Buying ETFs with brokers
If you ask where to buy ETFs, you may have made up your mind and start investing, and that's awesome. However, that doesn't stop there. There are things you should consider when you are choosing the ETF that suits your needs.
Thus, before we dig into where you can buy an ETF, let's take a look first at the things you should consider before doing so.
Let's get started!
Things to consider in choosing and buying ETF
Before choosing and buying ETFs, you should take some time to understand and consider the following factors. It will help you narrow down your options to find the best broker that suits your preference.
Administrative expenses
Administrative expenses are what we call expense ratios. Basically, the lower the costs, the better. The reason is that these expenses cut into your profit.
For passively managed funds, the asset-weighted average expense ratio was 0.15%. Thus, you may use this as a point to consider. Some popular ETFs have much lower expenses than that, so dig deeper and go for something below.
Commissions
Of course, commissions also cut down the profit since it applies to every transaction. The lower the commissions, the higher the possible profit you can gain.
The good thing is that commissions are virtually non-existent in major online brokers these days. Still, it's a good reason to check this one first.
Volume
The volume shows how many shares have traded hands over a certain period. The higher volumes mean, the more popular a particular fund is.
Holdings
In choosing an ETF, you should also look for the top holdings in the fund. It simply means the individual companies where the fund gets invested.
Performance
Although past performance may not indicate possible future returns, it's still handy to compare similar funds' performance.
Trading Prices
ETFs work like stocks. Thus, you'll be able to see current prices. It will also give you an idea of how many shares you can purchase.
By looking at these six factors, you can narrow down your choices in an effective manner.
Now, let's get into seeking out the best options that are ideal for you to invest your assets.
Best online brokers where you can buy ETF
Finding the perfect broker depends mostly on preference. Thus, a particular broker may be ideal for one but may not be the same for another.
The list below gives you an option divided for those who want to be a hands-on or a hands-off investor.
Here's a rundown of online brokers where you can start your ETF investment endeavor.
If you're a hands-on investor, your best options would be the following:
You should consider the online brokers above if you're someone who likes to do things independently.
Thus, if you want to pick your ETFs and build a portfolio from scratch, your best bet would be going for an online broker.
However, if you're a hands-off investor, your ideal options would be the following:
- Wealthfront
- SoFi Automated Investing
- Ellevest
If you're someone who's starting and needs some assistance in building an ETF portfolio, it would be best to have a Robo-advisor for you.
If you have no idea what it is, Robo-advisors are digital platforms providing automated, algorithm-driven financial planning services with little to no human supervision.
It should give you a lot of offers such as:
- Easy account setup
- Robust goal planning
- Account services
- Portfolio management
- Security features
- Attentive Customer Service
- Comprehensive Education
- Low fees
Thus, if you find yourself in dire need of assistance, you can opt for the Robo-advisors to do the work for you.
Final Thoughts
Choosing the right broker is a significant factor in one's investment. Of course, all investments carry risk, and ETFs are no exception. However, with ETFs structure, the risk involved is drastically lower than other investments.
Further, although a significant percentage of investment lies in the market's condition, it still makes a whole lot of difference when you go for a broker that suits your preference.
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