Exchange-traded funds (ETFs)

Choose from over 200 exchange-traded funds to invest in commission-free.

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What is an ETF?

ETFs or exchange-traded funds are a type of security that typically tracks the performance of an underlying index or a basket of stocks. They are passively managed funds that offer you a way to invest in a wide range of stocks in one package, and as the name suggests, they list on stock exchanges with shares that you can buy or sell throughout the day.

Why invest in ETFs?

Diversification

ETFs are not only a great way to gain exposure to major stock market indices, like the S&P 500 or FTSE All-Share, but also enable you to access more niche markets or specific sectors.

Simplicity

When buying ETFs, you invest in a basket of stocks that will mirror how a specific index performs without buying all the stocks individually.

Tax-efficient

Exchange-traded funds are exempt from the 0.50% stamp duty. Hold your ETFs as part of an ISA or SIPP tax wrapper, and you can access additional tax benefits.

 Low costs

ETFs are generally less expensive than actively managed funds as there are less management fees involved. They also tend to be less costly than purchasing individual shares - fewer transactions, less trading costs.

As a downside, an ETF is unlikely to outperform its benchmark index. As it happens with other investments, your portfolio’s value can go down as well as up. ETFs’ price movements are influenced by market fluctuation and the risks of their underlying investments, so if the value of the assets the ETF is tracking is going down, you might get back less than you initially invested.

How to buy and sell ETFs

Access hundreds of ETFs to invest in via the Freetrade app.

Access all Vanguard, iShares and Invesco ETFs, free of charge with our commission-free share dealing account.

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Stocks and Shares ISA

Invest in ETFs as part of an ISA tax-wrapper, and your investments will be exempt from UK capital gains or income tax.

£3/mo
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Freetrade Plus

Make your money work harder with a 3% interest on cash, free of charge ISA account and a larger stock universe.

£9.99/mo
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Freetrade SIPP

Take control of your retirement future. Invest in ETFs as part of a SIPP pension and get 25% HMRC tax relief each year.

£9.99/mo
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When you invest, your capital is at risk

Why invest with Freetrade

Commission-free investing

Over 300,000 users

Over 4,000 stocks and shares to invest in

Types of ETFs to invest in

Equity ETFs - Index tracking ETFs are the most popular ETFs and provide exposure to the broader market, such as the S&P 500.
Bond ETFs - Investing in bond ETFs is a great way to diversify your portfolio with a lower investment risk while gaining a steady return.
Commodity ETFs - Exchange-traded commodities (ETCs) give exposure to commodity markets and track things like gold or crude oil.
Dividend ETFs - These exchange-traded funds are focused on dividend-paying stocks and can provide a constant income.
Sector ETFs - Industry-focused ETFs can give you exposure to specific industries you are interested in, from major industries to more niche sectors like pharma.
International ETFs - Get exposure to different geographic areas and seize opportunities in developed and emerging countries.
Market-cap index ETFs - These are passive funds that select stocks based on a company’s market cap or value of its shares.
Sustainable ETFs - ESG investing is growing in popularity, and sustainable ETFs can help you diversify your investments in line with your ethical beliefs.

Frequently asked questions

What is a stocks and shares ISA?

An ISA, or Individual Savings Account, is a tax-efficient saving or investment account that allows you to put money into a wide range of investments, from individual stocks and shares to funds, bonds and ETFs. This type of account is also known as a ‘tax wrapper’ and essentially allows you to be exempt from paying income, capital gains and dividend tax when you place up to £20,000 into your ISA account.

How many stocks and shares ISAs can I have?

You can pay into one stocks and shares ISA account in each tax year, so if you opened one already, you wouldn’t be able to open one until the new tax year starts. You can, however, transfer your existing stocks and shares ISA over from a different provider.

What is my 2020/21 ISA allowance?

The 2020/21 ISA tax year allowance is £20,000. This is the maximum amount you can put into your stocks and shares ISA for the current tax year. Your unused allowance won’t be carried over to the following tax year, so make sure you make the most of it. 

How do I transfer my stocks and shares ISA to Freetrade?

To transfer your stocks and shares ISA from another provider to Freetrade, you just need to complete a form, and we will do the rest for you. The transfer process might take four to six weeks, but we will let you know when it’s all completed.

Who is eligible for a stocks and shares ISA?

You’ll need to be 18 years of age or over and a UK resident. If you’ve already opened a stocks and shares ISA in the current tax year, you won’t be eligible for a new account. You can’t open a stocks and shares ISA for someone else.

What is the deadline for opening an ISA in the tax year 2020/21?

The 2020/21 ISA tax year allowance is £20,000. This is the maximum amount you can put into your stocks and shares ISA for the current tax year. Your unused allowance won’t be carried over to the following tax year, so make sure you make the most of it. 

What is the minimum amount I need to open an ISA?

You don’t need thousands of pounds to open an ISA account. If you want to open a stocks and shares ISA with Freetrade, you can start from £2.

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