in the UK:
|DEGIRO||Wide selection of global and local ETFs||From €0 (+ €1 handling fee)|
|Scalable Capital||Wide selection of global and local ETFs||No order fee for over 750 ETFs|
|Interactive Brokers||Europe, Asia, America||From £0|
|Exante||Europe, America||From 0.05% (min £1)|
Which one is the best broker for ETFs?
Having covered the best brokers to buy ETFs, let’s have a closer look at each of them.
Is DEGIRO the best ETF broker?
DEGIRO has an abundant offer when it comes to ETFs. It’s important to know that this broker allows you to own actual ETFs (not derivatives), so it’s a good option for investors. Also, there is a selection of ETFs with €0 commissions (but with a handling fee of €1). Worldwide ETFs are charged with a commission of €2 in addition to the handling fee.
Main features of DEGIRO in terms of ETFs:
|Commission per operation||From €0|
✅ Safe, regulated broker
✅ ETFs from all around the world, including commission-free ones
✅ Very friendly and easy-to-use investing platform
❌ Platform lacks advanced analysis tools, but is ideal for beginners
❌ Does not offer a demo account
Is Scalable Capital the best ETF broker?
Scalable Capital offers more than 1,700 traded ETFs, of which over 750 are free. Some of the main categories include sustainability, emerging markets, European, and world ETFs.
Main features of Scalable Capital in terms of ETFs:
|Number of ETFs||Over 1,700|
|Commission per operation||From £0|
✅ Rich educational section, including tutorials and webinars
✅ Essentially a robo-advisor (can use algorithms to trade on your behalf)
✅ ETFs with low commissions and more than 750 free
✅ Great for long-term investment strategies
❌ Yearly fee of 0.75% and 0.16% ETF fee
❌ No leveraged products
Is XTB the best ETF broker?
XTB presents itself as an excellent choice for investors of all types. It provides access to over 150 ETFs without any commissions, with costs limited to the spread. Notably, it enables trading not only European ETFs but also American ones through CFDs. Check out this XTB review for more information.
Main features of XTB in terms of ETFs:
|Number of ETFs||Over 150|
|Commission per operation||£0|
|ETF Leverage||Yes (CFDs)|
✅ Cutting-edge trading platform
✅ 0% commissions
✅ Allows leveraged trading with ETFs via CFDs
✅ No minimum deposit
❌ High spreads on less liquid assets
❌ No real assets (only CFDs)
Is Interactive Brokers the best ETF broker?
The Interactive Brokers platform is renowned for its sophisticated market analysis tools. It boasts an extensive selection of up to 13,000 ETFs, with 150 available for commission-free trading. However, it’s worth noting that the majority of these ETFs are not European. Check out this Interactive Brokers Review for more information.
|Commission per operation||Free for ETFs held for over 30 days|
|ETF Leverage||Yes (CFDs)|
✅ Very well regulated
✅ Large number of ETFs
✅ Competitive broker for advanced investors
✅ Allows trading ETFs with leverage.
❌ Platform is quite complex (especially for beginners)
❌ Commissions payable if you want to sell ETFs within 30 days
Is eToro the best ETF broker?
eToro is unique compared to other ETF brokers on this list in that it allows you to invest in commission-free ETFs directly. You can also trade CFDs on ETFs and take advantage of short-selling or leverage.
Also, eToro has a wide range of ready-made portfolios you can invest in with one click, or you can find an experienced ETF investor on the social trading platform and copy their strategy, thanks to eToro’s copy trading feature. To find out more about copytrading, have a look at this eToro review.
|Number of ETFs||Over 300|
|Commission per operation||$0|
|ETF Leverage||Yes (CFDs)|
✅ Intuitive social trading platform with copy trading ability
✅ Offers both real ETFs and CFDs on ETFs
✅ 0% commissions
❌ Spread fees can be quite high for some illiquid assets
❌ $5 withdrawal fee
Is Exante the best ETF broker?
Exante offers a wide range of ETFs from over 50 markets, as well as a highly customisable platform.
|Commission per transaction||From 0.05% (min £1)|
✅ Good customer service & client manager
✅ Low commissions & reduced spreads
✅ Wide range of assets
❌ High minimum deposit (€10,000)
❌ Does not allow leverage or derivatives
Features of the best ETF broker UK
To be successful in ETF investing, it is essential to have a trusted broker that offers a wide range of options, an easy-to-use investment platform and above all is safe.
Here are some of the most important features of a trustworthy ETF broker you should consider before opening an account.
First of all, it is important to choose a safe and reliable ETF broker. The security of investors’ funds should be an absolute priority for any broker. Therefore, it is not advisable to invest in ETFs from brokers that are not regulated by the FCA or any of the major regulators in Europe, such as BaFIN.
Wide range of ETFs
One of the main benefits of buying ETFs is diversification. Therefore, ETF investors are likely looking for a wide range of ETF options available, which should include:
- Geographical diversity
- Multiple industries and sectors
- Multiple asset classes
A wide range of ETFs is ideal so you can find the right ones for your needs and strategy.
The investment platform must be easy to use and designed to meet the needs of investors in a simple and intuitive way, whether they are beginners or experienced.
Investors should be able to easily navigate the platform and access all relevant information, including details about ETFs, their performance, associated costs, and other relevant details.
Commissions and costs associated with investing in ETFs can significantly reduce long-term returns. It is important to look for an ETF broker that offers low costs compared to other brokers in the market (taking into account trading commissions, administration fees and other associated costs).
Access to information
Finally, the best ETF broker must provide investors with access to all the relevant information about the ETFs in which they are interested. This may include:
- Information about past performance
- Fund’s objectives, risk and return profiles
- List of funds included in the ETFs
- Transparent cost structure
What are the costs of buying ETFs?
When trading ETFs, you should keep in mind that the following costs may apply. First, you need to check what commissions or spreads the broker charges when you buy or sell ETFs, as mentioned in the previous section. Fortunately, most of our listed brokers offer commission-free ETF trading.
Next, you should check the bid-ask spread or the difference between the buy price and the sell price. Generally, the most popular ETFs have the lowest spreads.
Finally, make sure you check all the other broker-related costs, such as maintenance, account opening, inactivity fees, and others.
Regarding the ETF, you should check the expense ratio (not applicable to CFDs because you don’t own the underlying asset). If you buy ETFs directly, the ETF provider will charge you a fee for management and operations. It is usually expressed as a percentage of the total assets under management. This cost is usually deducted from the fund’s returns, affecting your portfolio’s performance.
Finally, you may need to pay taxes when investing in ETFs. This depends on whether you hold the assets in a taxable account, the type of assets in the ETF, and your individual tax situation.
What are the largest ETF providers?
Nowadays, you can find an ETF for nearly any theme, asset, or strategy. However, not all ETF providers have the same assets or generate the same returns.
One benefit of choosing large ETF providers is the liquidity of the asset. This means you will most likely have to cover lower fees than opting for less liquid assets. However, the underlying assets are also important – for instance, an emerging market ETF may have higher costs than one that tracks S&P500.
Next, we highlight the following large asset managers:
- Ishares: It is a BlackRock subsidiary and has 43% of the total assets invested in ETFs worldwide, thus leading the ranking of asset managers that commercialise ETFs.
- Vanguard: It is the world’s largest investment fund manager and second-largest ETF provider. Founded in 1975 by John Bogle, it is based in Malvern (Pennsylvania). Have a look at the best Vanguard ETFs.
- SPDR: It is a family of ETFs traded in the United States, Europe and Asia managed by State Street Global Advisors. Informally, they are called “spiders”. In addition, it is a registered trademark of S&P Financial Services, a subsidiary of McGraw Hill Financial.
- Amundi: It is a French asset management company. It is the second-largest asset manager in Europe and one of the 10 largest asset managers in the world. Have a look at the best Amundi ETFs
- Global X ETFs: It is an exchange-traded fund provider based in New York. Founded in 2008, it has Spanish origins, although most of its presence has been in the United States so far. In the last year, it has begun to expand into Europe. In addition, it is a subsidiary of Mirae Asset Financial Group.
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Summary: best ETF brokers
In summary, when selecting the best broker for ETFs, it is crucial to prioritise factors such as a secure brokerage, a diverse range of ETF options, an intuitive investment platform, competitive costs, and access to essential ETF information for investors.
How can I determine if a broker is secure and trustworthy for ETF investments?
Look for brokers that are regulated by reputable financial authorities, such as the Financial Conduct Authority (FCA) in the UK. Additionally, consider the broker’s reputation, longevity in the industry, and any available client protection schemes they offer.
Are there any specific fees or commissions associated with ETF trading?
Yes, there are certain fees and commissions to be mindful of when trading ETFs. Brokers may charge transaction fees, management fees, or custody fees. It’s essential to review the broker’s fee structure, including any commissions or spreads applied to ETF trades, and compare them across different brokers to make an informed decision.
Can I access comprehensive information about ETFs through the broker’s platform?
Reputable brokers typically provide investors with access to extensive information on ETFs. This includes key details such as the ETF’s holdings, expense ratios, historical performance, and relevant market data.