4 Best ETF Trading Forex Brokers for 2024

List of Forex Brokers for ETF Trading

What is ETF?

An ETF, or Exchange-Traded Fund, is a type of investment fund that is traded on stock exchanges, much like stocks. It holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, though deviations can occasionally occur.

ETFs offer investors a way to buy a broad portfolio of assets in a single transaction, which provides convenience and diversification. They are popular among investors for their low expense ratios and fewer broker commissions than buying the stocks individually. Moreover, ETFs are known for their high liquidity, meaning they can be bought and sold easily throughout the trading day.

How did FXEmpire Select the Best Forex Brokers for ETF Trading?

• We only selected brokers with a high overall score in our proprietary broker rating system.
• We explored the broker’s tradable instruments to ensure a wide variety of ETFs are available to trade on.
• We opened live trading accounts to examine the broker’s trading fees and their competitiveness against the industry average.
• We tested each broker’s trading platform to determine its user-friendliness, ease of use, and the number of helpful trading features.
• We verified each broker’s regulatory license to ensure they are authorized to provide financial trading services in their regions.

Our team of experts has identified each broker’s strengths and weaknesses using FX Empire’s comprehensive methodology. You can read more about it and how we conduct our tests here.

Now, let’s dive into the selected brokers.

How to choose an ETF trading broker?

Here is a quick guide on how to choose an ETF trading broker.

What types of ETFs can I trade?

At the start of 2003, 123 ETFs were listed on the New York Stock Exchange. Now, this number exceeds 3,000, while nearly 9,000 ETFs are available globally.

Below, I cover the popular ETFs available to trade:

• Sector ETFs: Track the performance of individual sectors such as finance, energy, retail, and technology.
• Country ETFs: Track the performance of individual countries such as Brazil, South Korea, Germany, and North America.
• Index ETFs: Track the performance of global indices such as the S&P 500, FTSE 100, DAX 40, and Nikkei 225.
• Bond ETFs: Track the performance of corporate or government bonds.
• Commodity ETFs: Track the performance of commodities such as uranium, lithium, gold, silver, and cotton.
• Currency ETFs: Track the performance of an individual currency or a basket of currencies.

Why trade with a regulated broker?

When trading ETFs, it is essential to do so with a well-regulated broker. Regulators obligate brokers to adhere to stringent regulations dictating fund management and trade execution. Breaching these rules can result in substantial fines and the loss of their license. Regulatory oversight provides a much safer trading environment for individual traders.

However, not all financial regulators are equal. In our broker rating assessments, regulators are categorized into three tiers:

• Tier-1 regulators encompass esteemed financial authorities like the UK Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), and others.
• Tier-2 regulators, while less renowned, maintain rigorous standards; examples include the Dubai Financial Services Authority (DFSA) and the Financial Markets Authority of New Zealand (FMA), among others.
• Tier-3 regulators are typically located in offshore jurisdictions, such as the Vanuatu Financial Services Commission (VFSC) and the Securities Commission of the Bahamas (SCB).

The highest level of investor protection is provided by Tier-1 regulators. Brokers regulated by authorities such as the UK FCA, IIROC, CySEC, and ASIC are mandated to segregate client funds from their own and provide negative balance protection to prevent accounts from dipping into a negative balance.

Check out our guides on Best CySEC-regulated forex brokers and Best FCA-regulated forex brokers.

Furthermore, brokers regulated by the FCA, IIROC, and CySEC must participate in compensation schemes, which ensure the safeguarding of client funds in case of broker insolvency. To verify a broker’s regulatory status and authorizations, individuals can review the broker’s legal terms and conditions and consult the regulator’s register in the broker’s operating country.

Exercise caution with unregulated brokers, as they operate without strict rules governing the handling of your funds. Entrusting funds to unregulated brokers poses significant risks, as there are no legal avenues for recourse in case of theft or fraud.

Read more about Best regulated forex brokers.

What fees to consider when choosing an ETF broker?

The significance of trading fees on your overall profitability cannot be overstated. Brokers aim to maximize their fees, while traders seek to minimize them. When selecting a broker, it is crucial to consider various fees, including:

• Spread: The difference between the buy and sell prices.
• Commission: Charges for executing buy or sell orders.
• Overnight/swaps: Fees related to maintaining leveraged or margined positions overnight.
• Payments: Charges associated with deposits and withdrawals.
• Inactivity: Fees applied when there is no activity within an account.

Discover Best lowest spread forex brokers and Best low swap fees forex brokers.

A broker’s trading fees should be transparent and prominently displayed on their website. The absence of this information upfront may indicate that the broker is withholding essential details, which could be a warning sign for investors.

When trading ETFs, you may encounter management fees. As the ETF is managed by an ETF provider such as iShares, SPDR, Vanguard, VanEck, and others, there is a cost associated with doing so. This is typically known as the expense ratio, but the investor does not pay it directly. Instead, the expense ratio is already reflected in the daily price of the ETF.

How to choose the best ETF account type?

Drawing from my extensive experience, I’ve observed brokers offering one to seven trading accounts, each differing in tradable instruments, minimum deposit thresholds, and fee structures. The primary difference among these accounts typically centers on their fee systems.

Trading accounts can generally be categorized into two main types: commission-free and commission-based.

• A commission-free account imposes no charges for buying or selling, but the broker marks up the spread, resulting in wider spreads.
• A commission-based account levies a fee for buying or selling, as it provides access to price quotes directly from the stock exchange without any broker mark-up, resulting in narrower spreads.

The selection of a trading account largely depends on the individual trader’s preferences and trading approach. Beginners might favor a commission-free account as it simplifies risk management decisions with costs bundled into the spread. Conversely, active traders may lean towards a commission-based account to take advantage of reduced spreads, facilitating precise trade execution.

Read more about Best STP forex brokers and Best ECN forex brokers.

What is ETF leverage, and how does it work?

Leverage has played a pivotal role in the growth of ETF trading. Traditionally, to buy shares in an ETF, a trader would go to a stock broker to purchase them. If they wanted to purchase $5,000 worth of shares in an ETF, they would need to have the $5,000 in capital to do so.

However, when trading ETF CFDs, traders do not need the total trade size to open a position. In fact, CFDs allow traders to control larger position sizes using a small deposit.

For example, if a broker offers an ETF CFD leverage ratio of 1:5, it means that only $1 of your capital is needed to control a position size five times larger. In essence, you can oversee a position valued at $5,000 with just $1,000.

Respected regulatory bodies such as the UK’s FCA, CySEC, ASIC, FSA Japan, and IIROC enforce retail trading leverage restrictions for stocks and ETFs at 1:5 to ensure a safer trading environment. Conversely, many offshore and unregulated brokers may offer higher leverage, occasionally up to 1:500. It’s advisable to exercise caution when dealing with such brokers.

Explore Best forex brokers with high leverage.

Leverage has the potential to magnify both profits and losses. Your profit or loss is calculated based on the entire trade value, not just the margin you put up. If there’s insufficient capital in your account to handle your trade value, the broker may issue a margin call and automatically close your trades, resulting in unexpected losses. Therefore, it’s prudent to approach brokers offering excessively high leverage with caution.

How to choose a suitable ETF trading platform?

A trading platform acts as your gateway to the world’s financial markets. Some of the most common trading platforms include:

• MetaTrader 4 (MT4): A well-known platform featuring real-time charts, advanced order tickets, diverse timeframes, and integrated technical analysis indicators and drawing tools. Read more about best MT4 brokers.
• MetaTrader 5 (MT5): An upgraded version of MT4 offering a broader range of execution styles, order types, timeframes, and indicators. Read more about best MT5 brokers.
• cTrader: Tailored for high-frequency trading and scalping, this platform is specifically designed for algorithmic traders. Read more about best cTrader brokers.
• TradingView: A web-based social trading platform equipped with advanced charting and research features across global asset classes. Read more about best TradingView brokers.
• In-House Proprietary Software: Some brokers develop their custom platforms with additional features compared to third-party platforms.

Some brokers offer demo trading accounts, allowing you to test different platforms in a virtual environment. This provides an excellent opportunity to determine which trading platform best suits your trading style.

Check out our dedicated guide on Best forex trading platforms.

What to avoid when choosing a forex broker for ETF trading?

Here are some pitfalls to avoid when choosing a forex broker for ETF trading:

• Unregulated Brokers: Trading with unregulated brokers entails significant risks. If the broker engages in fraudulent activities or misappropriates your funds, there are no safeguards to recover your capital.
• Lack of Transparency: Difficulty determining a broker’s regulatory status, trading fees, and terms indicates a lack of transparency. This lack of clarity is a red flag that the broker may be concealing important information.
• Absence of Physical Presence: Brokers without a physical office and employees in a reputable region raise concerns. A reputable broker typically maintains offices in well-known financial regions and employs a substantial workforce to manage its operations.
• Unrealistic Profit Promises: Brokers that make exaggerated promises of substantial profits are likely not being honest and may be operating without proper regulation. It is advisable to steer clear of such brokers to avoid potential risks.

How to avoid forex and CFD scams?

Regrettably, the forex and CFD sectors are rife with fraudulent activities. Here are some guidelines to steer clear of them:

• Trade exclusively with brokers regulated by esteemed financial authorities and validate their licenses through the official regulator’s website.
• Confirm that the broker maintains a physical office situated in a jurisdiction subject to stringent regulatory standards.
• Ensure access to responsive customer support for timely assistance with queries or concerns.
• Perform thorough due diligence by scouring online news articles and broker reviews.
• Opt for well-known payment methods for deposits and withdrawals.
• Carefully examine the broker’s terms and conditions before committing to any agreements.

Our Methodology

We utilize a proprietary rating system to evaluate brokers, analyzing 250 data points across the following essential categories, including:

• Trustworthiness: We verify brokers’ authorizations and licenses with the relevant regulatory bodies in their respective operating countries.
• Fees: We assess trading fees by establishing live trading accounts and comparing them to industry standards.
• Trading Platform and Tools: We evaluate trading platforms to assess the breadth of features and user-friendliness.
• Tradable Instruments: We ascertain the diversity of tradable instruments to ensure a wide range is available.
• Customer Support: We engage with the customer support team to evaluate accessibility, knowledge, and helpfulness.
• Payment Methods: We scrutinize available deposit and withdrawal methods, along with associated fees and processing times.
• Account Types: We examine the features and advantages of each account type, including execution methods, minimum deposits, and more.
• Research and Education: We gauge the quality of the broker’s research and educational materials.

Here, you can learn more about our review process.

For this guide, we ensured that each broker offers a robust selection of ETFs to trade and provides feature-rich and user-friendly trading platforms with competitive fees.

Meet Our Writers

The team of forex and CFD writers and editors at FX Empire is composed of trading industry professionals and seasoned financial journalists. Our writers have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.

Related Broker Guides

• Best Forex Brokers
• Best Forex Brokers for Scalping
• Best Gold Trading Brokers
• Best Oil Trading Platforms
• Best Metals Trading Platforms
• Best Commodity Trading Brokers
• Best Forex Brokers for Beginners

FAQ