Master Exchange-Traded Funds with real UK examples, low-cost strategies, and expert insights for building wealth in 2025.
Average ETF Fee
0.05-0.30%
Much cheaper than active funds (0.75-1.5%)
Global ETF Assets
$12+ Trillion
One of the fastest-growing investment types
Minimum Investment
£1-10
Start with fractional shares on most platforms
Trading
Real-time
Buy and sell during market hours like stocks
An Exchange-Traded Fund (ETF) is a basket of investments (stocks, bonds, commodities) that trades on a stock exchange like an individual stock. ETFs allow you to buy hundreds or thousands of assets with a single purchase.
💡 Simple Example:
Instead of buying shares in 500 individual companies, you can buy one ETF (like VUSA) that owns all 500 S&P 500 companies. With £100, you get instant diversification across America's largest companies.
Track major market indices like FTSE 100, S&P 500, or global markets
UK Examples: VUSA (S&P 500), VWRL (Global All-World), VUKE (FTSE 100)
Best For
Long-term passive investors seeking market returns
Average Fee
0.05-0.20%
Risk Level
Medium
Vanguard FTSE All-World UCITS ETF
0.22%/year
Global diversification across developed and emerging markets
Holdings
3,700+ companies
Dividend Yield
~2%
Vanguard S&P 500 UCITS ETF
0.07%/year
Track America's largest companies with ultra-low fees
Holdings
500 US companies
Dividend Yield
~1.5%
Vanguard FTSE 100 UCITS ETF
0.09%/year
Invest in the UK's largest companies
Holdings
100 UK companies
Dividend Yield
~4%
Vanguard FTSE All-World High Div Yield
0.29%/year
Focus on high dividend-paying stocks globally
Holdings
1,800+ high-div companies
Dividend Yield
~3.5%
iShares S&P 500 Information Tech
0.15%/year
Concentrated exposure to US tech giants
Holdings
65+ tech companies
Dividend Yield
~0.8%
Vanguard UK Gilt UCITS ETF
0.07%/year
Safe haven with UK government bond exposure
Holdings
UK government bonds
Dividend Yield
~3-4%
Select a UK broker that offers ETFs with low fees. Popular platforms: Trading 212 (no fees), Vanguard UK, Hargreaves Lansdown, Interactive Investor, Freetrade.
Always invest in ETFs through a Stocks & Shares ISA to avoid capital gains and dividend taxes. This is crucial for long-term wealth building.
Look at the ETF's holdings, fee (TER), tracking error, dividend policy (accumulating vs distributing), and size (assets under management).
Begin with a broad market ETF like VWRL (Global) or VUSA (US). These provide instant diversification across thousands of companies.
Invest a fixed amount monthly (£50-500+) regardless of market conditions. This is called "pound-cost averaging" and reduces timing risk.
Risk: Moderate
VWRL
Global All-World
100%
Perfect for beginners. One ETF, instant global diversification across 3,700+ companies.
Risk: Moderate
VUSA
US Large Cap
60%
VUKE
UK Large Cap
20%
VGOV
UK Bonds
20%
Mix of stocks and bonds for balanced growth and income.
Risk: Higher
VUSA
US Market
50%
IITU
US Tech
30%
EQQQ
Nasdaq 100
20%
Aggressive growth focus on US markets and technology sector.
| Feature | ETFs | Mutual Funds | Individual Stocks |
|---|---|---|---|
| Typical Fees | 0.05-0.30% | 0.75-1.50% | £0 (trading fees only) |
| Diversification | |||
| Real-time Trading | |||
| Minimum Investment | £1-10 | £500-5000 | £1-10 |
| Tax Efficiency | |||
| Management Required | Low | Low | High |
| Research Required | Low | Low | High |
See how your ETF investments could grow over time
Final Portfolio Value
£173,939
ETFs track markets, so when markets fall, your ETF falls too. No protection from downturns.
ETFs may not perfectly match their index due to fees, rebalancing, and cash holdings.
Smaller, niche ETFs may have wide bid-ask spreads and low trading volume.
US ETFs (like VUSA) expose you to GBP/USD exchange rate fluctuations.
Sector ETFs lack diversification. If the sector crashes, your investment crashes.
Owning too many overlapping ETFs increases costs without adding benefits.
What does ETF stand for?
Track your ETF portfolio, analyze performance, and get AI-powered insights with TrioWealth