InsideBitcoins.com

Best ETF Brokers : ETF Trading Platforms Comparison 2020

We review the top ETF brokers for 2020 for online investing.
Avatar
Author: Patrick Webber
Last Updated: 19 June 2020

Whether you are a newbie in trading or an experienced trader, ETFs are a great way to invest in a specific market, industry, region, or classification of assets. Though you can start investing in ETFs by opening an investment account with an investment provider that connects you to a stock exchange, there’s a much better way to do it – through the Contract for Difference (CFD) market.

In this guide, we’ll explain what are ETF’s, what to look for in an online ETF broker, what is the most recommended way to get exposure to ETFs and review the top 5 ETFs brokers that offer Exchange Traded Funds (ETFs).

On this Page:

    What to Look For in an Online ETF Broker

    There are several aspects you must consider before you choose a broker dealer ETF:

    • Safety and regulation: Trading with a regulated online broker should one of the key factors to determine your preferred broker. A regulated broker ensures your funds are held in a safe account and you will be compensated in the event of a default. 
    • Usability (Trading Platform): Some brokers offer a unique and easy-to-use user interface designed for beginners while other brokers offer a service whereby you can get access to a more professional trading platform. You should consider your needs to determine the best broker for you to trade with and the broker that offers the best ETFs screener and best ETFs research tools. f
    • Selection of ETFs: Obviously, the more the merrier. A higher selection of Exchange Traded Funds will help you diversify your portfolio.
    • Fees: ETFs fees are one of the most important factors when you choose a broker. While traditional brokers charge management fees and brokerage fees which can be significant, the majority of CFD brokers do not charge any trading fees rather than buy and sell spread. 

    Obviously, the factors above are key to ensuring you find the most reputable and reliable broker to help you get started investing in ETFs. CFD brokers provide a great selection of ETFs assets the same as traditional brokers, but usually charge lower fees, an advanced trading platform, and trading tools. Here are the best online brokers for ETFs in the market:

    1. eToro: Best Overall ETF Broker

    Since its foundation in 2006, eToro has developed an advanced social trading platform that enables users to connect with each other and automate their trading by copying trades of other top-trader in the community. The eToro platform is, without a doubt, the ideal platform for beginners though it works pretty well for professional traders as well.

    eToro offers a variety of 145 popular ETFs on its platform, which are classified into various markets and industries. Take note that ETFs trading through eToro is commission-free, meaning there are no management fees, no ticket fees, and no rollover fees. eToro is the world's leading social trading platform which means you will be able to connect with other traders, see posts, updates, and track other traders' trading performance.

    Regulation: CySEC, FCA, and ASIC

    Special Features: eToro offers the CopyTrader which allows you to copy trades of other traders and the CopyPortfolio which is a collection of unique market portfolios and top-trader portfolios.

    Demo account: Yes

    Educational Material: Yes

    Fees: eToro charges a withdrawal fee of $5, an overnight fee and inactivity fee. There are no trading activity fee except for the buy and sell spread.

    Minimum deposit: $200

    Payment methods: Visa, MasterCard, Diners, Visa Electron, Maestro, PayPal, Neteller, Skrill, Rapid Transfer, Wire Transfer, Sofort, and China Union Pay

    Deposit and Withdrawal Conditions: eToro has no deposit fee and does not charge any clearing fees. The broker, however, charges a withdrawal fee of $5.

    • eToro offers an extensive range of 145 Exchange Traded Funds (ETFs)
    • Offers the CopyTrade and the CopyPortfolio features that allow users to copy trades of other top traders
    • Highly regulated and well-designed platform
    • Trading ETFs on eToro is not available in the United States
    • The broker charges an inactivity fee
    Your capital is at risk.

    2. Plus500: Regulated ETF Broker with a Wide Range of Funds

    Plus500 is a top-tier trading platform with a vast array of more than 2000 financial instruments on its platform including but not limited to Exchange Traded Funds (ETFs). The highly regulated broker offers an impressive range of ETFs including some of the most popular funds such as the VIX volatility index, QQQ, and SPDRUSA500.

    Regulation: CySEC, FCA, and ASIC

    Special Features: Plus500 allows traders to trade on the ETFs market with up to 1:5 leverage. The broker also offers the Negative Balance Protection which can prevent an investor from getting into debt in the account.

    Demo account: Yes

    Educational Material: Yes

    Fees: While Plus500 has no deposit and withdrawal fee, the broker charges an overnight fee, conversion fee, guaranteed stop order fee, and inactivity fee. In terms of ETFs trading activity fees, Plus500 charges the buy and sell spread only.

    Minimum deposit: $100

    Payment methods: Debit/Credit cards, Electronic wallets (PayPal or Skrill), and Bank transfer

    Deposit and Withdrawal Conditions: Plus500 does not charge any deposit and withdrawal fees.

    RATING

    • Plus500 offers some of the most popular ETFs in the market
    • Features the Negative Balance Protection
    • Easy to use trading platform
    • Plus500 charges an overnight fee
    • Plus500 does not offer a desktop-based trading platform
    76.4% of retail investor accounts lose money when trading CFDs

    3. AvaTrade: High Leverage ETF broker

    AvaTrade is a reputable CFD broker that operates in more than 150 countries worldwide. On top of being a regulated broker, AvaTrade offers a selection of trading platforms for all levels of traders. AvaTrade has quite an extensive list of ETFs with a leverage of up to 1:20. AvaTrade is an ideal platform for those who are looking for an advanced trading platform and automated trading tools.

    Regulation: Central Bank of Ireland, ASIC, BVI, CySEC, FSA, ADGM, and FSCA

    Special Features: AvaTrade provides a high leverage ratio of up to 1:20, the MetaTrader4, and automated trading.

    Demo account: Yes

    Educational Material: Yes

    Fees: AvaTrade only charges an inactivity fee and overnight fee. The broker has no deposit and withdrawal fees.

    Minimum deposit: $100

    Payment methods: Credit card, wire transfer, Skrill, Webmoney, and Neteller

    Deposit and Withdrawal Conditions: Deposit and withdrawal are free of charge at AvaTrade

    • Highly regulated in different regions worldwide
    • High leverage ratio of 1:20
    • Allows users to automated their trading
    • AvaTrade charges inactivity fee
    • The broker does not accept client from the United States

    4. 24option: A Reputable ETF Broker

    Overall, 24option is a solid broker that is ideal for those who are looking for an easy-to-use web-based trading platform or and experienced traders that want to trade on the MetaTrader4. The broker offers ETFs trading, though the selection of products is not as high as offered by eToro for example. Yet, 24option is one of the recommended online brokers that offer ETFs trading through the CFD market.

    Regulation: CySEC

    Special Features: Automated trading through MT4, Trading Central (financial market research tool)

    Demo account: Yes

    Educational Material: Yes

    Fees: 24option charges the following fees: inactivity fee, overnight fee, and withdrawal fee

    Minimum deposit: $250

    Payment methods: Credit card, Skrill, and wire transfer

    Deposit and Withdrawal Conditions: 24option has no deposit fees but charges a withdrawal fee depending on the account type

    • Offers web-based and desktop trading platforms
    • offers the Trading Central, a research and technical analysis tool
    • 24option is a regulated broker
    • 24option charges a withdrawal fee
    • Low selection of ETFs

    5. Libertex: ETF Broker with Competitive Spreads

    Libertex has been in the industry since 1997, which makes them one of the most experienced brokers to offer online trading. The broker serves more than 2 million clients from 110 countries, allowing them to trade more than 2000 financial instruments including ETFs. Libertex offers a leverage ratio of 1:5 for ETFs trading, however, the broker has a relatively low selection of funds.

    Regulation: CySEC and FSCA

    Special Features: Offers the popular MetaTrader4 and a proprietary trading platform available on web-browsers and mobile devices.

    Demo account: Yes

    Educational Material: Yes

    Fees: Libertex charges a rollover (overnight) fee and inactivity fee

    Minimum deposit: $10

    Payment methods: Credit/debit card, Skrill eWallet, Sofort, SEPA/International bank wire, Neteller, Giropay, Trustly, iDeal, Multibanco, Rapid Transfer

    Deposit and Withdrawal Conditions: There are no deposit and withdrawal fees charged by Libertex except commission charged by the bank

    • Low minimum deposit requirement
    • Offers the MetaTrader4
    • Provides more than 2000 financial instruments
    • Libertex does not offer a social trading platform
    • Charges inactivity fee

    ETFs Brokers – Final Thoughts

    ETFs trading can be one of the safest and stable ways to start trading. ETFs allow you to invest in a basket of stocks that represent industry, region, or a specific market. By doing that, you will get better diversification and reduce the risk of investing in one security. The bottom line, ETFs are a great option for beginners and experienced traders alike. From the options above, we can conclude that eToro offers the best platform to trade ETFs – Its trading platform is easy to use, making it the best option for beginners. Furthermore, eToro offers a wide range of ETFs and unlike other platforms, ETFs accounts on eToro are commission-free.

    FAQ

    What Are The Benefits Of Trading ETFs?

    There are several advantages of ETFs that include lower costs, trading diversification, tax efficiency, flexibility and the ability to invest in a specific market, sector or region.

    How much money do I need to start trading ETFs?

    You do not need a large capital to start trading with one of the recommended brokers above. eToro, for example, is one of the leading brokers in the world has a minimum deposit requirement of $250 and offers a selection of 145 Exchange Traded Funds on its platform.

    Are ETFs good for beginners?

    An ETF is basically a number of stocks collected into a fund. However, unlike mutual funds, ETFs can be traded anytime during the exchange trading hours. By trading ETFs, you are reducing the risk involved in one-stock investment and now exposed to a certain sector, industry, market, region, or country. The main reasons as to why ETFs are good for beginners include the low costs, leverage ratio (with CFD broker), liquidity, volatility, portfolio diversification, and a vast array of tradable ETFs choices.

    Can you day trade ETFs?

    Absolutely. ETFs are liquid and volatile throughout the day, meaning you will be able to find many trade opportunities. ETFs trade the same way as common stocks and therefore, the trading hours of ETFs are according to opening market hours of the exchange in which the funds are being traded-in.

    How does leverage work in ETF CFDs?

    Leverage in ETF CFDs works the same way as it works on any other security. For example, eToro enables you to trade with a leverage of 1:5 on ETFs, meaning you can deposit $100 but the available funds in your account will be $500. The broker, in fact, allows you to trade with borrowed funds.

    Remember, all trading carries risk. Past performance is no guarantee of future results.
    Avatar

    A cryptocurrency and trading writer and editor, I specialise in algorithmic trading. I’ve written about every type of automated trading tools - from cryptocurrency robots, binary option robots, down to robo advisors. My goal is to write honest reviews about automated trading tools in order to help users understand which software are trustworthy and which ones they should stay away from. I am constantly analysing and scrutinising the up and coming trading apps so if you are seeking advice or if you would like me to write a robot review in particular don't hesitate to get in touch – I’m happy to help!

    Leave a Reply

    Your email address will not be published. Required fields are marked *