How to choose the right ETF broker for you?
Choosing an ETF broker can seem like a daunting task, with so many different brokers and platforms out there. Understandably, you might feel overwhelmed and unsure of where to begin. Let us help: we’ve created a guide that breaks down the basics of choosing an ETF broker for you.
So let’s say you want to enter the world of investing and start with Exchange Traded Funds (ETFs). What do you do now? There are tens of thousands of them on the market. Do people not say that there is a perfect match for everyone? Well, as it turns out, they don’t.
First, where would you like to invest money? Would it be US stocks, European companies or maybe Asian equities? It is an important decision because if we take a quick look at Vanguard’s fund list, we will see roughly six thousand funds that track US companies and another three thousand funds for international markets.
So now we know what kind of ETFs we’d like and roughly how many funds exist for each market. However, we still don’t know how to choose the right broker for us, and I promise this is the last step before you get your first ETF.
How to choose an ETF Broker?
Here are some key things to consider when choosing your next ETF broker:
It is perhaps one of the most important aspects to consider when choosing a new brokerage account or trading platform. The nature of exchange fees varies from one brokerage to another – some exorbitant charge rates, whereas others offer valuable discounts that will benefit you in the long run.
Generally speaking, how much money you save in exchange fees will depend on the size of your portfolio.
Ensure that the online tool you use to make trades is adequately equipped for success – if a broker can’t deliver real-time data, it’s all for nought. Having access to accurate and fast market data is integral to trading success. While it may seem like a small thing, you will get stuck with an outdated system that will only add unnecessary stress to an already stressful job.
Make sure your broker offers free charting software since this allows you to visualize the market before you open any positions.
While most brokers offer similar features on their trading platforms, some might have exclusive extras that others don’t, such as mobile trading apps or personal investment advisors. These add-ons might not be necessary for everyone’s needs, but they could come in handy if you need some extra help managing your investments.
Range of investments
Many brokers offer access to almost every kind of security out there – even the most esoteric ones are accessible via some platforms – so finding one that can meet your specific needs is vital. For example, if you only ever want to invest in foreign bonds, make sure that your broker offers this asset class before signing up with them.
What’s more, look for a brokerage house that also supports other types of instruments like commodities and mutual funds.
While ETFs are the most accessible type of investment product in the market today, some brokers might only offer a limited range of funds. If you rely on ETFs for most of your trades, make sure that the brokerage account you choose supports ETFs and offers competitive pricing on trading them – this will save you time and money when it comes to placing orders.
There are many different factors to consider when choosing an online broker; getting overwhelmed and giving up before even beginning can be easy. Luckily, we’ve created a helpful guide that breaks down the basics into simple steps, giving you a great starting point from where you can begin exploring all your options. Now go out there and pick a great broker.