Best Brokers to Invest in ETFs from Canada
Exchange-Traded Funds (ETFs) are a type of investment fund listed and traded on a stock exchange. They typically track the performance of an index. Find out which are the best apps to invest in ETFs in Canada.
Top 3 List of Brokers for Investors in Canada
XTB is one of the world's largest stock exchange-listed FX & CFD brokers, providing retail traders instant access to hundreds of global markets.
XTB offers a wide range of CFDs on ETFs (around 200) from Fund Managers like iShares, Vanguard, ARK, VanEck, SPDR, and ProShares.
Avatrade offers you a wide selection of the Most Traded ETFs in the market. In addition, the company is regulated in multiple jurisdictions worldwide, which makes it a reliable, trustworthy, and transparent brokerage services provider. They allow you to optimize your investment strategy with excellent trading conditions such as low spreads, transparent pricing of assets, and fast execution on all entry and exit orders.
AvaTrade offers ETFs from Fund Managers like SPDR, VanEck, iShares, among others.
Admirals is a leading online trading service provider, offering investment services for trading with Forex and CFDs on indices, metals, energies, stocks, bonds and digital currencies. Admirals allow trading the most liquid ETFs at low commission rates.
ETF Distinguishing Features
ETFs track the performance of a wide variety of fixed income and equity indices and a range of sector and theme-specific indices.
Some ETFs are more liquid (or easily tradeable) than others, depending on their tracking index. For example, ETFs that track the S&P500 index tend to be more liquid than an ETF that tracks the performance of space exploration related stocks.
The details of the ETF's holdings are transparent, so calculating its underlying value is easy.
ETFs have continuous real-time pricing so that investors can trade at any time.
They have low expense ratios, and no initial or exit costs are applied. Instead, the investor pays average dealing commissions to his stockbroker.
Retail (and institutional) investors can use ETFs for a wide range of investment strategies, including constructing core-satellite portfolios, asset allocation and hedging.
Top Traded ETFs
SPDR S&P 500 ETF (Known as 'SPY'): Holds a portfolio of the US stocks included in the S&P 500 Index.
VanEck Vectors Gold Mining ETF (GDX): Holds stocks of companies involved in the gold mining industry by tracking the NYSE Arca Gold Miners Index
Invesco QQQ (QQQ): This ETF invests based on the Nasdaq-100 Index, including 100 of the largest US and international Tech companies listed on the Nasdaq Stock Market.
Ark Innovation ETF (ARKK): ARKK is an actively managed ETF seeking long-term growth by investing in global stocks of companies involved in disruptive innovation.
Vanguard Total International Bond ETF (BNDX): The ETF seeks to track the performance of an index that includes international government, agency, and corporate bonds, mostly from developed countries and some emerging markets countries.
Now let's move to our criteria to select the top 3 brokers to trade ETFs.
Our Criteria to Pick the Top 3 Brokers for ETF Trading
To be included on our top 3 list, the brokers have to excel in several of these matters:
The Broker has to have a good ETF selection in terms of quantity and variety (asset class, geographies, and theme variety).
The commissions, both the fee levied to open and close a trade, and the spread (the difference between buying and selling) that the Broker charges should be low compared to their competitors.
Tied to the previous one, ideally, the Broker should not charge a maintenance cost, or it should be low if set. Some Brokers charge you for keeping an open trade. Since ETFs are instruments designed to be held from mid to long term, the Broker fee to keep that trade open must be as low as possible.
The trading platform should be user friendly, allowing investors to read news about the ETF and provide key information about the asset.
Last but not least, the Broker should be available to local traders. Every Broker has restrictions in terms of geographies. Our top list only includes Brokers that open trading accounts in Canada.