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.
To invest in ETFs in the UK, you’ll need to open an investment account with a stockbroker or investment platform, such as XTB, Interactive Investor, AJ Bell, InvestEngine, or Vanguard. These platforms not only facilitate the buying and selling 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.
Invest in ETFs With 0% Commission!
Capital at risk. Other fees may apply.
Follow the steps below to buy ETFs in the UK:
We’ve compiled a list of the best places to buy ETFs in the UK. These are the best ETF brokers, investment apps, websites and fund supermarkets for buying, selling, and holding 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 platforms listed below are authorised and regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA).
Here are the best places to buy ETFs 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.
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.
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.
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.
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.
Vanguard is a low-cost investment platform with over 75 own-brand funds, including ETFs, active funds and index funds. Vanguard does not offer stocks and shares, but there are various ETFs on offer for those interested in exchange-traded securities. The Vanguard stocks and shares ISA allows you to build an investment portfolio in two ways depending on your investing savviness: Beginner investors or those who prefer to choose a ready-made investment portfolio can build their portfolio by selecting one of Vanguard’s ready-made portfolios, which give you access to thousands of bonds and shares in a single investment. Advanced or more confident investors can choose from over 75 individual Vanguard funds and ETFs and build their portfolios themselves.
To open a Vanguard stocks and shares ISA, you need at least £100 per month or a lump sum of £500. There is a yearly management fee of 0.15% (capped at £375) per year. Some of the funds on offer have separate charges, so please check these before investing. Vanguard’s suite of products includes a Stocks and Shares ISA, Junior ISA, General Account and SIPP.
Capital at risk.
Picture yourself at a lively farmer’s market. Instead of individually picking each apple, tomato, or pear, you could simply grab a pre-packed basket filled with a wide variety of fresh produce. In the financial world, an ETF, or exchange-traded fund, is quite like that basket.
An ETF is a collection of different assets, such as stocks, bonds, or real estate. Now, imagine if the farmer’s market had a master list of top-quality produce compiled by seasoned grocers. If we call this list an “index,” a typical ETF could be seen as a basket that mirrors the assortment on that list.
In financial terms, an index is a selected portfolio of stocks representing a particular segment of the market. For instance, an index could consist of large companies, small companies, companies within a certain industry, or companies from a specific country. A well-known index is the FTSE 100, which includes 100 of the largest companies in the UK. Another renowned index is the S&P 500 from the US, which consists of 500 of the largest US companies.
Some ETFs aim to track the performance of these indices. So, if you invest in an ETF that shadows the FTSE 100 or the S&P 500, you are essentially buying a small portion of each of those companies in the index.
However, ETFs aren’t limited to just passively tracking an index. Some ETFs are actively managed, meaning they have a portfolio manager who makes decisions about which assets to buy or sell within the ETF. Their goal is to outperform the index, which is like having a skilled farmer hand-select the best produce to surpass the quality of the pre-made basket.
And here’s the twist: ETFs aren’t just about stocks. They can also encompass bonds (loans to governments or corporations), real estate, and even a blend of these.
So when you invest in an ETF, whether it’s passively tracking an index or actively managed, you’re spreading your risk and potential returns across a range of assets, from different companies to various types of financial instruments. It’s like enjoying an array of produce from the farmer’s market without having to buy each item separately!
Carrying forward our farmer’s market metaphor, let’s say you wanted to try all the market had to offer but only had a limited budget. Would you spend all your money on just the apples, or would you rather grab that diverse pre-packed basket to get a taste of everything? If you chose the latter, you’ve just grasped one of the main reasons to invest in ETFs!
In essence, investing in ETFs is like shopping at the farmer’s market with a discerning eye, a constrained budget, and a big appetite. You get to sample a wide variety of assets, have the flexibility to adjust your investment, and can access far-reaching markets cost-effectively. What’s not to love about this financial smorgasbord?
Heading back to our bustling farmer’s market, let’s consider two different ways to sample the produce. You could pick up our pre-packed basket (our ETF) that you can buy or sell at any time during the day. Or you could join a daily harvest program (an index fund) where you pay in the morning and receive a similar basket of varied produce at the end of the day. Both baskets offer a wide variety of goods, but the way you buy, sell, and receive them differs. This is quite like the choice between ETFs and index funds in the investment world.
Choosing between an ETF and an index fund is like choosing between our farmer’s market basket and daily harvest program. The right choice depends on your individual needs and circumstances, whether that’s the flexibility to trade throughout the day, a lower initial investment, cost considerations, or how you’d like to receive dividends. Each offers a way to sample the whole market. Your choice boils down to how you prefer to take your financial bite of that delicious investment pie.
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 choosing ETFs in the UK:
There are two ways to build a portfolio of ETFs. The first is by creating your own version of Bogleheads’ three-fund portfolio, and the second is by simply investing in an ETF that tracks the whole world.
A three-fund portfolio is a simple passive investing strategy that involves investing in three types of ETFs or index funds with a long-term horizon of at least 20 years.
The three funds are typically:
Here is an example of how this could look in practice:
Fund 1 could be an ETF that tracks the local UK market, i.e. a fund that tracks the FTSE UK All Share Index.
Fund 2 could be an ETF that tracks the global market (developed world + emerging market) or US “total” stock market. For example, a fund tracking the S&P 500 Index.
Fund 3 could be an ETF that tracks the performance of UK government bond indices such as the Bloomberg UK Government Inflation-Linked Float Adjusted Bond Index.
Once you’ve chosen your ETFs, you have to adjust the allocation of each fund based on your risk tolerance. For instance, a risk-averse investor might hold a portfolio heavily tilted toward bonds. Similarly, someone bullish on the US or an emerging market like China might hold a portfolio that disproportionately favours a US or global ETF. Finally, if you would like a great deal of “home stocks” in your portfolio, you might allocate the largest portion of your portfolio to the UK ETFs.
Other factors to consider when building an ETF portfolio include your current age and how long you plan to hold the ETFs. You should also consider the previous performance of each ETF while keeping in mind that past performance is not a reliable indicator of future results.
The Bogleheads’ three-fund portfolio was originally created by Bogleheads in America.
If you are the kind of investor who would prefer a single ETF to set and forget rather than invest in multiple ETFs, a global index tracker ETF might be a good choice for you.
Global index tracker ETFs track the performance of companies worldwide, ranging from developed countries to emerging markets.
When you buy an ETF that tracks a global market, you gain exposure to companies in the US, the UK, other developed countries, and even emerging markets like Latin American countries. Global index trackers are an excellent choice for people who want a highly diversified portfolio without limiting themselves to the domestic and US markets.
Our vibrant farmer’s market, brimming with all its diverse and delightful produce, has served us well so far in explaining ETFs. But like any marketplace, it comes with its advantages and drawbacks. Let’s use it once more to delve into the pros and cons of ETFs.
All things considered, like our mixed basket at the farmer’s market, ETFs offer a variety of advantages such as diversification, trading flexibility, and potentially lower costs. However, potential drawbacks like trading costs, liquidity issues, and tracking errors are akin to the occasional overripe fruit in the basket. Understanding these pros and cons can help you make informed decisions when adding ETFs to your financial meal plan.
Let’s delve into some common ETF fees you might encounter. The specifics of an ETF’s charges can always be found in its Key Investor Information Document (KIID).
Pro Tip: Fixed fees tend to work out cheaper for people investing high amounts, while percentage-based fees can be more cost-effective for those with less to invest.
Here’s a breakdown of the fees you typically pay when investing in ETFs in the UK:
To buy ETFs in the UK, you need to:
An S&P 500 ETF can be a good investment, especially for those looking for broad exposure to the US large-cap equities market. It is diversified across 500 of the largest US companies, reducing individual company risk. However, as with any investment, you should consider their risk tolerance, investment goals, and market conditions.
Here are the top 10 UK ETFs to invest in, along with their respective ongoing charges figure (OCF):
To view the comprehensive list, see Best ETFs in the UK.
ETFs can be an excellent choice for beginner investors due to their diversification, lower costs compared to many mutual funds, and ease of trading. They offer a simple way to gain exposure to a wide range of assets, sectors, or regions, reducing the need for extensive individual stock research.
The number of ETFs a beginner should own varies based on individual financial goals, risk tolerance, and investment size. However, a diversified portfolio can often be achieved with as few as three to five different ETFs that cover different asset classes and sectors.
The amount to invest in an ETF for the first time depends on your financial situation and investment goal. Some brokerages allow investors to purchase ETFs for the price of one share, which could be as low as £50 to £100. Others, such as InvestEngine or Freetrade, offer fractional ETF investing or a monthly savings plan which allows you to invest as little as £10 into your choice of ETFs every month. Remember, when it comes to investing, it is crucial to invest only what you can afford to lose.
The frequency of investing in an ETF depends on your investment strategy. Some investors prefer a “buy and hold” strategy, investing a lump sum and letting it grow over time. Others might opt for a “pound-cost averaging” strategy, consistently investing a fixed amount at regular intervals, regardless of the ETF’s price.
In the UK, any gains from ETFs are potentially subject to Capital Gains Tax, and dividends may be subject to Income Tax. However, if held within a tax-efficient wrapper like an ISA or a SIPP, gains and income from ETFs can be tax-free. Always consult a tax adviser for your specific situation.
You can buy ETFs in the UK from the following ETF brokers:
Yes, many ETFs do pay dividends. They are typically paid out to investors from the income received from the underlying assets. These can be either distributed (paid out to the investor) or accumulated (reinvested back into the ETF), depending on the type of ETF. Always check the dividend policy of an ETF before investing.
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