Investing in exchange-traded funds (ETFs) is a smart choice for investors, especially beginners, offering a simple way to diversify your investment portfolio with just one purchase.
ETFs cover various sectors and asset classes, from stocks and bonds to commodities and beyond, at a lower cost. Perfect for newcomers, they are bought and sold on stock exchanges much like individual stocks, making them highly accessible. Our guide points you to the best platforms to buy ETFs and top options on the market right now, ensuring you have the best tools.
Discover the best ETFs and brokers for UK investors right here, designed with ease and simplicity in mind.
Leading ETF Trading Platforms
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 9.8 | Visitplus500.com | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% 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. Availability subject to regulations. FCA (FRN 509909). | |
 | 9.0 | Visitxtb.com | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. | |
 | 8.7 | Visitetoro.com | Don’t invest unless you’re prepared to lose all the money you invest. | |
 | 9.1 | Visitinteractivebrokers.com | ||
 | 8.8 | Visithome.saxo | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money. Losses can exceed deposits on some products. | |
 | 7.5 | Visitinvestengine.com | ||
 | 8.9 | Visitig.com | Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. | |
 | 8.1 | Visitwealthyhood.com | ||
 | 9&me | 7.9 | Visitmandgwealth.me | |
 | 8.1 | Visitgetchip.uk | ||
 | 7.5 | Visitwww.moneyfarm.com/uk/ | ||
 | 7.6 | Visitfreetrade.io | The value of your investments can go down as well as up and you may get back less than you invest. |
Top ETFs in the UK – Overview
While the UK market is smaller and less diversified than the US market, it still hosts a good number of opportunities.
iShares Core FTSE 100 UCITS ETF – Tracks the top hundred large-cap companies in the UK, better known as the FTSE 100 index.
iShares Index-Linked Gilted ETF – A collection of government-issued low-risk gilts.
iShares UK Dividend UCITS ETF – Tracks the top 350 UK companies that pay higher-than-average dividends.
iShares Physical Gold ETC – Tracks the price of gold as set out by the London Bullion Market Association.
1. iShares Core FTSE 100 UCITS ETF (Dist.)
The iShares Core FTSE 100 UCITS ETF (Dist.) is an ideal choice for those seeking exposure to the top hundred large-cap companies in the UK stock market. As a passive fund, it offers investors the opportunity to benefit from dividend distributions as cash payments, enabling them to make their portfolios more tax-efficient.
The FTSE 100 index gives investors access to some of the largest and most successful multinational companies based in the UK, such as AstraZeneca, BP, Unilever, HSBC, and Shell. These firms are generally found in stable industries like finance or resources and can provide investors with long-term growth potential.
The ISF ETF allows users to gain exposure to these firms while also keeping costs reasonably low; it only charges management fees of 0.07% per annum. Additionally, this fund offers a degree of global diversification due to its inclusion of some of the most recognisable names in business, including companies outside the UK.
Buy this ETF at:
*Freetrade disclaimer: Capital at risk. Always do your own research.
2. iShares Index-Linked Gilts ETF
iShares Index-Linked Gilts ETF is a UK exchange-traded fund (ETF) that provides investors with an opportunity to access the low-risk investment of index-linked gilts. Gilts are government bonds issued by the UK government and pay a fixed level of interest. Unlike traditional gilts, index-linked gilts offer investors a margin above inflation instead, which can be especially attractive in times of high inflation.
The iShares Index-Linked Gilt ETF provides exposure to this asset class with just 0.10% per year in fees and offers several advantages for investors. These include targeted exposure to sterling inflation-linked government bonds, direct investment in inflation-linked government bonds, and single-country government bond exposure with inflation protection. This makes it an attractive option for investors seeking a low-risk investment with some degree of protection from inflationary pressures.
In addition, investing in an index-linked gilt ETF through iShares also offers investors other benefits, such as diversification and liquidity, as well as additional tax advantages compared to individual investments in index-linked gilts.
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3. iShares UK Dividend UCITS ETF (Dist.)
iShares UK Dividend UCITS ETF (Dist.) is an investment fund that aims to offer investors the opportunity to track and invest in the top 350 companies in the UK that pay out higher-than-average dividends.
It offers diversified exposure to these companies based on their performance in the FTSE 350 Index, with direct investments into 50 of them. By investing in this single country-focused ETF, investors can benefit from an increased income as it primarily focuses on dividend payments.
The fund comprises stocks and bonds from reputable British companies, primarily from the finance, consumer goods, and utility sectors. This ETF follows a passive management strategy that takes advantage of indexing, allowing it to benefit from any positive changes in market movements while minimising losses during periods of market volatility.
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*Freetrade disclaimer: Capital at risk. Always do your own research.
4. iShares Physical Gold ETC
We’ve closed off one of the longest bull markets in history following the pandemic breakout and the war in Ukraine – which marked the comeback of everyone’s favourite shiny commodity: gold.
As fears of recession and potential destabilisation of the US dollar grow, a growing number of investors have been adding gold into their portfolios. Gold prices have been flirting with the £1,700 mark, and hit an all-time high of £1,635 in April. You too can benefit from its meteoric rise without the hassle of buying actual gold and storing it in a vault.
Managed by Blackrock, iShares Physical Gold ETC aims to track the gold price as per the London Bullion Market Association. An investment in the fund is underpinned by a metal entitlement – meaning that an amount of physical gold backs the investment. The fund is passively managed, which means that it comes with lower ongoing charges, and that it doesn’t aim to beat the price of gold, rather, it aims to match it.
During times of uncertainty and high inflation, this fund can provide the hedge your portfolio needs.
Buy this ETF at:
*Freetrade disclaimer: Capital at risk. Always do your own research.
The Best US ETFs
The US market represents the lion's share of the global financial markets – the world’s largest and most profitable companies, including the so-called MegaCap-8 (Apple, Alphabet, Amazon, Microsoft, Netflix, Meta, Nvidia, and Tesla), are based in the US and are listed on US exchanges.
The easiest way for UK investors to get exposure to these industry titans is to invest in an ETF tracking the Standard & Poor’s 500 (S&P 500) index. While buying US ETFs from the UK is not possible, there are plenty of UK ETFs replicating US indexes.
Vanguard S&P 500 UCITS ETF Distribution – Tracks the S&P 500 index and distributes the dividends that included companies yield to the shareholders.
Vanguard S&P 500 UCITS ETF Accumulation – Also tracks the S&P 500 index, but reinvests dividends that included companies yield instead of distributing them.
iShares NASDAQ 100 UCITS ETF – Tracks the top 100 companies listed on the NASDAQ exchange and often overlaps with the S&P 500 index.
iShares Core S&P 500 UCITS ETF – This makes an alternative to Vanguard’s S&P 500 Distribution ETF.
1. Vanguard S&P 500 UCITS ETF (Dist.)
The Vanguard S&P 500 UCITS ETF (VUSA) is an excellent choice for those seeking exposure to the American stock market. Using a passive management or indexing investment strategy, VUSA aims to track the performance of the Standard & Poor’s 500 Index. It achieves this by investing in the 500 largest companies in the US, including Apple, Google, Coca-Cola, Disney, and Nike, and has an operating cost of 0.07%.
To ensure that it accurately mirrors this index, VUSA acquires all constituent securities proportionally, with sampling used where full replication is impossible. Furthermore, VUSA always remains fully invested except under extraordinary market conditions or similar circumstances.
This ETF provides access to some of America’s top firms but carries its own risks due to fluctuations in price caused by macroeconomic events and company-specific news. Nevertheless, with an 85% price increase in the past five years, VUSA has been in a strong uptrend since 2013, making it an ETF to keep an eye on.
Buy this ETF at:
*Freetrade disclaimer: Capital at risk. Always do your own research.
2. Vanguard S&P 500 UCITS ETF (Acc.)
This Vanguard S&P 500 UCITS (VUAG) ETF is an exchange-traded fund that tracks the performance of the Standard & Poor's 500(S&P 500) Index. The S&P 500 index consists of large-cap stocks from the U.S. market, and the VUAG ETF invests in all constituent securities of the index in the same proportion as the index. Unlike the VUSA ETF, income and dividends from VUAG are automatically reinvested into the fund, making it an excellent choice for investors looking to benefit from compounding returns.
The Vanguard S&P 500 UCITS ETF seeks to maximise returns for investors by using a sampling process when it is impossible to fully replicate the performance of the S&P 500 Index. It also works diligently to remain fully invested at all times, except in extraordinary market conditions or other similar events that may impact investments. This ETF is available in many countries and has been officially registered with regulatory authorities such as the UK Financial Conduct Authority (FCA).
Investors who use VUAG ETF have access to a diverse portfolio due to its selection of large-cap stocks from different sectors and industries throughout the US stock market.
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3. iShares NASDAQ 100 UCITS ETF
If you’re looking for a tech-focused ETF in the UK, one option is the iShares NASDAQ 100 UCITS ETF (CNDX). This ETF seeks to track the performance of an index composed of 100 of the largest non-financial companies listed on the NASDAQ Stock Market.
With CNDX, investors can target their exposure to large market capitalisation stocks from various global industry groups such as computer hardware and software, telecommunications, retail/wholesale trade, and biotechnology. Plus, with an ongoing management charge of 0.33%, CNDC provides investors with a suitable way to diversify their portfolios while still taking a tech investing approach.
Whether you want broad exposure without taking on too much risk or prefer a targeted approach that allows you to hone in on specific areas of technology investments, CNDX is worth considering for your portfolio.
With a 95% price increase in the last five years, the fund has experienced strong returns due to its impressive basket of top non-financial stocks from across the world - making it one of the best ETFs in the UK for technology investments. The iShares NASDAQ 100 UCITS ETF has been around since 2006 and is managed by BlackRock Investment Management (UK).
Buy this ETF at:
*Freetrade disclaimer: Capital at risk. Always do your own research.
4. iShares Core S&P 500 UCITS ETF (Dist.)
The iShares Core S&P 500 UCITS ETF offers investors the opportunity to gain exposure to some of the most well-known and established companies in the United States.
This ETF is designed to track the performance of the S&P 500 index, providing a broad and diversified portfolio with over 500 large US-based multinational corporations. All dividends generated are distributed as cash, giving investors access to an attractive source of income.
Over the past five years, this ETF has grown by 35%, making it one of the top performers in its class.
Buy this ETF at:
*Freetrade disclaimer: Capital at risk. Always do your own research.
The Best Global ETFs
While the above funds are an excellent way of getting exposure to specific countries, a global fund is more suitable for hands-off investors who wish to take advantage of the growth in the global economy as a whole.
Vanguard FTSE All-World UCITS ETF – Tracks the FTSE All-World Index, which includes over 3,000 stocks from developed and emerging markets.
iShares Global Clean Energy UCITS ETF – Tracks the S&P Global Clean Energy Index, consisting of best-performing companies in the clean energy sector globally.
1. Vanguard FTSE All-World UCITS ETF (Dist.)
The Vanguard FTSE All-World UCITS ETF is a global stock market exchange-traded fund (ETF) that allows investors to invest in over 3,000 stocks from around the world. This ETF seeks to track the performance of the FTSE All-World Index, which includes stocks from both developed and emerging markets, including mid and large-cap securities. The portfolio is weighted according to the global market, with North American stocks making up 63%, followed by Europe at 15%, Asia Pacific at 10%, and Emerging Markets at 10%.
The ETF employs a passive management approach through the physical acquisition of index constituent securities and aims to remain fully invested except in market or political conditions that are deemed extraordinary. With an ongoing management charge of 0.22%, this fund offers a diversified portfolio of stocks, and any income generated is paid out directly without reinvesting.
Furthermore, since it follows an index tracking approach, no active management decisions need to be made as all investment decisions are based on established rules and criteria. Therefore, investors don’t need to worry about making individual stock selection decisions or monitoring their investments on an ongoing basis.
Since the rebound of the VUAG ETF in 2020, it has maintained a strong uptrend with a 57% price increase in the past five years.
Buy this ETF at:
*Freetrade disclaimer: Capital at risk. Always do your own research.
2. iShares Global Clean Energy UCITS ETF (Dist.)
The iShares Global Clean Energy ETF (INRG) is a passive fund that tracks the S&P Global Clean Energy Index. The index consists of global equities from companies in the clean energy sector, and dividend income is distributed to investors semi-annually.
This fund could be significantly impacted by the momentum within the clean energy industry and any news or legislative changes that may affect it. For example, climate bills in the US or Europe that can create more opportunities for green energy companies are often seen as good news for the ETF.
Investors can access the INRG fund for exposure to this rapidly growing industry and potentially benefit from increased returns due to environmental sustainability initiatives.
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*Freetrade disclaimer: Capital at risk. Always do your own research.
What are ETFs and How Do They Work?
Exchange Traded Funds (ETFs) are investment funds that are traded on exchanges, just like stocks. Think of them as a basket of stocks, commodities, or other assets that can be purchased and sold in one transaction.
Most ETFs are designed to track a particular market index, like the largest companies by market cap or the fastest-growing companies, or they may group together companies governed by similar standards, such as environmental, social, and governance (ESG) ETFs. To track the performance of an index, the ETF buys the assets that make up that index. For example, if an ETF tracks the performance of the S&P 500 (leading 500 publicly traded companies on the US exchanges), it would own shares of each of the 500 companies that the index includes.
You can also gain exposure to a whole industry or market through ETFs. Some track select sectors, such as the consumer discretionary sector or energy industry, while others track the performance of certain assets like gold, silver, the US dollar, and more.
ETFs allow you to be invested in hundreds of different assets for the price of a single share. If you are just starting out, an ETF can help you diversify your investments across assets easily, with minimal costs, and on autopilot.
The easiest way to start investing is to find a trading platform – most of which list ETFs as a default. Finding the best ETF platform for your needs boils down to your personal circumstances, such as your experience level and budget.
Are ETFs the Same As ETPs?
ETP stands for Exchange-Traded Product, which is a general term that includes various investment products traded on an exchange. ETFs are a type of ETP, alongside others like Exchange-Traded Notes (ETNs) and Exchange-Traded Commodities (ETCs).
ETFs vs Mutual Funds
Both ETFs and mutual funds are baskets of investments, but there are some key differences in the way they are bought and sold.
You can buy and sell ETFs on stock exchanges, whereas mutual funds are different. They can only be bought and sold at the end of the day, and instead of a market price, they have minimum investment requirements. It can range from £100 to £5,000, or more.
ETFs vs Index Funds
The primary difference between ETFs and index funds is in their tradability. ETFs are traded on an exchange like individual stocks, meaning their prices fluctuate throughout the day, whereas index funds are only bought and sold at the end of the trading day at the net asset value price.
ETNs vs ETFs
ETN stands for Exchange-Traded Note. It is a type of unsecured debt security that tracks an underlying index of securities and trades on a major exchange. Unlike ETFs, ETNs don't own the assets they track. Instead, they are backed by the credit of the issuer.
Risks and Benefits Involved With ETFs
Exchange-traded funds offer investors unique opportunities to profit from the financial markets but still come with certain drawbacks. Here are some pros and cons of ETFs;
- Low Costs - ETFs are generally cheaper to buy and operate than traditional funds due to their low management fees and trading costs.
- Liquidity - ETFs are traded on the stock market, meaning they can be bought or sold quickly and easily. This makes them attractive to short-term traders looking for quick gains.
- Diversification - ETFs allow you to gain exposure to different asset classes in one go, reducing overall risk by diversifying your investments across multiple markets.
- Limitations - ETFs can only track the performance of an index, sector, or asset class - rather than actively manage like mutual funds, limiting their growth potential.
- Trading Risks - ETFs are traded on the stock market, which can be subject to sudden price swings that could leave you out of pocket if they don’t go your way.
- Taxation - ETF investing is subject to capital gains tax, so it is essential to understand taxation rules and regulations before taking the plunge.
How to Buy ETFs — A Step-By-Step Guide
Step 1 — Open a brokerage account
Step 2 — Research ETFs
Step 3 — Deposit funds
Step 4 — Place your trade
The Best ETF Trading Platforms
Here is a list of the three best trading platforms for trading ETFs for UK investors;
With over 250 tradable ETFs, eToro is one of the most popular multi-asset trading and investment platforms in the UK. From stocks and UK ETFs to indices, commodities, forex, and crypto assets, eToro offers a wide range of options to suit every type of investor – including beginners. With an intuitive user interface and a full suite of tools for fundamental and technical analysis, eToro provides users with the tools they need to make informed decisions when investing in markets.
The ETF platform also includes Copy Trading, which allows users to copy the trades of top-performing traders on the platform. This feature is particularly beneficial for beginner investors who may not have extensive investing experience.
When trading on eToro, all transactions are conducted in USD currency, meaning that a currency conversion fee will apply if you deposit or withdraw funds in another currency other than USD. There is a fee of $5 (£4) for withdrawals, and the minimum withdrawal amount is US$50 (£40). To help UK customers avoid exchange rate fees, there’s an app called eToro Money which allows you to convert GBP into USD free of charge. Unfortunately, however, eToro does not offer an ISA or SIPP at this time.
- Its social and copy trading functionalities are unparallaled.
- Both the web platform and mobile application has a very user-friendly interface.
- There is no commission for ETF trading.
- It has a large ETF product portfolio of over 250 options.
- There are charges for inactivity and withdrawals.
- The market research tools have room for improvement.
- It's not possible to open an ISA or SIPP account.
- You can only deposit US dollars unless you set up eToro Money.
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Saxo Markets, the UK division of Saxo Bank, provides access to an extensive range of financial products, including stocks and shares from the UK and overseas markets, bonds, ETFs, forex, CFDs, and more. For beginner investors who wish to save time or need more confidence in their trading ability, Saxo Markets offers a selection of managed portfolios designed by experts to help new traders make better trading choices. These managed portfolios come at an average cost of 0.95% per year (including fund costs).
For more experienced traders who prefer a DIY approach, various tools are available such as charting with 50+ technical indicators and integrated trade signals to help them build their own portfolio. The firm's proprietary platform, SaxoTraderPRO, provides advanced traders with even more sophisticated features, such as algorithmic orders and advanced trade tickets.
Regarding UK ETFs specifically, Saxo Markets provides access to thousands of them from around the world at competitive prices with no hidden costs or extra fees included in trades. Overall, Saxo Markets is an excellent platform for beginners and advanced traders looking to invest in ETFs in the UK. It provides diverse product offerings and convenient, user-friendly tools designed to facilitate fast and easy trades.
- It offers excellent customer service with various live channels, including a phoneline, email address, and livechat.
- The product portfolio is very broad, other than ETFs you can trade currencies, commodities, bonds, and futures.
- It offers excellent customer service with various live channels, including a phoneline, email address, and livechat.
- ETF commissions decrease on a tiered scale, meaning that the more you have in your balance, the less you pay.
- SaxoTraderPro lacks predefined layouts, and it takes time to customise the platform.
- You will need to pay subscription charges to use real-time pricing information.
- The minimum deposit requirement is fairly steep for industry standards.
- The ETF trading commissions are not capped, and minimums are quite high.
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Established in 2018, Freetrade has garnered critical acclaim from British Bank Awards for four consecutive years. The outfit follows a mobile-first approach; the mobile application is designed to make the trading mechanism as straightforward as possible. It includes no hard-to-understand jargon or gimmicks and is possible to get it up in running in a few clicks.
The platform’s appeal primarily comes from its simplicity – yet, unfortunately, screening tools are lacking in depth. Nevertheless, the outfit offers exposure to over 6,000 assets with more opportunities for paid-tier users – making it an ideal ETF trading platform for UK investors.
*Freetrade disclaimer: Capital at risk. Always do your own research.
- There are no commission, withdrawal, or deposit charges for trading stocks and ETFs.
- The account opening is fully automated: it's very straightforward and takes less than a day.
- The platform is easy to navigate and user-friendly.
- If you feel like branching out to stocks, you can buy fractional shares for £1 or £1 instead of buying a whole share.
- You can't buy fractional ETFs
- It doesn't offer derivative products like CFDs, spread betting, or options.
- Product portfolio is quite limited, it's not possible to invest in mutual funds, bonds, currencies, or commodities.
- The currency conversion rate is steep for industry standards.
Are ETF Trading Platforms Safe?
Unfortunately, there is no single answer to this question, as a variety of factors can make a platform or broker safer than others. It is crucial for investors to do their due diligence when researching platforms and brokers, looking into the security measures in place, fees associated with trades, and customer service quality.
Additionally, some brokers may ensure funds are used in investment accounts, providing further peace of mind for traders. However, it is essential to note that no trading platforms are risk-free, and potential losses should always be considered when making ETF investments.
