Best ETFs 2021

Whether you're looking for buy-and-hold, dividend or growth ETFs, we've covered the best ETFs to invest in.

An exchange-traded fund lets you invest in a whole range of different investments in one fell swoop – but how do you tell between them? It’s impossible to look at every investment in every ETF to find one that suits you, but equally, there’s a lot of choice on the market and a lot of differentiation between ETFs, so it’s not exactly an eeny meeny miny moe situation. There are several different types of investment style, including ETFs that offer exposure to global markets, ETFs for dividends, and ETFs in specific categories, like ethical ETFs or technology ETFs.

To help you decide, here are some of the most traded ETFs on platforms today, as well as some of the most talked about on Reddit and Twitter.

Promoted
Interactive Investor ETF

Invest in ETFs with interactive investor

  • Low, flat fee of £9.99 per month
  • Get one free trade per month
  • Choose from over 1,000 ETFs

Top ETFs being bought on trading platforms today

To generate this list, we’ve aggregated trending ETF information from four of the UK’s leading investment platforms.

Top ETFs trending on Reddit and Twitter today

What makes a “good” ETF?

ETFs aren’t like active funds, where a “good” fund is judged by whether it achieves returns in excess of their benchmarks. Generally, the best ETFs achieve low-cost, efficient access to specific markets. They need to be cheap, liquid and be widely available. The market is always diversifying and new opportunities come to market all the time. Here are today’s trending ETFs and the best ETFs for different types of investor.

How to pick the best ETFs?

Picking the best ETFs is really just finding the one that suits your investing style best. You’ll also want to look at the goals of the ETF and performance. Our lists above can help you narrow down your search for ETFs — here are some of the next steps you could take.

  1. First, work out what your investment style is. Do you want growth, dividends, or stocks in specific industries? This will help you narrow down your search.
  2. Decide if you’re looking for sustainable or ethical ETFs? If so, you could search “ESG”, “ethical” or “sustainable” in your ETF screener to find them.
  3. Look at the goals of ETFs. You can find ETF goals in the Key Investor Information Document. We’ve explained some of the information you’ll find on it below.
  4. Look at performance. Past performance isn’t an indicator of future results, but it’s always a good idea to check if the ETF is reaching its goals. This is something your chosen trading platform should have, but can also be found on the Key Investor Information Document.
    1. The Key Investor Information Document

      This is a document of the key information about an investment, summarised into a few different sections. These are designed to be quick reads – at no more than 2 or 3 pages each, depending on the investment type, so they’re hardly competing with Harry Potter for page count.

      The Key Investor Information Document is split into a few different parts:

      • Objectives and investment policy. This section tells you some information about how the ETF is managed, whether it is designed to track the performance of an index, the base currency, whether you’d expect to receive an income from dividends or if they’re reinvested.
      • Risk and reward profile. This section shows you how risky the ETF is. Higher risk has the potential for higher returns. You can also see any other risks involved in the ETF.
      • Charges. This shows any charges associated with the fund, including the ongoing charge, which is the fee that’s paid to the fund manager.
      • Past performance. Exactly as you’d expect, this is the performance of the ETF. If it’s tracking an underlying index, you may see the performance against the index.

      Are ETFs better than investing in individual shares?

      In some ways, yes. ETFs are a much quicker and cost efficient way to invest in lots of different shares without the faff or costs of making every individual transaction.

      The main downsides of ETFs against buying individual shares is that you don’t get a say in the individual shares that it includes. Of course, you can choose one that suits you closest, but it won’t necessarily match what you might’ve done if you did it yourself.

      Global ETFs

      If you’re just looking for an ETF which is broadly exposed to the whole world, which you might want to do for simplicity’s sake, then these are some of the ones you could take a look at. Of course, these don’t invest in every single share…

      Invesco MSCI World UCITS ETF

      This ETF replicates the performance of the MSCI World Index, which has exposure to more than 1,600 stocks across 23 countries. It is over £2 billion in size (in the UK) and has a total expense ratio of 0.19%. It was launched in 2009.

      The MSCI World Index reflects the performance of global stock markets in recent years, which means that it has a high weighting in technology, with its largest holdings in Apple, Microsoft, Amazon, Facebook and Alphabet. This doesn’t make it “just like any other technology ETF, as these holdings aren’t as concentrated as they would be on something like an S&P 500 ETF. As such, it is a good way to gain diversified exposure to global stock markets at low cost.

      iShares MSCI Europe SRI UCITS ETF

      If you’re interested in socially responsible investing, then this fund from iShares follows the MSCI Europe SRI Select Reduced Fossil Fuels index, tracking companies from across Europe. Only companies with high environmental, social and governance (ESG) ratings relative to their sector peers make it through the screening process.

      The ETF avoids companies that mine or produce fossil fuels through extraction and production activities. The weight of each company is capped at 5%. It has a total expense ratio of 0.2%. The fund’s top holdings include Roche, Siemens and Unilever.

      Vanguard FTSE All-World UCITS ETF

      This ETF tracks the FTSE All World Index, which has around 3,900 holdings in nearly 50 countries. The holdings include emerging markets and covers more than 95% of the global investable market capitalisation. The fund is well-established, having run since 2012 and is now $5.3 billion (around £4.02 billion) in size.

      The ETFs ongoing charge is approximately 0.20%. Vanguard employs partial physical replication to match the performance of the index, which means that it partially replicates the holdings on the underlying index. Its largest holding is Apple, but it also includes Chinese technology giants Alibaba and Tencent.

      Dividend ETFs

      Dividend ETFs are ones which invest in companies that pay dividends. Dividend investing has become popular in the US and the UK, with investors keen to generate an income from their portfolios. If that sounds like you, then check out the following ETFs.

      WisdomTree Global Quality Dividend Growth UCITS ETF

      This WisdomTree ETF tracks the WisdomTree Global Developed Quality Dividend Growth Index. It’s $45 million (£34 million) in size and has a total expense ratio of 0.38%. Unlike many dividend strategies, it retains a weighting to relatively low-yielding, but high growth companies such as Apple and Microsoft. This gives it a dividend yield of around 2.4% and good capital growth.

      Fidelity Global Quality Income UCITS ETF

      The Fidelity Global Quality Income UCITS ETF follows a similar approach to the WisdomTree fund, focusing on companies that can grow their dividends rather than those that are paying a high dividend today. Its income yield is a little higher, at 2.54% and its total expense ratio is similar at 0.4%.

      The fund tracks the Fidelity Global Quality Income Index and is almost two-thirds weighted to the US. Information technology is the largest weighting, at around 20%.

      Xtrackers MSCI World High Dividend Yield UCITS ETF

      The Xtrackers MSCI World High Dividend Yield UCITS ETF has been one of the best in a tough environment. It is a small fund, just £31 million in size and has an annual management fee of 0.19%.

      This ETF has a sustainable income screen, which means it avoids any companies where dividends look too high and are likely to be cut. It doesn’t have the same weighting in technology names as the other two dividend ETFs, with its top holdings including Proctor & Gamble, Verizon Communications, Roche and Merck. It still has more than half of its holdings in the US, but healthcare, consumer staples and financials each form a significant chunk of the portfolio.

      Buy and hold ETFs

      Buy and hold ETFs are precisely what they sound like: you buy them to hold for a significant period of time, with the hope that you’ll see some good growth. Here are some ETFs to consider.

      iShares NASDAQ 100 UCITS ETF

      It’s thought that any portfolio that hopes to capture future trends needs to have a decent weighting in technology. The right time to buy technology is always 10 years ago and the asset class is likely to be volatile. That said, a diversified holding in blue-chip technology companies will hopefully offer some good growth.

      The NASDAQ stock exchange is a proxy for the technology sector. The iShares NASDAQ 100 UCITS ETF aims to replicate the performance of its 100 largest stocks, with a total expense ratio of 0.33%. Its largest holdings are the familiar FAANG names – Meta (Facebook), Amazon, Apple, Microsoft and Alphabet (owner of Google). The fund is $5.9 billion (around £4.47 billion) in size.

      Vanguard FTSE Emerging Markets UCITS ETF

      The Vanguard ETF tracks the FTSE Emerging Markets Index, which comprises 1,722 companies, and has an ongoing fee of around 0.20%. Around half the fund is in China, which has seen stronger growth than any other emerging market in recent years. It is also heavily weighted to a number of Chinese technology names – Alibaba and TenCent are its two largest holdings. That said, no company makes up more than 8% of the index, so it provides access to a broad range of countries and sectors.

      iShares Ageing Population UCITS ETF

      This ETF tracks the performance of the STOXX Global Ageing Population Index, which invests in developed and emerging market companies generating significant revenues from the growing needs of the world’s ageing population — talk about silver linings. The pandemic has served to highlight the political and healthcare difficulties created by ageing populations and this looks set to be a theme for the long term.

      Around half of the fund is invested in the US, with a high weighting in pharmaceutical companies, including Novocure, Mirati Therapeutics and Varian Medical Systems. However, it is broader-based than a healthcare-only fund. It has an ongoing fee of 0.4% and is currently $280 million (£211 million) in size.

      Growth ETFs

      If you’re targeting growth above all else, these ETFs are a good place to start your search.

      Invesco KBW Nasdaq Fintech UCITS ETF

      The challenge with any technology investment is to find it before it takes off. Many sector-specific technology ETFs are in exciting, high growth areas like cloud computing and artificial intelligence – but they have already seen significant share price growth and, in some cases, look expensive. Fintech appears to have a bright future ahead — the sector is ripe for disruption and greater efficiency – but has not yet seen the share price growth of some other key sectors.

      The Invesco KBW Nasdaq Fintech UCITS ETF has an ongoing fee of 0.59% and is invested predominantly in US-based financial technology companies. Its largest holdings are groups such as payment systems provider Block (formerly Square) and data provider CoreLogic.

      Lyxor MSCI Disruptive Technology ESG Filtered UCITS ETF

      “Disruptive” is a catch-all term for any technology with the ability to profoundly change the sector in which it operates. This means the ETF is more diversified than many of its technology peers. It aims to track the MSCI ACWI IMI Disruptive technology ESG Filtered Index, which in turn tracks those companies expected to derive significant revenue from areas such as 3D printing, the “Internet of Things”, cloud computing, Fintech, digital payments, healthcare, robotics, clean energy and smart grids, and cybersecurity.

      The wider fund is now almost £8 billion in size, with an annual management fee of 0.15%. It is well-diversified, with the largest holding representing just 1.5% of the fund. Its top holdings include solar panel company Sunrun, biotechnology groupArena Pharmaceuticals and hydrogen fuel cell group Plug Power.

      Invesco Global Water ETF

      Clean water may yet prove the most precious commodity of the future. Some pension funds are already asking companies to report on their water strategies, viewing it as a key long-term business risk. Water assets can be a good source of diversification for a portfolio, but also a long-term capital growth story.

      The Invesco Global Water ETF is now $24.7 billion (£18.68 billion) in size. It tracks the NASDAQ OMX Global Water Index, which follows those companies creating products designed to conserve and purify water for businesses, homes and industries. Its largest three holdings are Danaher, Geberit and Ecolab.

      Bottom Line

      As with all investments, the best for one person might not be the best for everyone. Take a look at our guide to choosing the best ETF above to help you find one that suits your investment style.

      There are plenty of options available to choose between — most investment platforms have a stock screener that helps you narrow down your search, typically by performance, keyword and charges.

      Best ETFs: a summary

      Global ETFs

  • Invesco MSCI World UCITS ETF
  • iShares MSCI Europe SRI UCITS ETF
  • Vanguard FTSE All-World UCITS ETF

Dividend ETFs

  • WisdomTree Global Quality Dividend Growth UCITS ETF
  • Fidelity Global Quality Income UCITS ETF
  • Xtrackers MSCI World High Dividend Yield UCITS ETF

Buy and hold ETFs

  • iShares NASDAQ 100 UCITS ETF
  • Vanguard FTSE Emerging Markets UCITS ETF
  • iShares Ageing Population UCITS ETF

Growth ETFs

  • Invesco KBW Nasdaq Fintech UCITS ETF
  • Lyxor MSCI Disruptive Technology ESG Filtered UCITS ETF
  • Invesco Global Water ETF

Compare ETF investing platforms

Table: sorted by promoted deals first
Name Product Ratings Finder rating Customer rating Min. initial deposit Price per trade Frequent trader rate Platform fee Offer Link
FREE TRADES
eToro Free Stocks
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
$10
£0
N/A
£0

Capital at risk

Platform details
IG Share Dealing
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£250
UK: £8
US: £10
EU: 0.1% (min €10)
UK: £3
US: £0
EU: 0.1% (min €10)
£0

Capital at risk

Platform details
FREE TRADES
Stake
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£50
US: £0
N/A
£0
Join and receive a free share worth up to £100

Capital at risk

Platform details
Degiro Share Dealing
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£0.01
UK: £1.75 + 0.014% (max £5)
US: €0
N/A
£0

Capital at risk

Platform details
Hargreaves Lansdown Fund and Share Account
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£1
£11.95
£5.95
£0

Capital at risk

Platform details
interactive investor Trading Account
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£0
£7.99 (with one free trade per month)
£0
£9.99 per month

Capital at risk

Platform details
loading

Compare up to 4 providers

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

More guides on Finder

  • Invest in pharmaceutical stocks

    Pharma stocks can be rewarding, but there are risks involved that could impact your profits. Find out the best way to invest in pharma stock.

  • Invest in defensive stocks

    Defensive stocks can be rewarding, but there are risks involved that could impact your profits. Find out how to invest in defensive companies.

  • Best shares to buy now

    View our list of the top 10 trending stocks today, and read our guide to choosing the best stocks.

  • Best shares to buy now

    View our list of the top 10 trending stocks today, and read our guide to choosing the best stocks.

  • Orca review

    Orca lets you invest in 250 stocks and exchange traded funds on the London Stock Exchange. Find out some pros and cons and its fees.

  • Natural gas ETFs

    Natural gas has been hugely successful in recent years. Find out more about natural gas ETFs and whether they’re worth investing in.

  • Ethical ETFs

    Ethical ETFs has been hugely successful in recent years. Find out more about ethical ETFs and whether they’re worth investing in.

  • How do we rate stocks and shares ISAs?

    We’ve rated stocks and shares ISAs to find the best one for different categories. Find out the categories we scored them on and how it works.

  • Dividend ETFs

    Dividend ETFs are funds that are traded on stock exchanges that are heavily focused on companies that pay dividends.

  • Invest in bond ETFs

    Find out what Bond ETFs are and how to invest in them.

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site