What is an ETF Broker?
You may have come across the term ETF at some point while checking out a few online brokers and stopped to wonder what exactly it entailed. An ETF is actually quite a straightforward concept to understand but it can at times be confused with a mutual fund by less-experienced traders.
We can show you how to buy ETFs in Australia as well to help you better understand online ETF trading as a whole. But for now, let’s get to what an ETF actually is. An ETF differs from a mutual fund in that it can trade all throughout the day whereas a mutual fund only trades once at the end of every day.
An ETF or an exchange traded fund is essentially a fund that holds many underlying assets. A security that contains many securities, an ETF is called an exchange traded fund because it is traded on an exchange much like you would trade individual stocks.
As we mentioned before, ETFs will have their prices change throughout the day as more people buy and sell shares. ETFs can hold many different investment types that include things like stocks, bonds, commodities and currencies. Generally, ETFs track an underlying index like the S&P 500 for example.
What are the benefits of ETFs?
The beauty of ETFs is that they provide traders with an opportunity to diversify their portfolio. You can own hundreds and even thousands of different stocks across various markets by simply owning one ETF.
However, you don’t have to extend across multiple industries but can also focus your ETF on one specific sector like pharmaceuticals or technology for example.
There are a couple of different types of ETFs out there for you to choose from. You have your currency ETFs which invest in foreign currency like the British sterling or the Euro. Commodity ETFs allow you to invest in things like precious metals, crude oil and energy.
Industry ETFs will generally track a specific industry sector like technology, crude oil or pharmaceuticals. And lastly, bond ETFs allow you to invest in different bonds that include government bonds, corporate bonds or municipal bonds.
There is one more way for you to use ETFs and that is by essentially going short. You call this an “inverse” ETF. It will attempt to turn a profit from stock declines in the market and then repurchasing the stock at a lower value.
The opportunities with an ETF broker specifically will be even better as you will generally see much lower trading fees on sites that make ETFs their main source of attraction. However, if the idea of ETFs and an ETF broker Australia doesn’t interest you then we recommend checking out the best Forex broker Australia instead.
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What to Look for in an ETF Broker Australia?
Now that you know a little bit more about what an ETF actually is, it’s time to understand what to look out for in a top ETF broker. There are a number of important factors that make up quality ETF brokers Australia. Here are a couple that we think are the most important:
The best ETF brokers Australia should make a number of different payment methods available for their traders to choose from. Traders need to top off their accounts at will which means they need a decent selection of methods to choose from. Whether that be via wire transfer, a credit/debit card or a cheque, traders need to offer a payment method that suits their interests.
When it comes to looking for the best ETF brokers Australia, one thing that you will always run into is trading fees. Now, you may find an ETF broker that is generous and doesn’t charge any commission fees but you will certainly run into inactivity fees, varying spreads and certain account fees. The trick here is to find an ETF broker that is not going to charge you exorbitant fees on your trades or on your account.
Remember, day-trading fees are part and parcel of trading online with just about every brokerage firm you can find. Try to check out a few different brokers that offer you the option to buy and sell ETFs and compare their fees.
One of the best facets of ETFs is that they provide you with lower average costs because you are not having to buy multiple individual stocks. So, make sure the broker you want to use is not limiting this advantage in any way.
Range of markets
Before you settle into any online broker it’s important to know exactly what kind of markets you can expect to find on the platform. The best ETF brokers will not limit the number of markets you can access with your exchange traded funds.
You should at the very least have the ability to buy and sell ETFs that contain a plethora of different stocks and shares, bonds, commodities and precious metals or oil.
You also want to know that you can participate in every type of ETF on these platforms such as currency ETFs, bond ETFs, commodity ETFs and even industry ETFs. If your plan is to track an industry like technology then make sure the broker allows you to do this before you jump at the first ETF broker you see.
The beauty of ETFs does of course lie in the saving of overall costs but it also lies in the diversity that should be available to you as well.
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ETFs, like many other financial instruments, require you to stay on top of any market changes and deviations from your initial strategy. Doing this all on your own can be a taxing experience and require several hours at a time for you to really grasp these changes. Only for them to go changing again the next day. This is why you should only join an online ETF broker Australia if they are making enough trading tools and market analysis available to you.
The trading tools available to you should never be limited to just one option. Even if that option is detailed and well-curated. No, you will be needing a few different tools at your disposal. Things like advanced charting capabilities, technical analysis and educational tools all add up to you being able to stay on top of the market. Furthermore, this technical analysis should include things like analyst ratings from multiple sources, real-time news items, and applicable market and sector data.
Never underestimate the importance of good trading tools and their ability to help you improve and maintain your ETF trades on these platforms. It is a pivotal part of any traders’ experience on these sites and as such should be one of the first things you look out for when choosing an online ETF broker Australia. Trading tools are also essential to the best online crypto brokers Australia.
How to Find the Best ETF Online Broker?
We have given you a couple of the important aspects to look out for in the best ETF online broker Australia. Searching for these brokers is still going to require some time and effort as you conduct your research and scour the internet for a suitable option. This is completely fine and we always recommend doing your own homework before signing up to any of these sites.
With that being said, at Wetten.com AU we want to help cut out any of those initial research growing pains by directing you towards some of our expert in-depth reviews that cover every aspect of these ETF brokers Australia.
Our online broker reviews take a much closer look at what you can expect to find on these platforms in terms of markets, trading tools, website usability, overall security and much more. We give you the full breakdown on how easy buying ETFs in Australia are on the sites and how efficient the trading platforms are as well.
All our reviews contribute towards us being able to curate an in-depth online broker comparison that will help you sieve through all the available online brokers out there to find the ones that are going to provide you with the best ETF trading Australia experience around.
You can also navigate your way to our ranking system that is also based off of our reviews. This way, you can see all the best ETF brokers in one place and then start to check them out yourself and make your own decision about which broker will suit you best.
The point of all of this is to make your life easier. We pride ourselves on convenience and making our readers’ lives a little easier by cutting out any unnecessary research they may have otherwise conducted themselves. We can also help you to find the best online brokers Australia as well.
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We would be remiss if we didn’t mention the value there is in ETF brokers that offer you the chance to sign up for a demo account. The best online ETF broker should be offering you this feature as an option. But what would be the point of a feature like this?
It’s true, you won’t be able to make any real money at all when using a demo account on any of the best ETF brokers Australia platforms. However, there are a number of different benefits for traders when they use a demo account. You may be wanting to venture into buying and selling ETFs for the first time.
Or you may even just want to try out some new strategies to see how they could theoretically play out. A demo account allows you to put these strategies to the test without losing any real capital investment into your account.
Once you have used the demo account you will be more accustomed to not only ETFs and ETF strategies but to the actual brokers’ platform as well. So, while you won’t be making any real money off of a demo account, the benefits are great for newer traders to improve their strategies and overall knowledge of ETFs.
Using a demo account also helps you out once you have found one of the best online options brokers Australia as well.
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Our ETF Broker Picks – buying ETFs in Australia
Having come this far in our review you now know what to look for in the best ETF brokers Australia and that you can always visit our site and use our rankings and ETF broker comparison tool to help make your search a lot easier.
Despite all of that, we still want to let you know about a few of our personal favourite brokers that are great for trading in ETFs. Here is a selection of brokers that would be the ideal place for you to start your ETF trading Australia endeavours:
There can be no doubt that eToro is not only up there as the best broker for ETF Australia but it is also one of the best online brokers. This online broker is like the Rolls Royce of online trading platforms. The website is easy to use which makes locating your ETF trades easy. All the ETF capabilities that the broker has to offer can be located under the “top markets” tab.
ETF trading at eToro is a breeze and is only made better by the number of educational tools available on the site. Users can check up on news and detailed analysis or they can read the in-depth reviews of the current state of financial markets. All of these tools only serve to make your ETF trading experience better and more well-rounded.
You will also find that the fees on eToro are transparent but also very fair to the traders. It’s really not difficult to see why so many people have signed up to eToro as it provides a platform that is intuitive and easy to use. New users can even test the site out with the demo account option which only makes us rate the platform even more highly. We highly recommend that you check eToro out as your first broker for ETF trading. eToro also happens to be one of the best online social trading brokers Australia as well.
You won’t find many brokers as stable as Charles Schwab in general. The broker offers an exceptional trading platform with a number of different ETF markets available to trade with. Charles Schwab also makes the process of buying ETFs in Australia very easy. It is also undeniably the best broker for ETF investing as well.
Not only are there a number of ETF markets to choose from but the real winner here for ETF traders is the fact that Charles Schwab charges zero commission fees on ETF trades. Making it arguably the cheapest ETF broker Australia. Charles Schwab loves a good ETF trader which is why their educational tools also provide you with the ETF Select list.
This list details investor-friendly funds and a fund’s overall track record and its general suitability for investors. For the ETF trading fans who don’t necessarily want to deposit large amounts of capital into their account, you won’t find many better ETF brokers than Charles Schwab as there is a $0 minimum account requirement. It is right up there as the best broker to buy ETF with.
Charles Schwab is the perfect place for new and experienced ETF traders alike. The platform is an exceptional piece of work that makes buying and selling ETFs oh so easy. We may be listing a couple of different brokers here but truth be told it’s really tough to put any of them above the well-crafted trading platform that is Charles Schwab.
It has to be considered up there as the best ETF trading platform Australia. You can also check out why Charles Schwab is one of the best online futures brokers Australia as well.
Interactive brokers is another fantastic option for traders who are looking for a broker that caters to your ETF needs. Interactive Brokers has a well laid out platform that is easy to navigate and use.
But where Interactive Brokers really shines is with its own unique feature. As we mentioned earlier in our review, mutual funds are fairly similar to ETFs in a lot of ways but tend to have higher costs. Interactive Brokers offers users a tool that is essentially a mutual funds replicator. This is great for traders looking to move over from mutual funds to ETFs. The tool will help you to find lower-cost ETFs that are very similar to more expensive and less liquid mutual funds.
You can also find educational tools on the platform that are tailored for ETF research. There are a plethora of ETF guides on the site that genuinely cover everything you could hope to know about this trading format. You can also use the market scanner on the Mosaic tool which will help you to specify ETFs as an asset class. The range of educational trolls available makes Interactive Brokers one of the best online brokers for beginners around.
Where Charles Schwab is probably still the overall best ETF broker Australia, Interactive Brokers runs in at a close second if only for its phenomenal educational section on ETFs. It is a great platform to learn more about exchange traded funds and the subsequent varying markets therein. You won’t find many better for broker ETF trading.
And so we come to the end of our piece on the best ETF brokers Australia. Finding the best ETF brokerage does not need to be all that difficult. All you need to do is keep a few things in mind like what to look out for with these platforms and what they offer. Of course, you can always visit our Wetten.com AU site to learn more about ETFs and where to find the best ETF brokers.
We highly recommend checking out some of the ETF brokers that we listed, in particular Charles Schwab, as these brokers are well-renowned and are secure for you to use. You can’t put a price on peace of mind. If you would like to expand your trading repertoire we recommend checking out our pieces on the best CFD brokers Australia or the best online stock brokers Australia.
ETF Broker Australia Review FAQ
❓ What is an ETF broker?
If you are someone who is just now branching out into ETF trading you will need to know more about what it entails and how you can get started. At Wetten.com AU we try to make this process and its growing pains go as smoothly as possible. We give you a detailed breakdown of what an ETF broker is and what they are offering you.
🤔 What should I look for in the best ETF platform Australia?
There are a couple of different aspects that make a quality ETF trading platform Australia. Our ETF broker guide for beginners will point out what some of these aspects are and how you can judge if these ETF brokers are fulfilling them adequately. You will know exactly what to look for in the best online broker for ETF Australia after reading our guide.
🔐 Are ETF brokers safe to use?
ETF brokers are no different from other online brokers in terms of how safe they are to use. This doesn’t mean that all brokers are safe but rather that they all need to follow the same protocols and get through the same red tape. Our guide on ETF brokers will let you know how you can tell if an ETF broker is safe to use or not.