Exchange-traded funds, or ETFs, have become incredibly popular among investors over the past few decades. ETFs allow investors to easily diversify their portfolios by purchasing a small stake in a number of different stocks, all with a single purchase. Initially, however, ETFs can raise plenty of questions for new investors.
What’s the difference between ETFs, mutual funds, and index funds? Are there different kinds of ETFs for different trading styles? And finally, what’s the best brokerage platform to use to buy and sell ETFs?
If any of these questions have been on your mind, then rest assured we’ve got you covered. We’ll give you a crash course in ETFs before delving into reviews of some of the best ETF brokerages.
Table of Contents
- Ranking the Best Brokers for ETF Investors
- 1. M1 Finance
- 2. Robinhood
- 3. eToro
- 4. Fidelity
- 5. Charles Schwab
- 6. TD Ameritrade
- 7. Interactive Brokers (IBKR)
- 8. E*Trade
- 9. Vanguard
- 10. TradeStation
- 11. Merrill Edge
- 12. Ally
- 13. Betterment
- 14. Webull
- 15. FirstTrade
- 16. J.P. Morgan
- ETFs vs Mutual Funds and Index Funds
- Understanding Expense Ratios
Ranking the Best Brokers for ETF Investors
When it comes to the best place to buy and sell ETFs, there are now plenty of online platforms to choose from. Which is the best choice for you will largely come down to your particular investing style, how actively you want to manage your portfolio, and any other trading features you may be looking for in an investment platform.
Here we’ve assembled a collection of some of the best ETF trading platforms for investors of various levels. Some of the things you may want to consider as you review them include:
- Are you an active investor or are you looking for a hands-off, robo-advisor approach?
- What other asset classes do you want to include in your portfolio? Every investing platform is also going to include access to stocks. But do you want one that also offers things like futures, Forex, or crypto?
- Ease of use can also be an important consideration if you’re choosing your first trading platform. Some investing accounts are designed to include professional-level tools and screeners. Others are incredibly straightforward and may be much easier for beginning investors to navigate.
- Do you want a stand-alone investing account or one that offers additional banking services, such as checking and saving accounts? You may even want to see if your own financial institution offers a brokerage option.
- Do you want a broker that offers fractional ETF trading? In other words, do you want to be able to purchase half or a fourth of a higher-priced ETF?
Overall, just keep your eyes open for the types of accounts that appeal to you. Without further ado, let’s help you find a comprehensive trading platform that fits your needs.
1. M1 Finance
M1 Finance is an investing platform that brings together the best traits of a robo-advisor and a traditional brokerage account all in one. The platform gives customers several unique options when it comes to creating a portfolio from an extensive collection of commission-free ETFs and stocks.
Each portfolio is visualized as a “pie,” with each different holding representing a slice. M1 gives customers the option to design their own custom pie with the stock and ETF slices of their choice, or to choose from a selection of pre-curated “expert pies.”
If you choose, you can also use M1’s features such as dynamic rebalancing and smart transfers, which more or less allow you to put all the benefits of enhancing your fully diversified portfolio on autopilot. Overall, M1 is a great way to automate your investments while still maintaining as much input as you’d like.
- Newer traders can choose from a selection of pre-curated portfolios, while advanced traders can customize their own
- Investors with at least $5,000 invested can enjoy low-interest loans against their account
- M1 Finance combines the freedom of a traditional investment account with the convenient features of a robo-advisor
- $100 account minimum to get started
- Human advisors and financial experts are not offered
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Robinhood made a name for itself back in 2013 by being one of the first online brokers to offer commission-free ETFs and stocks. This ultimately turned the world of investing on its head, as brokerages had traditionally charged high fees that made stock and ETF trading unrealistic for the average investor.
Today, Robinhood continues to allow investors to buy and sell ETFs from major U.S. stock exchanges with no trading fees. Investors can access the trading platform via desktop or by downloading the convenient mobile app, which includes all the same features.
While Robinhood doesn’t have the extensive tools offered by some other brokers, this isn’t always a bad thing, especially for beginning traders. Its sleek interface is very straightforward and easy to use, making it a great place for anyone to trade ETFs.
- Robinhood allows investors to pace ETF trades commission-free with hundreds of choices available
- No minimum deposit or fee to use
- Allows fractional ETF investing
- Robinhood’s straightforward interface is great for beginners but may feel limiting to more experienced traders and investors
eToro is mainly known as a cryptocurrency trading platform, but it now also allows ETF and stock trading. This is another platform that’s great for beginners or anyone simply looking for a straightforward trading platform that’s incredibly easy to navigate.
While eToro offers a limited number of exchange-traded funds as compared to some other brokerages, this may not be a con if you’re looking to trade ETFs for the first time. The ETFs it does offer featured tend to be pretty solid options and come with just enough research and stats to help you make an informed choice.
One of eToro’s other perks is that it’s one of the best online brokers when it comes to social interaction. eToro is built a bit like a social media platform for investing and allows you to connect and trade ideas with other investors from around the world.
- Allows investors to trade ETFs on a sleek, very easy-to-navigate platform
- Social media style interaction with other investors
- Includes a free paper trading account
- May not be the best brokerage for experienced investors or those looking for a huge array of choices
See Related: Best eToro Alternatives: Similar App & Sites
Fidelity is one of the best online brokers all around and offers plenty of great perks for ETF investors. Investors can choose from a huge collection of over 2,700 ETFs, including nearly every exchange-traded fund offered in the U.S. Fidelity also partners with iShares, which offers the largest selection of zero-commission ETFs out there.
Despite its large range of offerings, Fidelity also makes it easy to find the best ETF for you. The platform’s ETF screener can search out top results based on anything from sector or market cap to social responsibility rating.
Fidelity even offers an ETF builder that can help you build the ideal ETF portfolio for you based on your risk tolerance and objectives. Last but not least, Fidelity also offers a nice assortment of their own ETFs, including Web 3.0-based options that center around cryptocurrency and the Metaverse.
- An incredibly extensive selection of ETFs, complete with a great screener to help you find the best choices for you
- Educational resources to help investors learn about ETFs (or any other investment product for that matter)
- Invest in a wide range of products, including mutual funds, stocks, ETFs, bond ETFs, and more
- Doesn’t offer ETF CFDs (If you don’t know what they are, don’t worry about it)
5. Charles Schwab
Charles Schwab is also an excellent choice for ETF investing and offers over 2,000 commission-free ETFs, including their own 25+ actively managed funds. Schwab’s wide range of tools and educational resources makes it a solid choice for both experienced investors and those just getting started.
As a top ETF broker, Charles Schwab offers different types of accounts for investors of various experience levels. If you want to go the DIY route, you’ll enjoy the help of several powerful tools including Schwab’s ETF Select List® and customizable ETF screener. Schwab also offers a Fund Finder, which allows you to make side-by-side comparisons of different funds.
If you’d like a little help, Charles Schwab also offers a Schwab Personalized Portfolio Builder tool that can help you create an ETF portfolio based on your preferences and risk tolerance. If you’re looking for more of a hands-off training experience, the brokerage also offers robo-advisors or experienced human advisors.
- Charles Schwab is an incredibly reputable brokerage firm with a reputation for being one of the best ETF brokers in the business
- Buy ETFs commission free with plenty of options to choose from
- Schwab offers excellent research, comparison, and screening tools, making it a great choice for ETF traders of all levels
- No fractional trading available for ETFs
See Related: Best Stock Apps for Investing
6. TD Ameritrade
TD Ameritrade, which was acquired by Charles Schwab in 2020, is another great online trading platform for investors of all levels. TD Ameritrade is available as an online platform or as a mobile trading app.
No matter which you use, you’ll enjoy $0 commission stock and ETF trading, complete with plenty of free research from Morningstar, the Federal Reserve Economic Database, and the Center for Financial Research and Analysis.
TD Ameritrade also offers the free, professional-level Think or Swim Platform, which is specifically designed for active traders. If you’re a day trader who is into leveraged and inverse ETFs, look no further. Trust us.
- Solid platform with plenty of securities available for investors of all levels
- TD Ameritrade offers everything long-term ETF investors need, while Think or Swim is great for more active traders
- Excellent research tools and customer service, no account minimum
- No fractional stock or ETF trading options
7. Interactive Brokers (IBKR)
Interactive Brokers Pro is one of the most popular trading platforms among day traders and active traders, due to its robust features and SmartRouting trade execution tool. But everyday retail traders can also enjoy ETF trading through Interactive Brokers LITE, which offers unlimited commission-free trades on stocks and ETFs listed on US stock exchanges.
Rest assured that LITE users don’t have to worry about account minimums or inactivity fees. One of the perks of IBKR LITE is the ability to access low-cost securities from international markets. LITE users will also enjoy the perks of Interactive Brokers’ Trader Workstation (TWS), free trading tools, and extensive educational offerings.
Interactive Brokers also offers a Pro version that may be a great fit for professional or very advanced traders, though you should take the time to research the trade-offs of its fixed or tier-based pricing system. If you one day hope to be a professional trader but are still getting your footing, then IBKR LITE is a perfect place to start.
- IBKR LITE is a great free alternative to IBKR Pro for intermediate or advanced traders who are less active
- Incredibly impressive range of tools for the advanced trader
- Offers access to international markets
- The potential to be incredibly overwhelming for the beginning trader
See Related: Best Electric Vehicle ETFs to Invest in Today
As one of the first online brokers ever, E*Trade changed the game by giving everyday retail investors access to the stock exchanges without having to rely on a live broker. Recently acquired by Morgan Stanley, E*Trade continues to be a popular choice for beginners and experienced investors alike.
E*Trade’s website proclaims that the platform offers “every ETF sold” and comes with plenty of great tools to help you find the best choices for you. The platform offers a great ETF screener to help you narrow down your options. If you’re not into research or are just starting out, you can even choose from a selection of pre-built ETF portfolios and/or go hands-free with E*Trade’s automatic investing feature.
In addition to ETF trading, E*Trade offers access to individual stocks, options, futures, bonds, CDs, and more than 4,300 no-transaction-fee mutual funds. Overall, it’s a nice choice for ETF investing regardless of your experience level.
- Large selection of commission-free options, stock, and ETF trades
- Now offers 24×5 trading capabilities for select ETFs
- Includes a great educational center, free debit card, and other cash management features
- No fractional trades except through the robo-advised portfolio option
When it comes to exchange-traded funds and mutual funds, Vanguard is one of the most respected names in the industry. Back in 1975, it was Vanguard’s founder who introduced the first index fund in history. Today, the company offers over 400 different Vanguard funds around the world.
Given that funds are kind of Vanguard’s thing, it may come as no surprise that a Vanguard brokerage account is definitely a great choice for ETF trading. Vanguard brokerage services offer commission-free trading for both Vanguard mutual funds and ETFs, as well as access to over 3,000 funds from outside companies.
You’ll also discover that Vanguard funds come with an 82% lower expense ratio than the industry average. If your portfolio tends to favor mutual funds and ETF trading, then Vanguard is probably a lead contender for the best ETF broker for you.
- No commission fees to buy or sell ETFs and Vanguard mutual funds online
- Best for buy-and-hold investors
- One of the best ETF brokers for funds
- Not the best choice for active traders
- Order execution styles are limited to market, limit, stop, and stop-limit orders
See Related: Best Nickel ETFs to Invest in Today
TradeStation is yet another fantastic choice for ETF trading, as it offers investors access to over 2,000 exchange-traded funds. Investors also gain access to stocks, futures, options, and crypto. TradeStation is one of the best online brokers for advanced traders and can be accessed online, through a desktop platform, or through its mobile apps.
TradeStation offers a number of innovative tools, including its real-time RadarScreen® feature, which can search out trading opportunities based on over 180 customizable filters. It also offers EasyLanguage®, which makes designing custom strategies and indicators way easier than it sounds.
If you’re looking for a professional-level platform that makes trading ETFs simple, then TradeStation may be an excellent ETF broker for you. With access to over 2,000 commission-free options and a variety of high-quality screening tools, this is one brokerage account that makes it easy to find your next trade.
- Offers access to over 2,000 commission-free ETFs
- Professional-level web, desktop, and mobile trading platforms
- Innovative research and scanning tools for the advanced trader
- Can be a tad overwhelming for beginners
See Related: Best Stock Screeners
11. Merrill Edge
Merrill Edge is an online investing platform provided by Bank of America, so it may be a nice choice for the bank’s current customers. Bank of America clients will find it incredibly easy to integrate their current accounts into Merrill’s investing options. They’ll also enjoy unlimited $0 self-directed stock and ETF trading, no account minimums, and no annual fees.
Merrill comes with enough info to point casual traders in the right direction when it comes to finding the best ETF to add to their portfolio. Merrill Edge Select™ ETFs highlight three of the top ETF trading choices in a number of categories each quarter based on performance, cost, and risk. It’s actually quite a handy tool that anyone can use, whether a Merrill customer or not.
Merrill also offers broker-assisted trades but with a $29.95 price tag, so you’re probably better off taking the DIY route. If you’re a Bank of America customer looking for a relatively simple ETF trading experience, then Merrill may be worth looking into.
- Nice for Bank of America customers as it integrates with their other accounts
- ETF screener, research tools, and Merrill Edge Select™ ETFs make it easy to find the best ETF for you
- Also offers stock trading, mutual funds, options, bonds, and fixed-income securities
- Advanced traders may find Merrill’s lack of features such as condition orders or mobile charting tools lacking
See Related: Best Water Stocks & ETFs to Invest in Today
In our opinion, Ally may be the most underrated online broker out there. Ally offers a full-service financial solution for bank accounts, loans, and, of course, investing. Ally Invest offers two different options, including a traditional self-directed trading account and robo portfolios. If you’re looking for a robo-advisor, then Ally’s cash-enhanced portfolio options are certainly worth a look, as they come with no advisory fees and automatic rebalancing.
The self-directed investor will also find plenty to love, including the ability to trade stocks, ETFs, and options for free. Ally has developed several key partnerships in order to offer customers plenty of commission-free ETFs from market leaders like Vanguard, iShares, GlobalX, and more.
The platform also comes with plenty of great research tools, including a robust ETF screener that can help you narrow down choices. Choose from a selection of predefined screening categories or customizable filters, including things like Morningstar Analyst Ratings™, performance, or fund family.
- No account minimum for self-directed accounts
- Great choice if you want to invest and bank through the same company
- Plenty of charting and research features
- Robo accounts require a $100 account minimum (which is still not all that bad)
If you’re looking for a hands-off approach to investing, then Betterment is worth looking into. For a 0.25% management fee, Betterment can handle all the hard parts of keeping your portfolio on point so you don’t have to worry about it.
Betterment makes investing effortless by allowing investors to choose from a range of different portfolio options. Their custom, professionally-curated portfolios are built from a mixture of low-cost EFTs or cryptocurrencies and center around various themes that you can choose from. Whether you want to focus on anything from social or climate impact to the Metaverse, Betterment has an option for you.
Want a little more control? Check out Betterment’s flexible portfolios which allows more customization options. The best part about Betterment is that the trading platform will make automatic adjustments to your holdings to help you best avoid market volatility.
- A great choice for the hands-off investor looking for an automated solution at a reasonable price
- Automatic portfolio rebalancing
- Ability to choose from a variety of pre-built portfolio themes
- While it may be one of the top online brokers in terms of automated investing, it’s not designed for the active, self-directed investor
See Related: Best Betterment Alternatives | Apps Like Betterment
While WeBull’s reputation largely hinges on its social media style investor interaction and frequent signup bonuses, it’s actually got plenty to offer as a trading platform. You can open an account with no minimum investment and enjoy access to commission-free ETF trading, complete with plenty of great tools.
WeBull also allows users to buy and sell stocks, options, and an impressive number of cryptocurrencies, all for free. WeBull is a nice trading platform for active traders, as it offers tools like lists that show the most active and popular ETFs each day.
Users can access their online brokerage account online, via WeBull’s customizable desktop platform, or via its mobile smartphone apps. Enjoy real-time streaming data, factional ETF trading, a free paper trading account, and plenty of great educational resources.
- WeBull is a no-cost brokerage that allows customers to buy ETFs, stocks, crypto and listed options for free
- Constantly updated lists and real-time streaming data make it a great option for active traders who are into day trading assets such as leveraged ETFs
- Excellent educational offerings and a sense of community
- If WeBull’s ETF screening capabilities were as comprehensive as its stock screener, it’d likely be a far more common contender for the best ETF brokers
FirstTrade Securities is another fantastic option if ETF trading is a large part of your investment strategy. While other brokerages may allow users to buy and sell a handful of commission-free ETFs, FirstTrade offers a selection of over 2200.
Not only does FirstTrade offer access to every ETF available on the market, but also more commission-free ETFs than any other broker. The platform also includes an ETF screener as well as Morningstar research to help you buy and sell ETFs that best align with your goals.
In addition to its ETF investing perks, FirstTrade also offers commission-free mutual funds and no contract fee options, both of which are rarities among brokerage services.
- Free automatic reinvestment option if ETFs pay dividends
- Over 2200 ETFs and 11,000 mutual fund options to choose from
- One of the best ETF brokers in terms of commission-free offerings
- No Forex or futures trading, which may not be a huge deal for some investors
See Related: Best Ethanol Stocks and ETFs to Invest in Today
16. J.P. Morgan
J.P. Morgan may be the best ETF broker if you’re a Chase customer, as the two companies have become one through a series of mergers. The company now offers two online trading account options, including a free, $0 minimum self-directed account or an automated option with a $500 minimum investment.
Customers can enjoy trading ETFs, as well as stock and mutual fund offerings for $0 commissions. The brokerage also offers a range of tools, such as model portfolios and a portfolio builder to help you diversify your asset classes. If you prefer to get the investment advice of a professional, J.P. Morgan has you covered.
You can reach out to a professional investment advisor over the phone or through email. If you’re a current Chase customer or simply an ETF investor looking for a straightforward online broker platform, then J.P. Morgan is worth checking out.
- J.P. Morgan’s trading platform seamlessly integrates with Chase accounts, making it a nice option for current customers
- No commissions on stock, mutual fund, or ETF trades
- A straightforward, easy-to-use platform for the beginning or intermediate investor
- No fractional trades
ETFs vs Mutual Funds and Index Funds
There’s a lot of confusion out there over the difference between these three assets, probably because in some ways they’re very similar. In order to understand their similarities and differences, let’s start at the very beginning with the invention of:
- Mutual Funds
According to the Federal Reserve, mutual funds as we know them today have been around since 1924. The idea behind mutual funds is that while every investor knows the value of diversification, not everyone can afford to purchase 90 different individual stocks. Imagine a mutual fund as a large collection of money that you can contribute to by purchasing a share.
The more shares the fund sells, the more money it collects from multiple investors. So what happens to all that cash? That’s where the fund manager comes in. The manager’s job is to invest the money in a collection of stocks, bonds, and other securities, creating a sort of group portfolio.
In this way, each share represents a small portion of ownership in every security in the fund. The only issue is that, because the fund manager actively manages the fund’s investments, mutual funds often come with higher expense ratios.
- Index Funds
Index funds were introduced in the 1970s as an answer to the high fees often charged by mutual funds. Rather than being actively managed by a fund manager, index funds seek to track the returns of a specific stock market index, such as the S&P 500.
Since the indexes are already pre-set, index funds can be passively managed and therefore tend to charge much lower fees. By purchasing a single share in an S&P 500 index fund, for instance, an investor can gain exposure to every company in the index, without having to actually purchase 500 individual stocks.
ETFs were the latest of our three asset classes to come along and are much like their predecessors in that they allow investors to buy into a sort of group portfolio. Unlike mutual funds, however, which you can only buy or sell once a day, ETFs can be traded any time the stock market is open. While some ETFs may track certain indexes, others are composed of a much wider set of assets, often based on a particular theme.
Some ETFs consist of a group of stocks from a specific sector or theme, such as biotech or ESG companies. Other ETFs revolve around things like currencies or commodities. Unlike mutual funds and index funds, there are even inverse ETFs, which provide an easy way for investors to bet against a certain sector or index, even if they don’t have the ability to short-sell individual stocks.
There are also leveraged ETFs, which are intended specifically for day traders. These funds are risky, but allow investors to make 2x to 3x the daily profit (or loss) off of the underlying securities in the fund.
See Related: Best Climate Change Mutual Funds
Understanding Expense Ratios
Expense ratios are also an important consideration when selecting index funds. While the operating costs of ETFs do tend to be much lower than those of mutual funds, they do still exist. That’s why it’s important to check out a given fund’s annual expense ratio, as a higher one can substantially cut into your long-term profits.
Expense ratios are also one of the reasons that you want to shoot for a brokerage that doesn’t charge commissions for ETF trades. While this may not be a huge deal if you buy ETFs you plan to hold until you retire, commission costs can add up quickly if you’re a more active investor.
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