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ETFs Exchange Traded Funds are increasingly popular around the world. One of the reasons for this is that trading them has become extremely easy.

When explaining what an ETF is, you can think about it as a fund that owns an index. 

It makes them unique because they are traded on exchanges like regular stocks, allowing investors to buy and sell their shares throughout the day without dealing with brokers or advisors.

Some well-known examples of ETFs include well-performed funds such as VTI (USA), EWU (Japan) or ITOT (Canada).

The first step into the world of ETF Fund Trading should be deciding whether you want to use your bank account, an FCA-registered adviser or an online fund shop.

We’ll break down each option here: 

Online Fund Shops 

This is the most accessible way to get into ETF trading as you only require your bank details and proof of address. 

Brokers are known to charge up to £30 per trade, making this option very interesting for those wanting lower costs. 

The downside to that is you won’t have access to financial advice, so it can be complicated to solve it on your own if something goes wrong. 

It means that if you’re new to ETFs, then we’d advise going through a broker who will help you gain knowledge on ETFs.

We can highly recommend Interactive Investor. 

We have been using them for a few months now, so their customer service experience is still fresh in my mind. 

They have a free-to-use website and a simple investment process that allows new investors to get started on their journey of Fund Trading quickly. 

Overall we would give them 5/5 for being an honest online Fund Shop with excellent customer support.

Getting registered with Interactive Investor is as easy as opening an online account and entering personal details.

How it works

To deposit funds into the fund shop, you need to go through your online bank system and follow the steps to get started.

On top of this, they have an extensive collection of articles that you can access at any time. 

Some examples include how to trade, research, and what types of ETFs there are on offer. 

These resources allow new investors to learn more about Exchange Traded Funds before starting their first trade. 

With Interactive Investor, we recommend joining through this link to get 150% in free trades for six months (with no deposit required).

How much will I pay in fees?

Essential portfolios do not incur any fees, but if you want access to more funds and tools, it might be worth looking into the services they provide. 

One great example is their top-5 fund portfolios which allow you to access some of the best funds on the market. With things like this, prices can vary.

FCA Registered Advisers

If you are planning to go down the road of ETF Fund Trading with financial advice, then chances are your options are limited as new investors should go through a fund shop. 

These advisers will be able to help you select the right investment products depending on what your specific goals and objectives are.

Their fees can range from just under 0.35% of your assets per year up to around 1%. 

If your online account has £100,000, they will charge just under £350 for managing these assets during that period. 

This figure is very standard in the investment management industry and gives you advice on managing your assets best. 

It is precious for new investors who are trying to minimize their fees by learning about what ETFs are and how they can impact their portfolios.

The big downside here is that it’s difficult to get hands-on experience with these types of advisers. 

On top of this, the process of getting registered with one requires a fair amount of work as you need to provide information regarding your employment history and income levels along with bank statements.

Link to Saxo for more information.

 

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