Financial markets have never been more widely available to the public – and ETFs, or exchange-traded funds, are some of the simplest choices open to investors. ETFs are an excellent ‘entry-level’ choice with plenty of hidden benefits, as well as being an excellent choice in general for those who want diversification without the hassle of picking individual stocks. But, what is the best UK platform for ETFs available right now?
If you’re just getting started with investing, I’ll take you through what you need to know in this guide to ETFs – and whether or not they are likely to be worth your time, money and investment. I’ll also explore a few of my favourite investing platforms for ETFs worth looking into.
What are ETFs?
ETFs (exchange-traded funds) offer investors various options in handy, easy-to-access bundles. They are easy to track and provide fantastic liquidity. Ultimately, new traders and investors have the opportunity to easily diversify their money in bite-size purchases.
ETFs allow you to buy and trade in shares in groups or bundles. For example, you may choose to buy an ETF in a specific niche or industry instead of having to purchase ten or more separate shares. This helps to make investing simpler for newbie traders and more efficient in the long run.
What’s more, the returns can be remarkable – asset holdings over the years have doubled, and ETF interest is unlikely to slow down. They are not only popularly bought and traded by new investors but also by hedge fund managers.
In addition, ETFs are easy to passively invest in. It’s a reason why some of the biggest UK ETF platforms offer robo-advising.
Ultimately, investing in ETFs provide you with simple share management, trackable results, and less hassle and effort over managing a broader portfolio.
How to Invest in ETFs
ETFs are easy to invest in either manually or through a managed platform. When investing via a managed option, you let the platform invest in ETFs on your behalf. Of course, when you manually invest in ETFs, you have complete control over the specific ETFs you wish to put your money into.
However, investing passively in ETFs is becoming increasingly appealing. For example, popular services such as Nutmeg or Moneyfarm invest on your behalf based on a few simple details. You’d normally, for instance, have to fill in a short questionnaire about your investment intentions and attitude to risk before you sign up for their services.
A robo-advisor or wealth manager depending on the service you select, will then passively invest in your money on your behalf. Many people prefer this method as it takes time, effort and the risk of emotional investing out of the picture.
Other popular investment platforms such as Vanguard or Hargreaves Lansdown and relative newcomer InvestEngine offer both managed and diy portfolio options
Active investing, however, gives you complete control. That said, if you are completely new to investing, it may be worth starting out with a passive option before going fully DIY. Online trading services such as Freetrade and InvestEngine, for example, give you more scope when it comes to actively picking ETFs you want to buy into.
How to Choose Which ETFs to Buy
The fun part of starting to invest in ETFs is the fact that you can really tailor your experience. You can choose a broad market of shares from popular sources, or, you can focus on a specific sector or two. What’s more, you could even mix up different shares and sectors from brands and niches that you like the look of. Of course, the latter of these methods is perhaps an advanced move that you might do well looking into later in your trading career.
More and more, there is a stronger focus on investments in socially responsible companies and brands. Even robo-advisors offer chances for traders to put money into markets where they know their capital will be put to good use for wider society. These may be brands or niches where, for example, sustainability targets are important, or where companies resolve to invest in worthwhile causes.
You can also choose to invest money in ETFs based in specific territories – whether by continent, or by niching down into specific countries and areas. Crucially, ETF investing allows for incredible flexibility – regardless of the fact that you are investing in several shares at once.
Of course, ETF investing can get a little more complex than this. In which case, if you are unsure about which way to turn with your own investments, always make a point to follow tutorials or guides provided by your chosen platform or service before you get started.
Best UK Platform for ETFs
UK ETF investment is exploding right now, largely thanks to convenience, choice, and sheer technological innovation. Therefore, it might seem a little tricky to work out which options are the best investing platforms for ETFs for your needs. However, as mentioned, some are better positioned to offer passive services, while others give you more insight in terms of active investments.
Here are some of the best UK ETF platforms operating right now, and why you may wish to consider them.
Nutmeg (Best for Passive Investment)
Nutmeg is arguably one of the better-known and better-reviewed ETF platforms on the British market right now. It’s actually a JP Morgan property, and its main focus is helping new investors get into the wild and wonderful world of markets – ETFs included.
Crucially, it’s Nutmeg’s brilliant passive investment system that acts something of a template for the wider market. The service provides users with a hands-off opportunity for professional portfolio building, meaning with a few simple tweaks, users can define what they’d like to invest in without going into intensive details.
Nutmeg supports fully managed and fixed allocation portfolios, and will invest in ETFs on your behalf. What’s also setting Nutmeg apart from the pack right now is the fact that it has a very robust track record – it’s highly praised by newbies and seasoned investors alike.
You’ll also have your pick of account options, with ISAs, Junior ISAs, Lifetime ISAs and general investment accounts available. You can find out more about the platform from our Nutmeg review.
Get 6 Months 0% Management Fees with Nutmeg
Fees at Nutmeg are also very appealing, and compete well with other services. In fact, if you’d like to claim six months’ with no management fees, sign up through my exclusive link below.
InvestEngine (Best for Low Fees and Wide Selection)
InvestEngine is one of the newer kids on the block when it comes to ETF trading, however, it’s quickly emerging as a major player in the industry for a number of key reasons. The biggest of these, of course, is the fact that their fees are unbeatable.
InvestEngine purely offers ETF investing at this time, meaning there is no need to worry about muddling around with individual share options. Choose their DIY investment product and there are no fees to pay in either dealing, or to use the platform. Therefore, you’re only ever going to pay for fees built into ongoing ETF costs.
It’s a great service to get into if you want to actively select and manage your ETFs, however, there’s also a solid passive investment option on board. This is a managed portfolio products that arrives with fees, though they are impressively competitive. You have a choice of ISA, personal and business account structuring.
What also really impresses me about a service as young and up-and-coming as InvestEngine is the fact that it’s got a pretty broad selection of ETFs – competitive with Nutmeg at the least. This is one to watch if you are serious about growing in ETFs in the months and years to come – with a firm place on my list of the best ETF platforms. If you want to find out more check out our dedicated InvestEngine review.
Get £25 Welcome Bonus with InvestEngine
If InvestEngine sounds like the platform for you what better way to get started than with a £25 welcome bonus? To take advantage of the offer sign up via the link below and complete the registration process. You will then receive the £25 bonus into your portfolio once a minimum of £100 has been invested. You can find the full terms and conditions of the offer here.
HURRY! Offer expires Dec 12, 2022!
With investing, your capital is at risk. InvestEngine (UK) Limited is Authorised and Regulated by the Financial Conduct Authority FRN [801128]
Freetrade (Best for Those Investing in ETFs and Stocks)
Freetrade tends to walk the line between both Nutmeg and InvestEngine fairly well, in that you’ll be able to choose between ETFs and stocks as you like. The service largely focuses on its commission-free status for stocks, but there’s still plenty to get stuck into if you are in the market for investing in ETFs. There’s a nice ETF selection here and fees in general are very competitive.
This is an app-based service, which means it’s best suited to those who want to invest on the go or who prefer to manage portfolios away from the desktop. The service also provides pension and ISA services for investors, too.
However, where Freetrade differs mainly from Nutmeg and InvestEngine is in the investment style. Freetrade doesn’t support a passive method for investing, which means you’ll need to be an active player. Even so, the service remains one of the more appealing ETF platforms for its low fee base and flexibility. If you want to find out more detail about the platform check out our Freetrade app review.
Get a Free Stock worth up to £200 with Freetrade
Sign up using the link below and fund your account with at least the minimum deposit amount to get a random free stock worth up to £200.
Conclusion
Finding the best ETF platform for your money can seem a little complex at first, especially if you are new to buying shares outright. However, the ETF ‘scene’ is still very much growing in the UK, meaning that big services such as Nutmeg are fast becoming household names.
As always, you should be looking carefully at account options, fees, investing styles and flexibility when comparing different services with each other. In this guide, the three I’ve picked for you offer a wealth of different ETFs and investing options and are all highly competitive in terms of ongoing costs and rates.
