Always remember that investments can go down as well as up in value, so you could get back less than you put in. A rule of thumb is to hang on to your investments for at least five years to give them the best chance of providing the returns you want.
We’ve compiled a list of the best ETF platforms in the UK. These are our top ten ETF trading platforms for buying, selling, and holding UK ETFs, ETF CFDs, index funds, and other investment products.
Please remember that when you invest, your capital is at risk. ISA, pension, and tax rules also apply.
The ETF trading platforms listed below are authorised and regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA).
Here are the best ETF platforms in the UK:
XTB is a user-friendly, fully-customisable European trading platform renowned for its extensive CFD and forex trading offerings. XTB provides traders instant access to hundreds of global markets and over 5,600 instruments, including UK and overseas stocks and shares, ETFs, forex, indices, commodities, stock CFDs, and ETF CFDs.
With XTB, you can trade using the in-house trading software, xStation, or via MetaTrader 4 (MT4). xStation by XTB is a powerful trading software available on iOS, Android and desktop devices and suitable for both beginners and advanced traders. The xStation software gives you access to comprehensive charting and risk management tools. With the inbuilt trading calculator, you can easily estimate costs, profits or losses before opening a position, modify stop loss and take profit orders directly on the chart or close all positions with a click of a button. XTB also provides an extensive library of educational materials, including videos, webinars, and courses suitable for both beginners and experienced traders. When you sign up, you will have access to a dedicated account officer who will work with you to help you better understand your needs and how XTB operates.
It is free to open a trading account with XTB, and all users have access to a free demo account with £100,000 in virtual funds that you can use to practise trading and investing until you become confident enough to use real money. Deposits in GBP and EUR are free of charge, but withdrawals below £60 have a £12 processing fee. Real stock trading is commission-free for monthly turnovers up to €100,000 (£85,000). Transactions above this limit will attract a commission of 0.2% (minimum €10 (£8.50). Stock and ETF CFD trading are also commission-free. Spreads and margins apply to other products. Inactive accounts attract a monthly fee of €10 (£9). Other fees apply. For more information, visit XTB. XTB does not offer an ISA or SIPP.
Please note: Contracts for Difference (CFDs) are leveraged products and carry a significant risk of loss to your capital, as prices may move rapidly against you, and you may be required to make further payments to keep any trades open. Between 74 and 89% of retail investor accounts lose money when trading CFDs. These products are not suitable for all clients. Therefore, please ensure you fully understand the risks and seek independent advice.
Interactive Investor is a subsidiary of wealth management giant Abrdn and the second-largest investment platform in the country. Also well known for its fixed monthly subscription fees (as opposed to annual percentage-based fees like most other investment platforms), Interactive Investor has been providing investment services and financial information to UK customers since 1995.
If you choose to invest with Interactive Investor, you will gain access to over 40,000 investment options, including UK and overseas shares, funds, investment trusts, and ETFs. This is the second-widest choice of UK and international investments offered by an investment platform in the UK. Interactive Investor allows you to build your portfolio in multiple ways depending on your investment goals, attitude to risk and personal preferences. Beginner investors or those who prefer ready-made investments can build their portfolios using Interactive Investor’s Quick-Start Funds, an easy way to start investing where you choose from six low-cost funds prepared by the team of experts at Interactive Investor. Advanced or more confident investors can choose from a wide range of funds and shares and build their portfolios themselves. Interactive Investor gives you access to 17 global stock exchanges, including exchanges in North America, Europe and Asia Pacific. These include markets such as the FTSE 100, FTSE 250, FTSE All-Share, S&P 500, NASDAQ, NYSE, Dow Jones and more. In addition to the above, Interactive Investor offers Japanese, Indian and Chinese shares in the form of American Depositary Receipts (ADRs).
Interactive Investor gives you a free trade every month, which you can use to buy or sell any investment. After that, trades usually cost £3.99. For those investing £50,000 or less, you can sign up for the cheapest plan (Investor Essentials), which costs only £4.99 a month but does not come with the monthly free trade. The platform also offers a free regular investing service that allows you to deposit as little as £25 a month towards your investments without paying a trading fee each time, irrespective of the plan you choose. Interactive Investor also has lots of expert ideas, research and insights, which can be helpful when selecting investments. Interactive Investor’s suite of products includes a Trading Account, Stocks and Shares ISA, SIPP and Junior ISA.
Capital at risk.
InvestEngine is a low-cost ETF investment platform that provides a choice of managed portfolios tailored to you and commission-free DIY investing to help you build long-term wealth. Users can invest in over 500 exchange-traded funds (ETFs) from leading global asset managers.
With InvestEngine, you can invest in two ways depending on your tolerance for risk and savviness as an investor: beginner investors or those who prefer a ready-made investment portfolio can select from one of the managed portfolios on offer, where the team of experts at InvestEngine will take care of the day-to-day investment decisions for you. These portfolios are a selection of ETFs based on your preferences and risk tolerance. Once you’ve selected one, you do not have to do anything else besides monitor the performance of your investments. Advanced or more confident investors can choose from 500+ commission-free ETFs and build their portfolios themselves. InvestEngine also offers fractional investing, which allows you to buy bits and pieces of an ETF with as little as £1. This enhances your ability to build a diversified portfolio even if you have a small amount of money to invest. With the DIY Portfolio, there are no platform fees. However, the managed portfolios attract a fee of 0.25% per year. All InvestEngine portfolios are free of set-up fees, dealing fees, ISA subscription fees or withdrawal fees.
InvestEngine stands out amongst its competitors as one of the cheapest trading platforms in the UK because it charges no platform or management fees on its DIY Portfolio and just 0.25% a year on its managed portfolio. You can also start investing with as little as £100. InvestEngine’s suite of products includes a Stocks and Shares ISA, Personal Account and Business Account.
Capital at risk.
AJ Bell is one of the UK’s largest online investment platforms, and its mission is to make investing as easy as possible for anyone. The platform offers thousands of investment options for the DIY investor, including shares, funds, bonds, investment trusts, ETFs, ETCs, and warrants.
There are multiple ways to get started with AJ Bell, depending on your risk tolerance and investing savviness. Beginner investors or those who prefer to choose a ready-made investment portfolio can get a little, or a lot, of help from AJ Bell’s specialists by selecting one of the investment ideas on offer. Investment ideas are diversified ready-made baskets of investments that you can select based on your personal preference and attitude to risk. There are eight total investment ideas, each built by a specialist team, and you can pick the right one for you depending on whether you are seeking to simply grow your money over time or receive an income whilst still growing your money. Expert investors can take advantage of the stock and fund screeners and complex instruments available on AJ Bell and build their portfolios themselves.
AJ Bell charges an annual platform fee ranging from 0.25% to 0%, depending on the size of your portfolio. Dealing fees for buying and selling investments online are £1.50 for funds and £9.95 for shares (reducing to £4.95 if there were 10 or more online share deals in the previous month). AJ Bell’s products include a Share Dealing Account, Stocks and Shares ISA, Junior Stocks and Shares ISA, Lifetime ISA, SIPP and Junior SIPP.
Capital at risk.
eToro is a multi-asset trading platform that offers both investing in stocks and cryptoassets, as well as trading CFDs. With eToro, UK traders have real-time access to thousands of stocks, ETFs, indices, commodities, forex, cryptocurrencies, and NFTs from top exchanges worldwide. Catering to beginners and expert traders, eToro provides an impressive range of fundamental and technical analysis tools, including market news, economic data, social media trends, news sentiment trends, and advanced charting tools. ProCharts, a professional-grade technical analysis tool available on eToro, allows users to compare charts from different financial instruments and time frames. eToro also offers risk management tools, such as Stop Loss, Take Profit, and Trailing Stop Loss, to help you better manage your positions and protect your investments.
For customers who prefer ready-made investment portfolios, eToro has over 40 fully allocated, balanced investment portfolios, focusing on market segments you can understand and relate to. Some of the portfolios include MetaverseLife, BigTech, GoldWorldWide, Vaccine-Med, BitcoinWorldWide, Diabetes-Med, Driverless, and GigEconomy. These portfolios are a grouping of several assets, such as stocks, cryptocurrencies, ETFs, and even people, bundled together based on a predetermined theme or strategy. eToro also offers Copy Trading, a unique feature that allows everyday investors to copy the trades or investments of top-performing traders on the eToro platform. Anyone can copy trades on eToro; likewise, anyone can give others access to copy their trades. If you are an expert trader approved to participate in eToro’s Popular Investor Program, where others copy your trades, you will be eligible to receive monthly earnings.
It is entirely free to open an account with eToro, and all registered users receive a US$100,000 demo account for free, which you can use to practise trading until you become confident. Trading on eToro occurs in USD, so a currency conversion fee will apply if you deposit or withdraw in a currency other than USD. Withdrawals incur a fee of US$5 (£4), and the minimum withdrawal amount is US$30 (£24). For UK customers, eToro offers an eToro Money app that allows you to convert your GBP to USD free of charge, thereby reducing your foreign exchange costs. eToro does not offer an ISA or SIPP.
Please note: Your capital is at risk. 80 - 90% 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. Additionally, cryptoassets are highly volatile and unregulated in the UK. No consumer protection. Tax on profits may apply. Copy Trading does not amount to investment advice. Other fees apply. For more information, visit eToro.
Freetrade is a mobile trading app that gives you access to thousands of UK and overseas stocks, ETFs, REITs, and investment trusts covering different sectors and markets worldwide. The Freetrade app can be accessed on iOS, Android and desktop devices and offers a slick and easy-to-use user interface and experience. The app is a great choice for both beginners and experienced investors.
With Freetrade, you can invest in fractional shares of even the most expensive US shares with as little as £2. Depositing, trading and withdrawing on Freetrade are commission-free (other charges may apply). FX rates apply to US stocks at the spot rate + 0.99%. To get the most out of Freetrade, you can choose from three subscription plans. The Basic Plan costs £0.00 per month and allows you to open a General Investment Account (GIA) and trade commission-free. The Standard Plan costs £5.99 per month and allows you to open a Stocks and Shares ISA in addition to your GIA. With the Plus Plan at £11.99 a month, you get a Self-Invested Personal Pension (SIPP) and a Stocks and Shares ISA in addition to your GIA. Dealing on Freetrade is commission-free, irrespective of the subscription plan you choose. Freetrade’s suite of products includes a Stocks and Shares ISA, General Investment Account (GIA) and SIPP.
Promo: Get a free share worth £10 when you join Freetrade and fund your account with at least £50.
Please note: When you invest, your capital is at risk. The value of your investments can go down as well as up, and you may get back less than you invest. ISA rules apply. SIPP eligibility and tax rules apply. Free share terms and conditions apply.
Founded by ex-Wise (TransferWise) employees, Lightyear is a new low-cost pan-European investing app on a mission to provide everyone friction-free access to the international financial markets. With Lightyear, you can invest in over 3,500 UK and overseas stocks and ETFs and access real-time market data and live news while managing your investments in multi-currency accounts. The Lightyear multi-currency accounts allow you to earn competitive interest on uninvested cash in pounds sterling, euros, and US dollars and save on foreign exchange costs by holding your investments in their local currencies. Users can have balances in all three currencies at the same time, and there is no fee for opening a multi-currency account.
The Lightyear mobile app, available on iOS and Android devices, is simple yet powerful. Users can access market updates, professional analyst ratings and price targets via a clean and user-friendly interface. You can also tune in to earning calls directly from your mobile phone or web browser and enjoy keeping up-to-date with the latest happenings about the stocks you own or follow.
Opening an account with Lightyear is free, and you can start building a portfolio with as little as you are comfortable with. Dealing UK, US, and EU shares cost £1, 0.1% (up to $1 max), and €1 per order, respectively. There is no dealing charge for trading ETFs. However, a 0.35% FX fee applies when converting one currency to another. Lightyear also charges a 0.5% transfer fee when depositing with your card (after exhausting the free £500 lifetime allowance). However, there are other means of depositing funds that are completely free. Other fees may apply. Lightyear does not offer an ISA or SIPP.
Capital at risk.
Bestinvest is a UK low-cost investment platform that allows you to trade or invest in over 3,000 instruments, including shares, funds, ETFs, and investment trusts. With Bestinvest, you can build an investment portfolio in two ways depending on your personal preferences, goals and attitude to risk.
Beginners or those who prefer a ready-made investment can build their portfolio by selecting one of Bestinvest’s ready-made investment portfolios. These off-the-shelf style portfolios are created and managed by the team at Bestinvest and come with a carefully selected and diversified collection of investments. Once you have picked one, you do not need to do anything else. There are three ranges to choose from: Expert, Smart and Direct, depending on whether you want to maximise the returns for the risk you take, focus on cost-efficiency or focus on individual investments. The team at Bestinvest will walk you through the process of selecting a ready-made portfolio. Advanced or more confident investors can choose from a wide range of funds, shares, ETFs and ITs and build their portfolios themselves.
To start building your portfolio with Bestinvest, you can deposit a lump sum or set up a monthly savings plan (which allows you to automatically save or invest a set amount into your investment account every month). There are no set-up fees or fund dealing charges with Bestinvest. Bestinvest charges an annual platform fee ranging from 0.40% to 0% for DIY investing and 0.20% to 0% for ready-made investing. The dealing fee for buying and selling shares online is £4.95 per deal. Bestinvest’s suite of products includes a Stocks and Shares ISA, Junior Stocks and Shares ISA, General Investment Account, SIPP and Junior SIPP.
Capital at risk.
Hargreaves Lansdown, a FTSE 100 company and the UK’s largest investment platform, is one of the best share dealing accounts in the UK. Although not the cheapest, it compensates with unrivalled stock research and trading tools, prioritising long-term client relationships and financial security. There is almost no stock, fund or investment trust you cannot find on Hargreaves Lansdown, along with detailed information on fund composition, performance data and advanced charting. With Hargreaves Lansdown, you can access over 15,000 instruments, encompassing over 2,500 funds, UK and overseas shares, bonds, ETFs, ETCs, investment trusts and more.
With Hargreaves Lansdown, you can build your investment portfolio in three ways. You can pick your own investments to match your values and goals, select ready-made portfolios, or pay a financial adviser to choose investments for you. The ready-made portfolios can be used as all-in-one investments. Pick one from the different risk levels, and you are good to go. You will still have to monitor your portfolio as with any other investment. If you pay for financial advice, the specialist investment adviser will recommend a suitable portfolio of investments for your goals and ensure that your portfolio is cost-effective, well-balanced, diversified, and ideal for your stage in life. Advanced or more confident investors who want to pick their own investments can choose from a wide range of funds, shares and other investments and build their portfolios themselves.
Hargreaves Lansdown does not charge a platform fee on its Fund and Share Account but charges 0.45% (capped at £45) a year on its ISA and 0.45% (capped at £200) a year on its SIPP. It offers most products, including a Fund and Share Account, Stocks and Shares ISA, Lifetime ISA, Junior ISA, and SIPP. These services are intended for investors who are happy making their own decisions.
Please note: Your capital is at risk. The fees quoted here are not exhaustive. Other charges apply.
Saxo Markets is the UK division of Saxo Bank, a large European bank that allows you to invest in 71,000+ financial products from stock markets worldwide. With Saxo Markets, you can invest in UK and overseas stocks and shares, bonds, ETFs, forex, CFDs, futures, commodities and options.
Saxo Markets allows you to invest in one of two ways depending on your investing savviness: Beginner investors or those who prefer to choose a ready-made portfolio can select from one of the managed portfolios on offer where Saxo experts navigate the markets and manage your investments on your behalf. The average cost of this managed portfolio is 0.95% per year (including fund costs). Advanced or more confident investors can choose from the range of financial products on offer and build their portfolios themselves. Saxo Markets traders benefit from extensive charting with 50+ technical indicators, integrated trade signals, news feeds and risk-management features via the SaxoTraderGO platform. Advanced traders can access even more sophisticated trading features on SaxoTraderPRO, Saxo Bank’s desktop-only advanced trading platform.
Saxo Markets has different transaction fees grouped into trading tiers. If you plan to trade high volumes, you can upgrade your tier to get lower transaction fees. The Classic tier, which attracts the highest trading fees, costs 0.10% (min. £8) per deal for UK Stocks and US$0.02 (min. US$10) per deal for US Stocks. Other fees apply. Saxo Markets’ suite of products includes a Trading Account, Stocks and Shares ISA and SIPP.
Please note: Capital at risk. 65% 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.
An ETF is an investment fund that trades on an exchange like an individual stock. An ETF will typically track a particular index, sector, commodity, or asset.
When an investor is looking to purchase shares in an individual company such as Apple or Tesla, they buy this through their investment platform or trading app, which is connected to a stock exchange.
Apple is listed on a stock exchange in the USA known as the NASDAQ. If you want to purchase some Apple shares, you will place the order through your app or platform. They would then pass the order through the NASDAQ exchange to purchase the shares for your account from another investor selling Apple shares simultaneously.
An ETF is an investment fund that is traded in the same way. ETFs are listed on a specific stock exchange, such as the NASDAQ, the New York Stock Exchange or the London Stock Exchange, and buyers and sellers can trade them directly.
Rather than investing in a single stock, an ETF will hold hundreds or even thousands of different individual companies or investments. When you buy an ETF, you are investing in multiple companies in a single sector or geography or across various industries and geographies.
Let’s start with the basics. Before we explain how an ETF works in more detail, we need to take a step back and start with the F in ‘Exchange Traded Fund’.
An investment fund (or fund) is essentially a pool of investors’ money. It is run by a professional investment company that offers to invest people’s money in a certain way. Say, for example, an investment manager decides to start a fund called the Big Investment Automotive Fund to invest in car companies. Investors could hand over their money to the investment manager, who would then combine all of this cash and allocate it to companies like Ford, GM, Tesla and Volkswagen.
Not only will the fund specify the type of investments it will hold (such as car companies), but it will also specify the strategy it plans to use to generate returns. This could be an income strategy that focuses on companies that pay consistent dividends, a high-growth strategy which aims to find smaller companies with big growth potential, or a strategy that focuses on something else entirely.
There are funds for just about any type of investment you can imagine. Some of them are very specific, like the automotive example above. Some are broader, such as investing across the entire UK or US stock market. Some are much broader, investing across the whole “world” stock market.
Stocks make up a significant component of fund investment, but there is a huge variety of fund options for other asset classes too. Examples include bonds or fixed interest, real estate, infrastructure, gold and even cryptocurrencies like Bitcoin and Ethereum.
These funds allow any investor to purchase a portion of the fund, regardless of whether they have £100 or £1 million to invest. The best ETF brokers in the UK will allow everyday investors to buy UK ETFs with as little as £25 a month. Some even accept a £1 initial deposit.
Now you understand that an investment fund is a pooled pot of money invested in a specific way by a professional fund manager. But what about the ‘Exchange Traded’ part of the ETF acronym? All this means is that the ETF can be traded on a stock exchange, just like a regular single share in a company.
Investment funds were traditionally only able to be bought and sold directly from the fund manager and only priced at the end of each day.
For example, if you wanted to buy a fund, you would register with an investment app or platform where you would be able to buy units of a fund based on the next available closing day price. With an ETF, you can buy and sell every minute of the trading day and hold multiple different ETFs on your trading app or platform.
We will get into the specifics of the pros and cons of each next, but really the differences are not that significant. Large investment houses will often offer both a traditional fund and an ETF of the same fund.
The advantages of buying ETFs in the UK are diversification, low cost, liquidity, easy access to international markets and professional management. On the other hand, the disadvantages of buying ETFs are lack of choice and control, ongoing charges, market risk and tracking errors.
Here is a breakdown of the pros and cons of investing in ETFs:
Choosing the right ETFs can be a daunting task, especially with the vast array of options available in the UK market. ETFs are known for their simplicity, diversification, and cost-effectiveness, which makes them a popular choice among investors.
To help you make an informed decision, we have outlined some key factors to consider when selecting ETFs in the UK:
You can buy ETFs in the UK from investment platforms such as XTB, Interactive Investor, InvestEngine, and Vanguard. These platforms not only facilitate the purchase of ETFs but also provide the resources, guidance, and educational materials needed to create an investment portfolio, regardless of your level of experience or investment know-how.
Follow the steps below to buy ETFs in the UK:
ETF fund managers charge for their services the same way that almost every investment fund does. That is, they charge investors a percentage of the value of the money that they look after. This fee can vary pretty widely, from as low as 0.04% to over 2.00% for more niche or exotic ETFs.
This means that if an ETF were charging 0.25%, an investor with an average balance of £20,000 would pay annual fees of around £50. Pretty good value to have a professional manager run your portfolio for you.
Keep in mind that the ETF fee is just one of the types of charges that you could incur. Some platforms also charge you money to hold funds or to trade as well, though there are a number of free options available to investors these days.
Here is a breakdown of some of the fees you could incur when buying ETFs:
Bear in mind that while fees are a crucial factor in choosing an ETF, they are not the only one. You should also consider the ETF’s performance, the assets it holds, its risk profile, and how well it fits into your overall investment strategy. With the continued growth of the ETF market, a plethora of cost-effective options are available to today’s investors, some of which you can find in the list above.
The cheapest ETF trading platforms in the UK are XTB, InvestEngine, Vanguard, and Bestinvest. These platforms do not charge a fund dealing fee, so you only ever pay the platform fee and fund manager costs. Other fees may apply.
Yes, you can invest in only ETFs. However, most investment platforms or trading apps will allow you to invest directly in stocks alongside ETFs if you want to. This means you can have a portfolio that is only ETFs or a mix of ETFs and individual company shares.
Yes, ETFs are an excellent way for beginners to invest. They provide access to professional investment managers at a very reasonable cost and allow for much greater levels of diversification, even with small amounts of money.
You can start with as little as one ETF, as some of them invest all across the world and in a range of different asset classes. These are known as Multi-Asset or Global ETFs and are based on the level of risk you want to take with your money, from low to moderate to high.
Yes, some ETFs pay dividends. ETFs usually offer an Accumulation or Income version of the fund. Both will receive dividends from the companies they hold, but only the Income version of the ETF will automatically pay these out to investors. The Accumulation version will instead automatically reinvest the dividends into the portfolio. This reinvestment strategy is great for long-term gains as it increases the size of your portfolio and you enjoy the benefits of compound interest. If you want to receive dividends from your ETFs, you should buy UK ETFs of the Income class.
Here are the best ETF brokers in the UK:
Generally speaking, ETFs are safer than stocks. ETFs will almost always mean greater diversification for an investor. This means your money is spread further, which reduces the chance of a small number of bad apples ruining an entire portfolio.
The main downside of investing in ETFs is that there is an ongoing fee in addition to the ETF platform charge payable to invest in them. Additionally, the price of ETFs, like any other investment, can fluctuate over time, and you could get less than you initially invested.
You can buy ETFs as often as you like. Most people buy ETFs once a month, immediately after receiving their salary. This is a common ETF investing strategy known as “pound-cost averaging” or “dollar-cost averaging”. It is when an investor invests small amounts of money at regular intervals (e.g. monthly or biweekly) regardless of the price of the ETF at that time. This helps to average out the cost of buying the ETF over time and reduces the risk of investing a large sum at a high price.
The best ETF trading platforms in the UK will allow you to set up a direct debit or standing order to automatically buy a set amount of an ETF every month or as frequently as you can afford to. With pound-cost averaging, you automatically “buy the dip” when markets crash and can smooth out long-term returns.
Here’s an example:
Say an investor wants to invest £10,000 in an ETF. Instead of investing all £10,000 at once, they decide to invest £1,000 every month for 10 months. If the stock price is £100 in month 1, £120 in month 2, £90 in month 3, and so on, the average cost of buying the stock will be lower compared to if they had invested all £10,000 at once when the price was £100.
An ETF’s expense ratio is another name for the fees charged by an ETF fund manager. The figure is expressed as a percentage of an investor’s daily average balance, and can range from 0.04% to over 2.00%.
Every month, we’ll send you The Plug - a curation of the best personal finance content in the UK. We share real-life stories, how-to guides, top personal finance news, popular community questions, and tips to help you stay on top of your money.