Best Online Brokerages for ETF & Unit Trust Trading 2023
Finding an online broker can be difficult. Our investing team makes process transparent and simple by analysing all of the options available in Singapore. In this article, our investing team identified the best brokers for ETF trading by comparing trading fees and market access.
- Best Online Broker for ETFs: Saxo Markets
- Best for International ETFs & Unit Trusts: Interactive Brokers
- Cheapest for US ETFs for large amounts: TD Ameritrade
- Allows Fractional Trading For US ETFs: Syfe Trade
- How to Choose
Table of Contents
Saxo Markets: Best Online Broker for ETFs
Here is why Saxo Markets is the best online broker in Singapore for ETFs.
According to our research and analysis, Saxo Markets is not only the top broker for general online trading, but also the best for trading ETFs at a low cost.
The platform has low fees, a user-friendly platform and access to more than 3,000 ETFs. Saxo charges less than half in commission fees compared to most of its competitors at just 0.15% commission on trades, with a minimum cost of S$25 for Singapore ETFs (USD 7 for US). The industry-leading broker has even lower commission fees for high volume traders. For example, investors with at least S$300,000 in their accounts receive preferred pricing.
|* Saxo min. SG: S$5; US:$3-$4; JPY1,000-1,500; HKD60-90; EUR6-12|
Interactive Brokers: Best for International ETFs & Unit Trusts
Here is why Interactive Brokers is the best online broker in Singapore for International ETFs & Unit Trusts.
Interactive Brokers is a great broker for Singaporeans seeking to invest in Singapore or abroad. The brokerage platform charges some of the lowest commission fees for regions outside of Singapore. Additionally, Interactive Brokers has a monthly fee of S$10 minimum (for investment accounts of S$2,000-S$100,000). While minimal, this fee can impact the total cost of trading ETFs for those trading only a few thousand dollars in total.
Interactive Brokers ETF Trading Fees
|U.S. Commission Fee (Min. Fee)||$0.0035 ($0.35)|
|Hong Kong Commission Fee (Min. Fee)||0.08% (HKD 12)|
|Japan Commission Fee (Min. Fee)||0.05% (JPY 80)0.10|
TD Ameritrade (thinkorswim): Cheapest for US ETFs
Here is why TD Ameritrade is the cheapest online broker in Singapore for International US ETFs.
TD Ameritrade is a good choice for investors seeking to trade a large volume of U.S. ETFs. It does charge higher commission fees compared to Saxo for smaller trades but becomes a cheaper option for more substantial trades.
For example, TD Ameritrade's flat fee of $10.65 is the cheapest option for investing in ETFs with total investments greater than S$25,000 at a time. However, Saxo is a cheaper option for those seeking to trade a variety of securities (e.g. futures, options, bonds and FX), especially those seeking to trade in smaller amounts or increased frequency.
Syfe Trade: Allows Fractional Trading For US ETFs
Here is why Syfe Trade is the best online trading platform in Singapore for trading fractional shares for US ETFs.
Syfe Trade is a good choice for investors who are not seeking to trade a large volume of US ETFs. The latest online brokerage in Singapore offers five commission-free trades for US ETFs every month and a flat fee of USD 0.99 per trade thereafter during its introductory period.
Investors will be happy with Syfe Trade’s simple and intuitive interface and the SIPC protection for up to 500K against brokerage failure.
Even after the first quarter of 2022 when the introductory offer has expired, Syfe Trade continues to remain extremely competitive by offering two commission-free trades for US stocks and ETFs every month and a flat fee of USD 1.49 per trade thereafter.
|Commission Rate||Minimum Commission|
|Syfe Trade||USD0.99 flat fee||-|
|Saxo Markets (Bronze Plan)||0.06%||USD 4|
|Tiger Broker||0.01 per share||USD 1.99|
|moomoo||0.0099 per share||USD 1.99|
|*moomoo & Tiger Brokers rate consists of commission and platform fees|
Syfe Trade also allows investors to engage in fractional trading for US stocks and ETFs, allowing retail investors with smaller capitals to get the US stock or ETF of their choice from just USD 1.
Similar to other online brokerage offerings in Singapore, Syfe Trade gives its users live US market data as well to maximise their investment gains.
Read more about Syfe Trade here.
How to Choose The Best Broker for ETF & Unit Trust Trading
When comparing the top online brokerages for investing in ETFs, there are a few key factors to consider. First, it is necessary to compare fee structures. Some brokers will charge a flat fee (e.g. S$10) per trade, while others charge based on the size of the trade (e.g. 0.10%). Additionally, it is worth investigating each platform's ease of use. Our research team has found that some online brokerages, such as Saxo, offer smooth user experiences, while others are quite clunky. Finally, traders that want advanced features, such as live-data API connection and the ability to conduct margin trading will have to further compare platforms.
Frequently Asked Questions
An exchange-traded fund, or ETF, is a type of investment fund made up of a group of securities (like stocks and bonds) that are traded on the stock exchange. ETFs include a variety of securities across several industries, making it a good product for low-risk investors who aren't experienced enough to pick stocks individually but would like to invest in a particular industry like tech. Moreover, many ETFs are managed by ETF fund managers, so passive investors can benefit by allowing their broker or fund manager to make the investing decisions.
For those who prefer to invest over a longer period of time, ETFs are a good option, since factors such as luck and market cyclicality cancel each other out. This alleviates the volatility that typically occurs with short-term investing. That being said, you can simultaneously trade ETFs and other products depending on which brokerage you are working with.
One way to choose ETFs to invest in is by comparing the options offered by your current brokerage. You should consider factors such as the total expense ratio (TER), diversity of the portfolio, prospective returns, bid-offer spreads, taxes and how long you wish to invest in the ETF.
If you decide not to trade an ETF from your current brokerage, there are firms dedicated to supplying ETF trading services. However, if you're looking to trade ETFs and not pay high brokerage fees, check out our recommended online trading platforms to find the best one for you.
ETFs and mutual funds differ slightly. While both allow you to invest in a group of companies, one might be more suitable for you depending on your needs.
For example, mutual funds are traditionally long-term investing funds that people use to accumulate wealth over decades. Because of this, they usually require a higher initial investor fee (around S$1,000 or more). Since you can invest in an ETFs for either a short period of time or a longer period of time, ETFs do not charge as high of an initial amount to open the account.
Moreover, ETFs differ from mutual funds since ETFs are traded throughout the day. Mutual funds, on the other hand, are traded at the end of the day. This means that no matter what time you trade a stock, you will have to pay the end-of-day market price if you trade with a mutual fund.
For those looking to open a trading account on behalf of someone else, a mutual fund might be a better choice. This is because mutual funds are more actively managed by fund managers, allowing you to not worry about day-to-day market prices. If, on the other hand, you prefer to be more active or want to invest for a shorter time frame, ETFs could be ideal for you.
Unit trusts are a type of mutual fund that passes profits directly to the investor rather than reinvesting it back into the fund. They are different from ETFs in that by investing in a unit trust, you are buying a part of the deed to the companies you are investing in. Effectively, you are becoming a beneficiary of the trust.
Unit trusts, unlike ETFs, typically have lower fees since fund managers do not actively trade unit trusts. Instead, securities are bought and sold only when there is a change in one of the company's profiles (i.e., merger or bankruptcy). On the other hand, unit trusts are similar to ETFs in that both invest in a variety of sectors and carry lower risks than if you were to invest completely in individual stocks. Furthermore, both unit trusts and ETFs are managed for you, meaning you can be a "passive" investor.
Thus, while both are similar in the investor's role, the major difference is the structure of the investment. Unit trusts are therefore better for people who are happy to invest with a set group of companies with little change. To understand more, read our article on the differences between unit trusts and ETFs.
Yes. ETFs are indexed, meaning they are lower-risk than other types of investments. Moreover, many ETFs offer diversified portfolios, so if one company that you invested in faces financial hardship, your entire portfolio will not falter as a result.
That being said, leveraged ETFs, which contain options and futures, are traditionally riskier than standard ETFs. It is advisable to read the fund's prospectus to determine whether or not you feel comfortable investing with their products. If you are not sure where to start, look at our guide to investing for beginners.
|Online Brokers in ValueChampion's Study|
|Interactive Brokers||iOCBC||KGI Fraser|
|LCG||Lim & Tan||Maybank Kim Eng|
|Oanda||Plus 500||POEMS 2.0|
|RHB Securities||Saxo Markets||Standard Chartered|
|TD Ameritrade||Thebinaryoptionsexpert||U Trade|