ETFs have gained in popularity over the past few years. And there is plenty of money to be made in investing in them. So in this post I’m going to give you some good options for investing and making money in ETFs no matter where you live in the world.
ETFs are basically a mutual fund that is traded just like a stock on an exchange. This means you can buy and sell ETFs as easily as you can buy and sell any stock.
All ETFs are different and put together with an underlying investment goal. Some are put together to track the indexes. Others are designed to go up if the price of the market goes down. Some are made up of commodities etc. It’s important you don’t just go and invest in any ETF with the expectation it will rise in value in the long term. This won’t happen.
Investing in ETFs on eToro
eToro, a popular broker offers ETF cfds. CFDs offer a number of advantages for traders and hence why I think eToro makes a good option of ETF trading. Here’s why:
- You can open long or short positions. Meaning you can profit from the market no matter what way it is moving.
- You can trade with leverage. Leverage can be a powerful tool if used correctly.
- You can trade all over the world. ETFs are traded on exchanges all over the world, and you might not have access to that exchange from your local broker. eToro opens up these markets to traders all over the world.
- Instant execution. No need to wait 3 days for settlement. You can open and close trades instantly.
- Relatively low fees. eToro only charges a spread on trades and no commission. This can make trading much cheaper if trading with smaller amounts of capital.
eToro offers quite a large selection of ETFs. If you’re looking for a longer term strategy check out this post I put together.
If you’re looking for a similar CFD platform to eToro that offers ETFs then I would recommend taking a look at Plus500. Although I find the interface to be a bit confusing, they do offer a similar product.
Copy Trading ETFs
One big advantage of eToro is the social trading features. It allows you to see and copy the trades of more popular traders. So it is possible to copy trade ETFs. Simply use the filter tools on eToro to find traders who mainly trade ETFs. Check out my review on eToro for tips and tricks on copying the best people.
Tradings ETFs with your broker
If you’re looking to trade ETFs with a broker, then I would recommend going with Robinhood. Why? because you won’t be charged any fees. If you’re starting with smaller amounts of capital this will make a huge difference to your profitability. Unfortunately Robinhood is only available in the U.S. Traditional brokers will charge around $10-$20 per trade. This means I would only trade if you have around $1k+ to trade with. Otherwise the fees will eat into your profits.
Investing in ETFs with as little as $5
If you’re looking for a low cost way to get into ETFs then try Acorns. Acorns is a savings and investment app that transfers small amounts from your bank into an investment account. This money is invested into a broad range of ETFs. The portfolio has been put together by experts so you don’t have to worry about picking the right ETF to invest in.
While you’re never going to make a million dollars from Acorns, it’s a great way to automate your savings and still get exposure to ETFs. You can find out more about Acorns and how it works here.
One alternative to ETFs is a product offered by eToro called CopyPortfolios. A Copy Portfolio is made up of assets based around an investment theme. Such as Video Gaming, CRISPR, Big Tech etc. While Copy Portfolios aren’t as complex as most ETFs, they do offer good exposure to a broad range of assets.
So there you go. A few different ways to invest in ETFs, even if you only have $5. Do you invest in ETFs? Let me know in the comments how you invest and how you’ve found them.