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Best ETF Brokers for Investing

Best ETF Brokers for Investing

The post Best ETF Brokers for Investing by Wayne Duggan appeared first on Benzinga. Visit Benzinga to get more great content like this.

Benzinga readers trust Interactive Brokers and eToro as the best ETF brokers.

Are you looking for the best brokers for ETFs? ETF investing is a relatively new investment vehicle, and to experience the most success, you will need a broker who can help guide you through the process. Benzinga breaks down the process and provides a list of the best brokers for ETF investing below.

7 Best ETF Brokers

The more popular ETFs have become, the more they’ve popped up. Here’s a look at the best online brokerages for ETF investors. Investors who want to get exposure to the high returns of the stock market without risking the potential downside of individual stocks are increasingly choosing to invest in exchange-traded funds or ETFs. 

1. Lowest Cost Overall: Interactive Brokers


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website

Best For

Active and Global Traders

N/A

1 Minute Review

Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 135 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.  

IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.

Best For

  • Access to international markets
  • Active traders
  • Sophisticated investors
  • Detailed mobile app that makes trading simple
  • Wide range of available account types and tradeable assets
Pros

  • IB SmartRouting provides significant price improvement vs. industry
  • Fractional trading allows investing regardless of share price
  • Industry’s lowest margin rates
  • Earn more by lending your fuly-paid shares
Cons

  • Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources

Interactive Brokers’ “fee waived” no transaction fee program offers over 150 exchange-traded funds which reimburse IBKR Pro clients for commissions paid on ETF shares held for at least 30 days. IBKR Lite clients always pay $0 commissions on ETFs. Clients can choose funds from major ETF providers such as Wisdom Tree, GlobalX, PIMCO, and KraneShares.

Choose from 2 plans: IBKR Lite or IBKR Pro.

IBKR Lite provides retail clients with $0 commissions on US-listed stock and ETF trades, no account minimums, and no inactivity fees.

IBKR Pro is the IBKR Plan for sophisticated investors and active traders. IBKR Pro clients access the IB SmartRouting system, which helps support best price execution by searching for the best available prices for stocks, options and combinations across exchanges and dark pools

2. Best for Mixed Portfolios: eToro


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Disclosure: Benzinga is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.

Best For

Demo Accounts

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1 Minute Review

eToro is a broker that offers access to over 25 of the world’s most popular cryptocurrencies and 1600 stocks. They have a few unique education and useability tools. Traders can begin buying and selling in as little as 10 minutes.

eToro’s unique CopyTrader feature allows new investors to “copy” the buy orders of professional investors, while the company’s eToro Club feature provides investors with a range of additional education tools and resources. 

Best For

  • Traders looking for an easy-to-use platform
  • Traders who want to practice their trades using a virtual account before entering the market
Pros

  • Simple platform that is easy to master
  • CopyTrader feature that allows new traders to copy the same strategies used by professionals
  • Virtual dummy account that gives you $100,000 to practice trades
Cons

  • High non-trading fees

eToro is well known for its crypto investing platform, allowing users to build portfolios in this emerging market. The platform, however, also allows users to invest in stocks and ETFs.

When you register with eToro and build an account, you can:

  • Invest in full stocks or fractionals, including ETFs
  • Speak with real, experience investors
  • Mix your crypto and stock/ETF portfolios
  • Review detailed price charts and technical analyses
  • Pay zero commissions

Reach out to the customer service for more information, or you can simply build your portfolio on eToro today. With diversification comes greater wealth, especially as ETFs provide you with the security you need in uncertain times.

3. Best for Long Term Investors: Magnifi


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Best For

AI Investing

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1 Minute Review

Magnifi is an intelligently designed marketplace that allows investors to access data-backed information about various investment opportunities. The company combines standard brokerage tools with artificial intelligence (AI) to promote financial competence. Magnifi distinguishes itself from the crowd by offering an AI-powered search feature and an AI-powered investment assistant. Magnifi offers a technology-forward platform that aims to promote confident and capable long-term financial investments.

Best For

  • Long-term investors
  • Individuals interested in personalized assistance
  • New investors that are eager to learn how to start investing
Pros

  • Access to an AI-powered investing assistant with a Magnifi Personal account
  • Commission-free investing
  • Over 15,000 possible investments
  • Available mobile application
Cons

  • Limited methods of communication with customer service

Magnifi is a marketplace that allows you, as the investor, to use common brokerage tools and AI to make the best decisions for your portfolio. Because you can pull up all the information you need on a given asset, you can easily invest in the assets that will give you the results you deserve and better match your investing strategy.

Search for the investment options that meet your needs, invest in specific categories or scan for assets in a price range that’s affordable for you.

Best for long-term investors and those who require a bit of client support, you can also learn more about investing from this platform, utilize the AI-powered investing assistant, enjoy commission-free investing, try the mobile app and take advantage of over 15,000 possible investment options. This makes Magnifi a good place to trade for both seasoned and novice traders.

4. Best for Retirement Savers: TD Ameritrade


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Promotion

$600 cash & free trades for 60 days

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1 Minute Review

This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.

Best For

  • Novice investors
  • Retirement savers
  • Day traders
Pros

  • World-class trading platforms
  • Detailed research reports and Education Center
  • Assets ranging from stocks and ETFs to derivatives like futures and options
Cons

  • Thinkorswim can be overwhelming to inexperienced traders
  • Derivatives trading more costly than some competitors
  • Expensive margin rates

TD Ameritrade currently offers over 300 commission-free ETFs. Like E-Trade, TD Ameritrade’s ETFs are coupled with Morningstar research so investors can make most informed decisions.

You’ll find today’s price change, last price, gross expense ratio, net expense ratio and ratings on one easy-to-understand page. iShares, Wisdom Tree, and First Trust are among some of the popular ETFs that TD Ameritrade offers.

TD Ameritrade is one of Benzinga’s favorite online brokerages. It’s known for its great trading platform, technology, and excellent customer support.  

5. Best for Advanced Traders: TradeStation


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securely through TradeStation’s
website

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Get up to $2,500 cash bonus

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1 Minute Review

TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.

Best For

  • Advanced traders
  • Options and futures traders
  • Active stock traders
Pros

  • Comprehensive trading platform and professional-grade tools
  • Wide range of tradable securities
  • Fully-operational mobile app
Cons

  • Confusing pricing structure to leave new traders with a weak understanding of what they pay
  • Cluttered layout to make navigating TradeStation’s platform more difficult than it should be

TradeStation offers over 2,000 commission-free ETFs making it a valuable option for anyone interested in trading ETFs.

TradeStation’s platform leverages cutting edge trading technology for both active and passive individual traders in the U.S. TradeStation has fully customizable market monitoring, charting and analysis tools that allow you to identify and act upon opportunities.

TradeStation also boasts a spectacular mobile platform which investors on the go can access on their iOS or Android device. Your mobile brokerage account automatically synchronizes with your online accounts in real time.

6. Best for Active Traders: E*TRADE


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securely through eTrade’s
website

Best For

Desktop Trading

N/A

1 Minute Review

E*TRADE is an online discount trading house that offers brokerage and banking services to individuals and businesses. One of the first brokers to embrace online trading, E*TRADE not only survived both the dot-com bubble and Recession — it thrived. You can choose from two different platforms (one basic, one advanced). E*TRADE is a suitable broker for traders of most skill levels, whether you want to buy mutual funds and hold them for decades or dabble in options swing trading. E*TRADE offers a library of research and education materials to help you out.

Best For

  • Active traders
  • Derivatives traders
  • Retirement savers
Pros

  • Sophisticated trading platforms
  • Wide range of tradable assets
  • Exceptional customer service
Cons

  • Limited currency trading
  • Higher margin rates than competitors
  • No paper trading on its standard platform

Like its competitors, E*TRADE offers over 250 commission-free ETFs, including some of the most popular ETFs among traders. E*TRADE makes doing ETF research easy, too. Their comprehensive list of ETFs tracks historical data from ETFs in a variety of asset classes in one easy-to-use webpage.

Quotes are only delayed by about 15 minutes, too, making the data truly actionable.

If you’re looking to trade outside of the commission-free ETFs, E*TRADE charges $6.95 per ETF trade. This rate is a few dollars higher than their competitors, so if you’re looking to trade outside of the free ETFs, keep this in mind.

7. Best for All Trading Levels: Charles Schwab


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securely through Charles Schwab’s
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No matter how many ways you look at it, 245 commission-free ETFs is tough to beat. But if you add low expense ratios, Schwab’s ETF Portfolio Builder tool, its quarterly list of prescreened ETFs and its world-class customer service team, Schwab becomes the top online destination for ETF investors.

Investors can customize a portfolio of ETFs based on their personal risk tolerance and financial goals. They can also browse through the categorized prescreened ETF lists and make sure their portfolio covers all the bases.

Schwab is still actively adding offerings to its commission-free ETF OneSource program, and investors never have to worry about early redemption fees.

Outside of the program, commissions are free, expense ratios are low, and face-to-face feedback is as easy as going down to the local branch. Schwab has everything an ETF investor could ever want and offers a great starting point for retirement investors.

What is an ETF?

While mutual funds are priced just once a day based on their net asset value, ETFs trade on public exchanges just like stocks, making them extremely liquid and tradable. But instead of a single stock, ETFs are funds that invest in dozens or hundreds of stocks, commodities and/or other securities all at once, allowing investors to achieve major diversity all in one swoop.  There are two types of ETFs: index-based ETFs and actively managed funds. 

Why Buy ETFs?

For some, ETFs are the right choice. Here’s why you may want to invest in them: 

  • Limit risk: Investing in a basket of stocks versus an individual stocks spreads the risk around.
  • Save time: You don’t have to do the research on each individual company’s stock.
  • Have lower fees: For the most part, ETFs have low fees, but pay attention to the expense ratio.
  • Bought and sold during market hours: Unlike mutual funds, you don’t have to wait until the market closes to trade ETFs.

Here’s what you’ll have to watch out for. You can check the ETF’s prospectus via a Google search or the SEC’s EDGAR for this information:

  • Objective: What is the fund trying to achieve.
  • Historical performance: Not all ETFs are created equal. Check out the ETFs performance over time before you invest.
  • Investment strategy: How will the funds be managed and achieve its objective.
  • Risks involved: Specific risks should be outlined in the prospectus.

What to Look for in an ETF Brokerage

If you decide that you want to engaging in ETF investing, you’ll have to open a brokerage account. Both the big and small name brokerages offer ETF investing and the number of options can be a little overwhelming. Here’s what to look for before you open an account to invest in ETFs:

Low Commissions

Most ETF brokers offer some form of free trading or commissions for new clients. If the brokerage does charge commission, it usually hovers around $5 per trade. Commissions and fees can quickly add up, so traders should look for brokers that offer lower than average trading costs. Many online brokers now offer commission-free ETFs, meaning that there is no charge for buying or selling a particular fund.

Selection of ETFs

The bigger the selection, the better – as this means you have more options for diversifying your portfolio. A larger selection also allows you to choose from a wider variety of funds in different categories, such as domestic stocks, international stocks, bonds, commodities and alternative investments. Some brokerages offer over 200 ETFs to choose from.

Available Research

When choosing the best ETF brokers, it is important to consider what the wealth of knowledge and information that brokerage provides about the ETFs they offer. The brokerages should make it easy to look up data about the ETFs they offer. This includes the origin, objective, strategy, and historical performance. This will help investors make informed decisions.

Creating Investment Opportunities with ETF Brokers

When it comes to ETFs, there is no one-size-fits-all solution for finding the best broker. The best ETF broker for you will depend on your individual needs and goals. You should carefully review the offerings of various brokers to determine which one is best suited to their needs.

For those who are new to ETF investing, the main takeaway is that it pays to shop around for the best broker. By using a few of our recommendations, you can quickly and easily find the broker that meets your investing needs.

Once you’ve found a broker that meets your needs, make sure to read through all of the terms and conditions of the service they provide. This will help ensure that you don’t end up paying any unnecessary fees or making any investment decisions without fully understanding them.

Frequently Asked Questions

Q

Do you need a broker to buy ETFs?

1
Do you need a broker to buy ETFs?
asked
A

1

Yes, you’ll need to open a brokerage account in order to buy and sell ETFs.

answered

Q

Do brokers charge commissions for ETFs?

1
Do brokers charge commissions for ETFs?
asked
A

1

Most brokers do charge commissions for trading EFTs.

answered

Q

Is it better to invest in ETFs or individual stocks?

1
Is it better to invest in ETFs or individual stocks?
asked
A

1

If your concern is risk, it is better to invest in ETFs because this basket of stocks spreads around the risk.

answered

The post Best ETF Brokers for Investing by Wayne Duggan appeared first on Benzinga. Visit Benzinga to get more great content like this.

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