During the past 10 years, exchange-traded funds (ETFs) have grown 22.7% annually, and our best brokerages for ETFs provide extensive account types, research, analysis, lists, and screeners for investors. Whether you’re seeking index ETFs for a core portfolio, actively managed ETFs, commodity ETFs, or want to short the funds, there is an investment brokerage firm that will meet your needs. Beginners through expert ETF investors will discover the best ETF brokerages for fundamental, tactical, or balanced/core investing. Cash-conscious investors will appreciate that most firms are considered among the best brokers for commission-free ETFs.
Our comprehensive research, data analysis, and live broker platform demos have uncovered that Fidelity offers the best overall experience for ETF traders and investors due to its large selection of ETFs, top-tier number of screening metrics, detailed research capabilities, and ETF Portfolio Builder, and more. Fidelity is just one of 26 online brokers that we evaluated based on 89 criteria, including available assets, account services, user experience, and additional features.
Best Online Brokers for ETFs
- Best Overall: Fidelity
- Best for ETF Research: Interactive Brokers
- Best for ETF Screeners: Charles Schwab
- Best for Experienced Buy and Hold Investors: Vanguard
- Best for Pre-Built ETF Portfolios: E*TRADE
Best Overall: Fidelity
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- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trades
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Why We Chose It
Fidelity brings over 2,500 ETFs, 90-plus screening metrics, detailed research capabilities, and an ETF Portfolio Builder to clients with no account or trading fees. With multiple account types and investment assets, ETF investors will find what they need at Fidelity.
Pros & Cons
Pros
Scores of ETF screening options
No minimums or account management fees
Superb research reports and ETF comparison tools
Cons
Limited branch locations
Higher broker-assisted trade fees
Overview
Fidelity Investments was founded in 1946 by Edward C. Johnson in Boston. Johnson was president for over 25 years and the company continues as a family-run firm today with Abby Johnson in the chair seat since 2014. Fidelity is our overall best broker for ETFs for good reason. Fidelity offers more than 2,500 commission-free ETFs, industry-leading ETF research capabilities, fractional ETF shares to buy, in-depth screening capabilities, and a customized managed ETF basket called the Portfolio Builder. Fidelity might be considered the best and cheapest online broker for ETFs due to fee-free trading, extensive research, and overall low fees.
Fidelity's stand-out ETF screening includes the following broad categories:
- Fund Family
- Market Cap
- Sector
- Fixed Income
- Socially Responsible
- Active ETFs
- Digital Assets
The additional 80 screening characteristics provide users with expert tools for ETF selection. Once ETFs are selected, users can delve into the specific ETF research page to see a profile, customizable chart, detailed quotes, top holdings, short interest, analyst rating, and a news feed. Other drop-down menus deliver fund composition, distributions and expenses, ratings and analysis, performance and risk data, comparisons, and more. With multiple account types, no account maintenance fees, and superb ETF screening, Fidelity has earned our best broker for ETFs.
Best for ETF Research: Interactive Brokers
- Account Minimum: $0.00
- Fees:$0.00 commissions for equities/ETFs available on IBKR’s TWS Lite, or low costs scaled by volume for active traders that want access to advanced functionality such as order routing.$0.65 per contract for options on TWS Lite; that is also the base rate for TWS Pro users, with scaled rates based on volume. $0.85 per contract for futures.
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Why We Chose It
Interactive Brokers (IBKR) provides a powerhouse of investment and research tools, from screeners with scores of factors to tools for fundamental and technical investors. The IBKR platform caters to the global investor and also delivers multiple account and order types, including options and derivative ETF investing.
Pros & Cons
Pros
Expansive array of ETF screening criteria
Links to Morningstar data
Global market access
Extensive breadth of financial assets
Platforms to suit all experience levels
Cons
Most ETF commissions are free although some trades levy low fees
TWS can be intimidating to learn
No in-platform backtesting
Overview
Publicly traded Interactive Brokers (IBKR) is headquartered in Greenwich, Connecticut, and was founded by chairman Thomas Peterffy in 1977. The international investing powerhouse was one of the first adopters of technology for financial markets and continues to innovate. We named IBKR the best broker for ETF research since it has many proprietary features to aid in ETF selection for fundamental and technical investors. Those interested in IBKR can create a free account with paper trading privileges to test-drive the platform.
The IBKR Market Scanner is an advanced screener for all assets. For ETFs, screening tools include over 100 criteria for research. Screening topics include fundamental, technical, ESG indicators, bullish or bearish sentiment,P/E ratio, sales and earnings growth, and many more. In the Fundamentals Explorer screen, users can input an ETF ticker for details including allocation by region/sector, technical indicators, social sentiment, analyst ratings, and performance analytics. You can also access Morningstar data through Fundamentals Explorer.
There’s also a free membership available to access ETFguide. This guide includes ETF recommendations, research, lists, and a margin of safety tool. However, we experienced some problems logging into the platform. Active traders will find that IBKR is also among the best brokers for ETF trading with short and options opportunities.
Best for ETF Screeners: Charles Schwab
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0.65 per contract for options
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Why We Chose It
Charles Schwab presents an easy-to-use ETF screener with roughly 100 screening characteristics. With commission-free trading and multiple account types, ETF investors can quickly and accurately find the best funds for their specifications.
Pros & Cons
Pros
Pre-built screens, comparison tools, and extensive factor screeners
Select lists make ETF selection easy with pre-vetted funds
Low-fee Schwab ETFs
Industry-leading educational content
Cons
ETF quote and information page lacks the details of some competitors
No in-depth or third-party ETF research
No fractional shares for ETFs
Overview
Founded by Charles Schwab in San Francisco in 1971, the company launched the first discount brokerage firm and is the largest publicly traded investment services firm in the U.S. Schwab recently merged with TD Ameritrade and moved its headquarters to Westlake, Texas.
The Schwab ETF home page is replete with resources, including:
- ETF screener: Set your criteria and search for ETFs that match your goals.
- ETF vs. mutual fund comparison: Compare up to 5 ETFs and/or mutual funds.
- Schwab ETF Select list: Choose from professionally evaluated ETFs.
- Find ETFs and mutual funds: Get a list of funds that align with criteria such as category, ratings, and transaction fees.
- ETF compare: Compare up to 5 ETFs.
- Schwab ETFs: Delve into Schwab’s low-fee ETFs.
- Personalized Portfolio Builder: Create a portfolio using a pre-made list of ETFs aligned with risk profiles from conservative to aggressive
Schwab wins the Best for ETF screeners award with one screener for ETFs and another which includes the pool of both ETFs and mutual funds. The 100-plus ETF screening factors span fundamental ratios, more than 30 technical indicators, Morningstar ratings, risk analysis factors, performance, sector, geographical region, and more. Bond investors will appreciate the three screening factors, while income investors can view several distribution screens while searching for the best dividend ETF. Those who prefer pre-made screens won’t be disappointed.
Sample Schwab predefined ETF screeners:
- Commodity
- Balanced
- Currency
- Large Cap
- Small Cap
- International
- ESG
- Near Price Highs and Lows
Schwab's ETF screeners and lists are easier to use and access than those at IBKR. Schwab caters to beginners through sophisticated investors, while beginners might shy away from IBKR. If Schwab’s Personalized Portfolio Builder, with a suggested $5,000 minimum, is too steep for you, E*TRADE’s $2,500 minimum for pre-built portfolios might work for you.
Best for Buy and Hold Investors: Vanguard
- Account Minimum: $0
- Fees: $0/stock and ETF trade, $0 plus $1 per contract for options
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Why We Chose It
Vanguard ETF strategy portfolios are great for buy-and-hold investors seeking a list of diversified Vanguard ETFs to include as core holdings. Users can access ESG, Core, and all-in-one strategy portfolios.
Pros & Cons
Pros
Easy access and screening for Vanguard ETFs
Vanguard ETFs offer strategies for creating a buy-and-hold portfolio
Low fund management fees
Cons
No screening for non-Vanguard ETFs
Limited platform capabilities and features
Not suitable for intermediate and advanced ETF traders and investors
Overview
Founded in 1975 by John Bogle, Vanguard is an investor-owned investment firm. The firm is well known for its low fees and extensive list of ETFs and mutual funds. With a stable of 86 Vanguard ETFs, users can build a diversified portfolio with well-regarded ETFs. Screen from the list of 86 Vanguard ETFs by:
- Investment strategy
- Management style
- Asset class
- Risk level
- Investment minimum
- Share class
- Tax efficiency
For a complete buy-and-hold portfolio, choose an ETF strategy and invest in the listed funds. The ETF strategies categorize Vanguard ETFs into groups aligned with your goals for easy investing. Select from ESG ETFs, Short-term ETFs, and Core ETFs. The ETF information page covers all the basics: detailed quotes, performance, fees, portfolio composition, distributions, and fund management. Vanguard ETFs are great for buy-and-hold investors seeking a well-diversified, core ETF portfolio. Beginners will appreciate the extensive educational articles. You won’t use Vanguard for extensive ETF research as ETF analysis is limited to the 86 Vanguard ETFs only.
Best for Pre-Built ETF Portfolios: E*TRADE
- Account Minimum: $0
- Fees: No commission for stock, ETF, and mutual fund trades. Options are $0.50-$0.65 per contract, depending on trading volume.
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Why We Chose It
E*TRADE offers a competitive slate of ETFs and risk-based and customizable pre-built portfolios in addition to top-tier research and advanced trading features.
Pros & Cons
Pros
Certain ETFs trade 24 hours a day, 5 days a week
Good resources for active traders and investors
Customizable pre-built ETF portfolios
Industry-leading mobile apps
Cons
$2,500 minimum for pre-built portfolios
No fractional shares available
Low interest rate for uninvested cash
Overview
Recently acquired by Morgan Stanley, E*TRADE was founded in 1982 in Palo Alto by physicist Bill Porter. An innovator in online trading, E*TRADE began offering online brokerage services directly to individuals in 1992.
E*TRADE's Pre-Built ETF Portfolios are an investor's answer to the question, “Which ETFs to invest in?” These portfolios are ideal if you want to get into the market quickly with a diversified ETF portfolio designed according to your timeline, risk level, and investment goals. E*TRADE's aggressive portfolio is suitable for the young investor who can tolerate a volatile mix of 90% stocks and 10% cash. The conservative pre-built portfolio has a safer allocation with 30% stocks and the remainder in fixed-income investments. Each portfolio has between four and six funds with the opportunity to switch out the ETF recommendations for similar funds.
An ETF investor at E*TRADE will also benefit from a solid screener, list of all-star ETFs, and extended hours and overnight trading. The ETF Investment Ideas screener list includes:
- Top-performing higher higher-yielding taxable bond
- Top-performing higher higher-yielding domestic equity
- Top-performing with option trading availability
- Top low-cost
- Top-performing discounted
- Top-performing diversified domestic equity
Beginner to advanced traders and investors will find ETF investing solutions at E*TRADE, and traders and investors can access the breadth of financial assets and trading platforms with an E*TRADE account.
Research Insights
When selecting a brokerage platform for trading exchange-traded funds (ETFs), investors should prioritize cost-efficiency, variety of offerings, and advanced research tools. Cost-efficiency is critical, as low expense ratios and commission-free trading can significantly enhance overall returns. Investors should look for platforms that offer a wide range of commission-free ETFs and have minimal fees associated with trading and account maintenance.
The platform should provide access to a broad spectrum of ETFs, including those that cover different asset classes, sectors, and geographic regions. This diversity allows investors to build a well-rounded portfolio tailored to their specific investment goals and risk tolerance. Additionally, advanced research tools and resources are invaluable for ETF investors. Features such as comprehensive ETF screeners, detailed fund analysis, and real-time market data can help investors make informed decisions and optimize their investment strategies.
By focusing on cost-efficiency, the variety of ETF offerings, and the availability of advanced research tools, investors can choose a brokerage platform that supports effective and profitable ETF investing. This approach ensures that they can maximize returns while maintaining a diversified and well-informed investment portfolio. - Amrut Deshmukh, Investopedia Research Analyst
The Bottom Line
Investing in ETFs is a low-cost, flexible way to invest in a variety of strategies. These funds are traded during the day, with firms like E*TRADE offering weekday after-hours trading. At IBKR, advanced investors and traders can use options, multiple order types, and sophisticated screeners to craft multiple ETF investment strategies. Beginners seeking pre-made all-in-one ETF portfolios will find them at Fidelity, E*TRADE, and Schwab. Fidelity, our best overall ETF brokerage, delivers extensive ETF research, screening with more than 90 factors, and an ETF Portfolio Builder with no account or trading fees. All investors will benefit from the vast libraries of educational research resources across all of our platforms. Vanguard, a low-fee, solid ETF provider is lax in updating its website, and only screens proprietary Vanguard ETFs. Depending on your goals and investment style, you’re certain to find the best ETF broker among these choices.
Compare the Best Brokers for ETFs
| Criteria | Fidelity | Interactive Brokers | Charles Schwab | E*TRADE | Vanguard |
|---|---|---|---|---|---|
| Overall Star Rating | 4.8 | 4.7 | 4.7 | 4.5 | 4.3 |
| ETF Trading Fee | $0.0 | $0.0 | $0.0 | $0.0 | $0.0 |
| Fractional Share Trading in ETFs | Yes | Yes | No | No | Vanguard ETFs only |
| ETF Screeners | Yes | Yes | Yes | Yes | Vanguard ETFs only |
| ETF Research | Yes | Yes | Yes | Yes | Vanguard ETFs only |
Everything You Need to Know About Brokerage Accounts
Why You Should Trust Us
Investopedia collected and analyzed several criteria that are the most important to readers choosing the right ETF broker to fit their investing and trading needs. We used this data to evaluate 26 online brokerage platforms based on their ETF selection, account and research amenities, costs, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best broker for ETFs since 2019.
Frequently Asked Questions (FAQs)
What Is an ETF?
An exchange-traded fund, or ETF, is a collection of investment securities that provides access to various market segments. With thousands of available ETFs, you can select a fund that includes all types of financial assets.
Sample ETF categories include:
- Index, passively managed
- Actively managed
- Stock
- Bond
- Commodity
- Balanced with stocks and bonds
- Inverse (to bet on market movements)
- Sector (e.g., communications, tech, healthcare)
- Strategy (e.g., small cap, value, momentum, mid-cap
- And more
These funds trade during the day, like stocks, and can be bought and sold through an investment brokerage account.
What Is a Bitcoin ETF?
There are two types of Bitcoin ETFs: a spot bitcoin ETF, and a bitcoin futures ETF. On January 10, 2024, the SEC approved spot bitcoin ETFs for trading in the U.S. A Bitcoin spot ETF attempts to provide investors with access to the current Bitcoin market price and owns Bitcoin within the ETF. There are a variety of fund families that have created Bitcoin ETFs.
A futures bitcoin ETF doesn’t own Bitcoin, but uses Bitcoin futures contracts to deliver cryptocurrency exposure. Futures Bitcoin ETFs enable investors to speculate on the future price of Bitcoin. The first Bitcoin futures ETF, ProShares Bitcoin Strategy ETF, was approved on Oct. 19, 2021.
What Is a Spot ETF?
The spot price of an asset is the current price in the market. That’s the price agreed upon between both buyers and sellers. Stocks always trade at spot, or the intersection between the buyer's and seller's price. Spot prices are continually adjusting. Spot prices are also an input used when determining a futures contract price.
A spot Bitcoin ETF refers to partial ownership of an exchange-traded fund that owns Bitcoin. A spot Ethereum ETF owns Ethereum as its underlying holding. The spot Bitcoin ETF is open-ended and can issue or redeem shares based on demand. Investors can track the price of their spot ETF at any time and can buy or sell shares in the fund throughout the day through an investment brokerage account.
Are ETFs Safe?
In general, ETFs are considered low-risk investments because they are funds that track a basket of various market assets, which means broad diversification for your portfolio. ETFs can be less risky than individual stocks because they aren't impacted by the performance of one company like a single blue-chip stock is. If one stock in the ETF doesn’t perform well, it won't negatively impact the entire fund (provided it's a well-balanced fund).
However, investors should understand that ETFs aren't risk-free, and potential returns can be affected by things like market volatility and low liquidity. Also, not all ETFs are created equal. Index funds tend to be safe since they invest in the same securities as a given index and try to match the index's returns each year. Leveraged ETFs, on the other hand, also track indexes, but they use large amounts of debt to try to generate larger returns than the index themselves. Leverage is considered a double-edged sword because it maximizes potential gains—and potential losses.
Should You Buy Commission-Free ETFs?
Before making the decision to purchase ETFs, you should first determine your investing goals, your ideal asset allocation, and the types of ETFs you want to purchase. Then you can develop your investing budget to determine how much you have to invest, including the expenses associated with managing ETFs. Once all that groundwork is done, low-cost, commission-free ETFs become a very attractive tool because of their ability to deliver diversification through a single investment.
Commission-free means that whenever you buy or sell shares of an ETF, you don’t pay any trading fees. However, there are still other costs associated with commission-free ETFs such as theoperating expense ratio(OER). The OER is the percentage taken from the fund annually to pay for the fund’s expenses. For example, if you have $5,000 in an ETF with a 0.3% OER, your expense is $15 a year. A good rule of thumb is to look for ETFs with an OER that doesn’t exceed 1%. Commission-free ETFs are also a good idea if you trade frequently and you want to save money on overall investing costs.
Do ETFs Pay Dividends?
Some ETFs do pay shareholders distributions in the form of dividends. There are two types of dividends issued to ETF investors:
- Qualified dividends:These dividends are taxed at the capital gains rate, which depends on your modified adjusted gross income and taxable income rate (0%, 15%, or 20%). These dividends are paid on stocks the ETF held for at least 60 days during the 121-day period beginning 60 days before the ex-dividend date. To receive the dividend, you must own shares of the dividend-paying ETF for at least 60 days during the 121-day period that begins 60 days before the ex-dividend date. That means investors who actively trade ETFs generally don't receive any dividends.16
- Non-qualified dividends:These dividends are taxed at ordinary income tax rates because they are not designated as qualified. Dividends may benonqualifiedif the ETF held the dividend-paying stock for fewer than the required 60 days.
How We Picked the Best Online Brokers and Trading Platforms
Providing readers with unbiased, comprehensive reviews of online brokers and trading platforms is a top priority for Investopedia. We combined our industry research, subject matter expertise, and investor survey data to guide the research and weightings for our 2024 online broker awards. To collect the data, we sent a digital survey with 110 questions to each of the 26 companies we included in our rubric. Additionally, our team of researchers verified the survey responses and collected any missing data points through online research and conversations with each company directly. The data collection process spanned from Feb. 19 to March 19, 2024.
We then developed a proprietary model that scored each company to rate its performance across 11 major categories and 89 criteria to find the best online brokers and trading platforms. The score for each company’s overall star rating is a weighted average of the criteria in the following categories:
Additionally, during our 2024 research, many of the companies we reviewed gave us live demonstrations of their platforms and services via video conferencing methods and also granted our team of expert writers and editors access to live accounts so they could perform hands-on testing.
Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top online brokers and trading platforms.
Learn more about how we review online brokers.
