Best ETF Platforms UK 2023

Looking for your perfect ETF platform?

I’ve tested, scored, and ranked the best ETF platforms in the UK.

Whether you’re looking for user-friendliness, safety, or extensive trading options, I’ve got you covered.

So, in a nutshell, what are the best ETF platforms in the UK? The best ETF platforms in the UK include eToro, InvestEngine, and interactive investor. eToro provides a user-friendly platform with commission-free ETF trading, while InvestEngine offers automated portfolio management with a focus strictly on ETFs. Interactive investor presents a wide range of investment options, including a comprehensive selection of ETFs, along with useful research tools.

Top ETF Platforms UK Ranked

Here is a quick list of the best ETF platforms to use in the UK based on my hands-on analysis:

1. eToro – Overall best ETF platform & great for copy trading
2. InvestEngine – Best ETF platform UK for beginners
3. interactive investor – Best ETF platform for selection of over 1,000 ETFs
4. Freetrade – Best ETF trading platform UK for free share upon signup
5. Hargreaves Lansdown – Best ETF broker UK for security & reputation

Best ETF Platforms Compared for UK Investors

Here I’ve compared the ETF platforms based on five key factors you must consider and compare:

Rank	ETF platform	No. of ETFs	Minimum deposit	ETF account fees	ETF dealing fees	ISAs/Pensions
1	eToro	300+	$10	£0	£0	Stocks & Shares ISA w/Moneyfarm
2	InvestEngine	550+	£100	DIY: £0 Managed: 0.25%/year	0.05% – 0.75%	Stocks & Shares ISA
3	interactive investor	1,000+	£0	£4.99/month	£3.99/per trade	Stocks & Shares ISA
4	Freetrade	400+	£0	GIA: £0 ISA: £5.99/month SIPP: £11.99/month	£0	Stocks & Shares ISA Self-Invested Personal Pension
5	Hargreaves Lansdown	1,500+	£1	Fund & Share Account: £0 ISA: 0.45%/year	£5.95 – £11.95	Stocks & Shares ISA Self-Invested Personal Pension

Best ETF Platform & Broker UK Reviews

“Assets invested in global exchange-traded funds (ETFs) have hit a record of $10.32tn off the back of rallying stock markets and resilient inflows”¹.

Choosing the best ETF platform is crucial for newcomers in the market.

Having worked in the retail investment sector in London over the last four years, I had the opportunity to experience the rise in ETFs first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest ETF trading platforms on the market.

Using my experience in this field, I’ve compiled a list of the best ETF platforms in the UK based on

1. Number of ETFs available
2. Minimum deposit
3. ETF account fees
4. ETF dealing fees
5. ISA/pension availability

Factors such as usability, research tools, education materials, and additional features were also considered.

All the ETF brokers I’ve reviewed below are regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA).

1. eToro – Overall best ETF platform & great for copy trading

The overall winner on my list of the best ETF platforms and what I recommend is eToro.

With zero commission or fees on ETFs and over 300 to choose from, eToro is a top pick.

If you’re not sure how to invest in ETFs or which ones to choose, its CopyTrader feature allows you to automatically replicate the trades of successful investors on the platform.

They also have over 40 pre-constructed Smart Portfolios available where you can access long-term investment portfolios without paying management fees, these include ETFs.

If you consider yourself a more DIY investor, their platform is one of the easiest to use.

eToro just improved it for ETFs specifically, with three new data resources that are now on all ETF pages (Expense ratios, prospectus links, and annualised return charts).²

The expense ratio is the annual fee you pay for owning an ETF. Displayed as a percentage of the fund’s assets. It lets you determine the fund’s cost and compare various options. Knowing fees aids in making investment choices. Typically, lower expense ratios lead to higher net returns over time.

An ETF prospectus, given by the company that offers the ETF, shares crucial details for potential investors. Clicking the link shows the ETF’s goals, strategies, risks, costs, and more. Reviewing this helps you grasp the ETF’s strategy, risks, and fees, guiding better investment choices.

An ETF annualised return table shows the ETF’s yearly returns over various periods. It helps you check the ETF’s past results, match them against benchmarks or similar funds, spot trends, and set your investment goals.

The data resources are pictured below:

I would recommend eToro as a top ETF trading platform if you plan to utilise its copy and social trading features. It’s also perfect for investing in other assets such as stocks, forex, CFDs, commodities, and cryptocurrencies.

Key rating criteria:

No. of ETFs	Minimum deposit	ETF account fees	ETF dealing fees	ISAs/Pensions
300+	£10	£0	£0	Stocks & Shares ISA w/Moneyfarm

Read my complete eToro review.

2. InvestEngine – Overall best ETF platform UK for beginners

Coming in at a close second, I’d rate InvestEgine as the best ETF platform UK for beginners.

InvestEngine is great for getting the most bang for your buck when it comes to investing in ETFs.

For a fully managed service, you’ll pay a management fee of 0.25% a year. If you’re confident with a DIY portfolio, there is no fee.

If you’re worried about getting started, the robo-advisory service is perfect. While the DIY platform is a great option for experienced investors to diversify their portfolios and risk.

With InvestEngine’s free Stocks and Shares ISA, you can use your annual ISA allowance to invest and shield returns from tax.

The allowance for the 2023/2024 tax year is £20,000. You may want to use your ISA allowance before considering the general investment account (GIA). However, you can also invest in both.

If you’re thinking of switching, InvestEngine provides a free ISA transfer service. Unfortunately, access to Lifetime ISA (LISA) and pensions (SIPPs) is not available.

If you’ve got a business with some extra cash, it may be beneficial to utilise InvestEngine’s business account (depending on interest rates). A unique feature nonetheless.

InvestEngine offers a “Savings Plan” for automated weekly, fortnightly, or monthly investments, reducing your manual input.

If you need guidance on ETF investing, their blog, and educational articles are top-notch.

The robo-advisors will customise your portfolio based on your risk comfort and the platform uses your answers to certain questions to suggest an appropriate portfolio for you.

InvestEngine adjusts your portfolio to align with your goals. Their team ensures your portfolio is set up for the latest market shifts.

With the DIY portfolios, you have access to over 550 ETFs including ESG options.

Keep in mind that the funds themselves charge ongoing fees, but InvestEngine doesn’t control these.

For managed portfolios, these are an ETF charge of around 0.15% per year and a market spread of around 0.07% per year.

For DIY investors, you’ll just pay ETF charges between 0.05% and 0.75%, averaging around 0.24%.

InvestEngine is regulated by the FCA and covered by the Financial Services Compensation Scheme (FSCS).

I recommend InvestEngine. It’s one of the simplest ways to get started with ETFs at a competitive price, difficult to fault.

Key rating criteria:

No. of ETFs	Minimum deposit	ETF account fees	ETF dealing fees	ISAs/Pensions
550+	£100	DIY: £0 Managed: 0.25%/year	0.05% – 0.75%	Stocks & Shares ISA

Read my complete InvestEngine review.

3. interactive investor – Best ETF platform for selection of over 1,000 ETFs

Interactive investor is the best ETF platform for choice, with over 1,000 ETFs available.

The new Essentials Plan brings the cost of investing in ETFs via a tax-efficient ISA and/or trading account to £4.99 a month. It costs £3.99 per trade for ETFs.

The interface of the trading platform is exceptional and carefully crafted to provide seamless access across various devices including web, mobile, and tablets. 

You can easily set up notifications and alerts across all devices. This keeps you updated on the market in real-time. I also found the search feature to be simple to use which enhanced the overall experience. 

The charting tools available through this platform are relatively straightforward with some advanced features.

Interactive investor offers detailed ETF education and data. This helps users grasp the various ETF types and see how they might aid their portfolio.

You won’t have to worry about a lack of options when using interactive investor. Support from educational material, expert picks, and a simple trading platform make it one of the best.

Key rating criteria:

No. of ETFs	Minimum deposit	ETF account fees	ETF dealing fees	ISAs/Pensions
1,000+	£0	£4.99/month	£3.99/per trade	Stocks & Shares ISA

Read my complete interactive investor review.

4. Freetrade – Best ETF trading platform for free share upon signup

With Freetrade, you’ll get a free share worth up to £200 when you open an account with a first deposit of at least £50.

This isn’t the only reason to select a platform, however.

With a general investment account, investing in ETFs is commission-free. However, if you want to invest through a stocks and shares ISA or a self-invested personal pension (SIPP), you’ll have to pay £5.99 or £11.99 per month.

The paid plans come with other benefits such as a larger selection of stocks, automated order types, interest on uninvested cash, and more advanced stock fundamentals.

Freetrade offers over 400 ETFs, providing a broad variety for your selection.

Something to look out for that would set them apart are fractional ETFs, which are apparently on their product roadmap and will be available in the future. 

All in all, Freetrade provides free stock and ETF trades on its easy-to-use mobile app. There are no inactivity fees, and setting up an account is quick and online.

At the same time, Freetrade has few research tools and only basic charting tools, it also doesn’t take credit or debit card transfers.

I’d recommend it for those wanting free trades on a simple app.

Key rating criteria:

No. of ETFs	Minimum deposit	ETF account fees	ETF dealing fees	ISAs/Pensions
400+	£0	GIA: £0 ISA: £5.99/month SIPP: £11.99/month	£0	Stocks & Shares ISA Self-Invested Personal Pension

Read my complete Freetrade review.

5. Hargreaves Lansdown – Best ETF broker UK for security & reputation

Hargreaves Lansdown, a leading UK platform by market share, ensures top security for your investments.

Reputation comes at a cost though, with ETF dealing charges ranging from £5.95 – £11.95 depending on how many deals you made in the previous month.

With a standard Fund and Share Account, it’s free to hold ETFs. Whereas with a Stocks and Shares ISA, you’ll pay a 0.45% annual charge (maximum £45).

You can also deal ETFs within a SIPP, which works out cheaper than the other platform on my list that allows this (Freetrade).

Hargreaves Lansdown’s expert team frequently writes articles on the culture, ESG practices, costs, and performance of ETFs. These articles discuss global core index-tracking ETFs and highlight popular choices among their clients.

The team ensures the selected funds come from reputable, large-scale ETF providers.

I’d recommend Hargreaves Lansdown if you want to deal ETFs within a SIPP. Its research centre and platform are top-notch, but be cautious about fees adding up.

Key rating criteria:

No. of ETFs	Minimum deposit	ETF account fees	ETF dealing fees	ISAs/Pensions
1,500+	£1	Fund & Share Account: £0 ISA: 0.45%/year	£5.95 – £11.95	Stocks & Shares ISA Self-Invested Personal Pension

Read my complete Hargreaves Lansdown review.

How to Choose the Best ETF Trading Platform & Broker in the UK?

Choosing an ETF platform is a crucial decision that can significantly impact your investing experience and success.

Along with the key rating criteria I used to rank the platforms, here’s what to look for:

• Regulation and Security:
  • Make sure the platform is regulated by a recognised authority, such as the FCA.
  • Check if the platform uses advanced encryption methods and two-factor authentication.
• Range of ETFs Available:
  • The platform should offer a wide variety of ETFs, including those that track major indices, commodities, sectors, or themes.
• Fees and Costs:
  • Understand the fee structure: Are there trading fees, account maintenance fees, or inactivity fees?
  • Look for hidden fees, such as withdrawal fees or fees for receiving paper statements.
• Trading Tools and Research:
  • A good platform provides analytical tools, real-time data, and research reports.
  • Look for platforms that offer educational resources on ETFs, especially if you’re a beginner.
• User Interface and Experience:
  • The platform should be user-friendly, intuitive, and suitable for both beginners and experienced traders.
  • Consider if they offer a mobile trading app and how it’s rated by users.
• Account Types:
  • Check if they offer different account types, such as Individual Savings Accounts (ISAs) or Self-Invested Personal Pensions (SIPPs), which have tax benefits.
• Deposit and Withdrawal Methods:
  • Ensure the platform supports a range of funding methods, such as bank transfers, credit cards, or e-wallets.
  • Check the speed of withdrawals and if there are any associated fees.
• Customer Support:
  • Reliable customer support can be crucial. Check if they offer multiple channels (phone, email, chat) and their response time.
  • Look for customer reviews regarding their support experience.
• Reviews and Reputation:
  • Read reviews from other users on independent review sites.
  • Consider the platform’s overall reputation in the industry.
• Additional Features:
  • Some platforms offer additional features like robo-advisory services, social trading, or demo accounts for practice.

What Is an ETF?

If you’re looking to get into investing, you may have heard of ETFs – but what are they?

An ETF, or Exchange Traded Fund, is a type of security that tracks underlying assets such as stocks, bonds, commodities, and index funds. It is traded on a stock exchange, like a regular stock, and is designed to passively replicate the performance of a particular index or asset.

ETFs are typically cheaper than mutual funds, and they’re also more tax-efficient and easier to trade. They’re popular among investors due to their low cost and the ability to diversify their portfolios.

They can be used to gain exposure to a wide range of assets and markets, and they can be bought and sold like stocks. ETFs also provide investors with exposure to different sectors, regions, and strategies.

They’re a great way for investors to gain diversification and exposure to different markets and asset classes.

Here’s a good video that helps further explain what an ETF is:

How Do ETFs Work?

ETFs are a great way to diversify your investments and get exposure to different markets and asset classes, and they’re relatively easy to trade and manage.

Essentially, ETFs track an index, such as the FTSE 100 or S&P 500, and are traded on exchanges. They can also track a commodity, such as gold, or a basket of securities, such as foreign exchange.

ETFs are typically passively managed, meaning the fund manager doesn’t actively trade the underlying securities, but instead, the fund is managed to match the performance of the index or basket of securities it tracks.

ETFs offer advantages such as low costs and tax efficiency, and they can be bought and sold in real-time throughout the day.

The liquidity of ETFs makes them attractive to investors, and they can be used in a variety of strategies, such as hedging risk and diversifying a portfolio.

ETFs also have the advantage of allowing investors to gain exposure to a broad range of asset classes, without having to buy multiple stocks or funds.

ETF vs Index Fund

An ETF and an index fund are similar in that they both aim to track the performance of a specific market index, such as the S&P 500.

However, there are some key differences between the two:

1. Structure: ETFs are traded on stock exchanges, just like individual stocks, and their prices can fluctuate throughout the trading day. Index funds, on the other hand, are mutual funds that are bought or sold at the end of the trading day at the net asset value (NAV) price.
2. Trading Flexibility: ETFs can be bought or sold at any time during market hours, allowing for intraday trading and the use of various order types. Index funds, being mutual funds, can only be bought or sold at the end of the trading day at the NAV price.
3. Cost: ETFs often have lower expense ratios compared to index funds, as they typically have lower operating expenses. This can make ETFs a more cost-effective option for investors.
4. Minimum Investment: Some index funds may have minimum investment requirements, while ETFs usually have no or very low minimum investment thresholds, making them accessible to a wider range of investors.
5. Tax Efficiency: ETFs are generally considered to be more tax-efficient than index funds due to their unique structure, which allows for in-kind creation and redemption of shares. This can help minimise capital gains distributions and potential tax liabilities.

While ETFs and index funds have similarities and differences, both can be effective investment options depending on an individual’s investment goals, preferences, and trading style.

How Do I Buy ETFs in the UK?

To buy ETFs in the UK, you can follow these general steps:

1. Choose an Investment Platform: Select a reputable investment platform or brokerage that offers access to a wide range of ETFs. Examples of popular platforms in the UK include InvestEngine, eToro, and interactive investor.
2. Open an Account: Sign up for an account with the chosen ETF platform. This typically involves providing personal information, completing verification processes, and agreeing to the platform’s terms and conditions.
3. Fund Your Account: Deposit funds into your investment account using a bank transfer or other supported funding methods.
4. Research and Select ETFs: Take time to explore the available ETFs on the platform and conduct research to find ETFs that align with your investment goals, risk tolerance, and investment strategy. Consider factors such as the underlying index, expense ratio, historical performance, and any specific investment criteria.
5. Place an Order: Once you have selected the ETF(s) you wish to invest in, place a buy order through the investment platform. Specify the number of shares or the amount you want to invest. Take note of any associated trading fees or commissions.
6. Monitor and Manage: After your purchase, keep track of your ETF holdings and regularly review their performance. You may also consider setting up portfolio alerts or using the investment platform’s analysis tools to monitor your investments.

Each investment platform may have its specific processes and features, so it’s important to familiarise yourself with the platform’s guidelines and support resources.

Here’s my full guide for more information, ‘How to invest in ETFs UK‘.

How to Choose ETFs

Choosing an ETF involves several considerations to ensure that it aligns with your financial goals, risk tolerance, and investment strategy.

Here are some tips:

• Objective and Strategy: Determine your investment objective and how the ETF will fit into your overall portfolio. Are you looking for income, growth, or diversification?
• Asset Class and Sector: Decide on the asset class (stocks, bonds, commodities) and specific sector (tech, healthcare, etc.) you want exposure to.
• Expense Ratio: Look for an ETF with a low expense ratio as higher costs can eat into your returns over time.
• Liquidity: Check the ETF’s average trading volume. A higher trading volume generally means better liquidity, which can result in smaller spreads and lower transaction costs.
• Tracking Error: Consider how closely the ETF tracks its underlying index. A lower tracking error is typically better.
• Tax Efficiency: ETFs are usually tax-efficient, but it’s a good idea to consult a tax advisor for implications specific to your situation.
• Dividend Yield: If you’re interested in income, consider the ETF’s dividend yield and payment frequency.
• Historic Performance: While past performance isn’t indicative of future results, it can give you an idea of the ETF’s volatility and potential returns.
• Provider Reputation: Choose an ETF from a reputable provider known for good customer service and strong management.
• Read the Prospectus: Always read the ETF prospectus for detailed information on the investment objectives, risks, fees, and other crucial details.

After evaluating these factors, you’ll be better equipped to select an ETF that aligns with your investment needs.

Pros & Cons of ETFs

Here are the pros and cons of investing in ETFs³:

Pros:

1. Diversification: ETFs often contain multiple assets, reducing the risk associated with investing in single stocks.
2. Lower Costs: ETFs generally have lower fees compared to actively managed mutual funds.
3. Liquidity: ETFs can be bought and sold throughout the trading day, offering flexibility.
4. Tax Efficiency: The structure of ETFs often results in fewer taxable events for investors.
5. Transparency: Most ETFs disclose their holdings daily, allowing investors to know exactly what they own.

Cons:

1. Trading Costs: Some brokerages may charge commissions for buying and selling ETFs.
2. Market Risk: While diversified, ETFs are still subject to market volatility.
3. Tracking Error: Some ETFs may not perfectly track the performance of the underlying index.
4. Complexity: Specialty or leveraged ETFs⁴ can be complex and may not be suitable for all investors.
5. Dividend Payment: Some ETFs may not pay dividends, depending on the underlying assets Accumulation ETFs do not pay a dividend.

Final Thoughts

ETFs can be a great way to diversify your portfolio and get exposure to different asset classes.

With a trusted ETF trading platform, you’ll get access to a wide range of ETFs at a low cost.

eToro, InvestEngine, and interactive investor are all great options for investing in ETFs, each offering unique features and benefits discussed above.

No matter which platform you choose, understanding how ETFs work and doing your research is essential.

FAQs

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Sources:

1. https://www.ft.com/content/23b3c88a-3e76-47c1-bda7-0e5bd53b03c6 ↩︎
2. https://www.etoro.com/news-and-analysis/etoro-updates/investing-etfs-check-out-data-points/ ↩︎
3. https://www.bayes.city.ac.uk/news-and-events/news/2023/june/exploring-the-pros-and-cons-of-index-funds-and-etfs ↩︎
4. https://www.sec.gov/investor/pubs/leveragedetfs-alert ↩︎