Exchange Traded Funds (ETFs) are increasingly popular with investors for their ability to provide low-cost building blocks as part of a wider portfolio construction. We have trawled through the entire world of ETFs to flag up which we believe to be the top 50 products on offer, split into various categories dependant on what sort of exposure an investor may want. In our search for the best ETFs we first identified the indices that investors should most want to track.
We then went in search of minimal tracking difference, low costs, and good liquidity for each ETF selection. We preferred to see at least two years of tracking difference, where possible, but we also have tried to include some of the more innovative ETF launches as well. This is primarily a list of long-term portfolio building blocks.
While you might want to use an ETF to trade short term movements in the markets, this is not what we have been prioritising in compiling the list. We hope that you can use this list as a starting point for your research into the best ETFs for your portfolio. Where possible, we have chosen the sterling traded versions of the ETFs.
But readers should be aware that the base currency of many ETFs is US dollars. If you feel currency exposure is something you want to manage in an attempt to improve your performance, where possible, we’ve provided the sterling hedged version of the ETF as an alternative for investors who want to take a view on currency movements. We used Morningstar data to analyse performance and fees in combination with the the ETF providers’ factsheets. We have also taken into account the many articles and recommendations on ETFs that the IC funds team has written over the past two years.