How to buy ETFs online in 2022

Exchange traded funds offer a simple, low-maintenance route onto the stock market for beginners and experienced investors alike. Use this guide to learn how to buy an ETF.
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Updated: Aug 23, 2022
Tip: our preferred broker is, eToro: visit & create account

ETFs are funds that trade like a stock. They’re cheap and their portfolios include a diverse range of the most popular companies and sectors in the world. This guide explains the pros and cons of buying an ETF and shows you the best places to purchase one.

Compare the best ETF trading platforms

You can get an ETF straight away by signing up with one of the brokers below. You can use our reviews to find out more about each platform in more detail, or simply head to their website through the links in the table. Alternatively, keep reading to learn more about how to buy your first ETF.

1
Min. Deposit
$ 10
Promotion
User Score
10
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA
Investoo Ltd is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc., as applicable. This compensation incentivizes Investoo Ltd to describe those products and services in favorable terms. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success.
2
Min. Deposit
$ 100
Promotion
User Score
10
Trade out-of-hours on over 70+ US stocks
Get exposure to a wide range of popular UK, US and international stocks
Enjoy flexible access to more than 17,000 global markets, with reliable execution
Start Trading
Payment Methods:
Bank Transfer, Credit Card, Debit Card, PayPal
Full Regulations:
ASIC, FCA, FINMA, is a licensed bank (IG Bank in Switzerland)
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
3
Min. Deposit
$ 0
Promotion
User Score
9.5
$0 commission and $0 Options contract fees
Upgraded research with advanced charts
Smart Menus for faster trades
Start Trading
Payment Methods:
Full Regulations:

How to buy ETFs online – a step-by-step guide

Step 1. Find a broker

You buy and sell ETFs like stocks, which means you need an online stock broker to execute your trades. Look for one that’s regulated, charges low trading fees, and which has a clean interface that makes it easy to find the assets you want to invest in. 

Read our reviews to find the best ETF platforms and compare them to choose your favourite. Or simply pick one of the options below, as these are two of the most popular brokers that are ideal for any beginner.

  • eToro: eToro is a leading online brokerage that lets you trade all sorts of assets, from stocks and cryptocurrencies to ETFs. You can start quickly and it’s a platform designed for beginners, with lots of material to help you on your way. Sign up for eToro >

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • Plus500: Plus500 is another popular online broker that offers CFD trading on a wide range of assets, including ETFs. It also offers more advanced features, such as leverage, for experienced traders. Join Plus500 today >

Step 2. Sign up and fund your account

Before you can make any trades you need to create an account. You will have to provide some personal information and contact details, like an email address and phone number, and attach a copy of your photo ID for verification. The process only takes a few minutes.

To deposit money into the account it’s best to use a bank transfer or card payment. If you want to use an alternative payment method, such as PayPal, then it might not be available with every platform. Use our detailed reviews to find out which brokers accept which payment method.

Step 3. Choose a fund

ETFs work by copying the performance of a market or an index. That means you can quite easily invest in companies from a particular country or industry when you choose an exchange-traded fund. If you think American stocks are going to perform well, then you could invest in an ETF that tracks the S&P 500.

If you’re more interested in a specific industry or segment of the market, then you can find ETFs for those too. Someone who was bullish about the prospects of the tech sector might want to buy a NASDAQ ETF. These are more risky, because all the stocks within them are affected by similar factors, but can grow in value quite quickly.

Step 4. Purchase your ETF

You gain access to an ETF by buying shares in it, so all you have to do is find the right fund, decide how many shares you want to buy, and execute the trade. Each ETF has its own ticker symbol that you can use to search for the one you want.

Step 5. Create a long term plan

Buying a single share in an ETF is only the first part of a successful strategy. The stock market has long been a great way to build wealth if you think about it in terms of years and decades rather than weeks and months. A strategy such as dollar-cost averaging, where you invest a small amount at regular intervals, is a relatively low-risk plan.

Should I invest in ETFs?

You should if you want a ‘set it and forget it’ investment. You can start with as much or as little as your budget allows and gain access to companies you might not otherwise be able to afford. They’re cheaper than using a managed fund and easy to buy through any online broker.

Where you should take a bit of extra time is in researching any fund you’re interested in. Each one has to publish which stocks it owns and it’s best to avoid any that are too reliant on a handful of companies. It’s also a good idea to compare the fees they charge, as their costs should be relatively low.

Still undecided?

To help you decide if ETFs are the best option, here is a summary of the pros and cons of buying one. Then there are a few more questions about timing your investment and whether ETFs are a good play for the future.

Pros

  • They’re simple to buy and sell through a broker
  • You only have to pay a small amount in fees every year
  • ETFs give you easy access to the most expensive, popular stocks
  • You can find ETFs that track the performance of any industry you like

Cons

Finally, here are three more questions to consider before you invest in ETFs.

1. Is now a good time to buy an ETF?

That depends on which ETF and on how the stock market is performing, that’s why there’s a detailed list of the best ETFs to buy in the current year. Because these funds track the performance of whole indices, they are affected by wider economic forces. You want to invest at a time when the market is doing well, and be more wary during recessions.

You can see how the market is doing through your own research, or by following the work of our team of financial analysts. Use the links below to get the lowdown on whether we’re in a bull or bear market, and they can help shape how you invest.

Wynn Resorts Limited (NASDAQ: WYNN) ended more than 10% up on Monday after Macau said tour groups from mainland China will be allowed to visit the gambling hub starting from November. Jefferies’ David Katz upgrades the Wynn stock Following the much-awaited stock market news, Jefferies upgraded this stock…
CrowdStrike Holdings Inc (NASDAQ: CRWD) is down more than 30% from its year-to-date high but CEO George Kurtz remains convinced the cybersecurity technology company can withstand the imminent recession.   How is CrowdStrike well-positioned for a recession? He’s confident since CrowdStrike helps customers consolidate spend that tends to be…
“Tech” is taking a big hit this year as the U.S. Federal Reserve continues to tighten its monetary stance. But it’s the “future” and so, it remains a great pick for the long-term investors, according to Barton Crockett. Crockett reveals his favourite FAANG stock A name within this space…

2. What problem do ETFs solve? What are their future prospects?

They solve the problem of you having to pick your own stocks. Instead, you can easily add the most popular companies to your portfolio without paying hundreds of pounds for each share. They’re perfect for beginners who don’t have the time or expertise to decide which stocks to own.

Their prospects depend on which stocks they own and how long you invest in them for. Over a long period of time, an ETF that simply tracks the performance of a major index, such as the S&P 500 or other FTSE 100 ETFs, is likely to do better than the majority of other investments.

An ETF that follows a specific sector might do better, but it might do much worse as well. If you choose one with a narrower focus then you should be more active in managing it. Stay in touch with the latest news, so that you can react if there are any new developments which affect that industry in particular.

3. Do you want to hold ETFs for the long term?

The best way to make money from ETFs is by taking a long term view. It is possible to trade them quickly, using features like leverage in order to profit from small price changes. However, the appeal of ETFs is that you can get started by simply signing up to a broker and they offer a low cost route to building your wealth over time.

Latest ETF news

Wynn Resorts Limited (NASDAQ: WYNN) ended more than 10% up on Monday after Macau said tour groups from mainland China will be allowed to visit the gambling hub starting from November. Jefferies’ David Katz upgrades the Wynn stock Following the much-awaited stock market news, Jefferies upgraded this stock…
CrowdStrike Holdings Inc (NASDAQ: CRWD) is down more than 30% from its year-to-date high but CEO George Kurtz remains convinced the cybersecurity technology company can withstand the imminent recession.   How is CrowdStrike well-positioned for a recession? He’s confident since CrowdStrike helps customers consolidate spend that tends to be…
“Tech” is taking a big hit this year as the U.S. Federal Reserve continues to tighten its monetary stance. But it’s the “future” and so, it remains a great pick for the long-term investors, according to Barton Crockett. Crockett reveals his favourite FAANG stock A name within this space…

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Sources & references
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Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.