How to Buy ETFs on eToro - Step-by-Step Guide

Exchange-traded funds, or ETFs, are one of the easiest ways to build a diversified investment portfolio. Think of them as baskets that hold a mixture of assets like stocks or bonds. This allows you to invest in many instruments through a single purchase.

eToro is one of the platforms that offers access to real ETFs. This means that when you buy them, you actually own a small share of the investment fund itself rather than simply speculating on its price movements.

In this step-by-step guide, you will learn exactly how to buy ETFs on eToro. We will cover the whole process from creating an account to actually buying the ETF.

Step-by-Step Guide to Buying ETFs on eToro

Step 1: Create an eToro Account

Before you can execute your first trade, you need to create an account on eToro. To do this, start by visiting the eToro website and clicking on the Join Now button. You will be prompted to enter basic details such as your name, email address, and a secure password.

eToro is a multi-asset investment platform. Your capital is at risk.

Next, you will be presented with a set of questions that will help the company learn more about your financial and investment experience. These questions may refer to your professional status, trading knowledge, investment goals, how much you’re willing to risk, and more.

Step 2: Verify Your Account (KYC Process)

After registration, eToro requires you to verify your identity as part of regulatory compliance. This process involves uploading a government-issued identification document, such as a passport or national ID, plus proof of address like a utility bill or bank statement. This step ensures the platform meets legal requirements and helps remove limitations from your account.

Step 3: Deposit Funds

Once your account is verified, you will need to fund it. To do this, click on the Deposit Funds button within your dashboard. You will be given several payment options, including bank transfers, credit or debit cards, and various e-wallets, depending on your location.

Enter the amount you wish to deposit and confirm the transaction. After the funds are processed, they will appear in your account balance and be ready for investing.

Step 4: Search for ETFs

With funds now in your account, the next step is to find an ETF to invest in. You can do this by navigating to the Discover page and hitting the ETF button. Alternatively, you can search for a specific ETF ticker (symbol), like Invesco QQQ. You can also search for certain categories of ETFs, such as Bond ETF or Nasdaq ETF, if you are interested in a particular type of ETF but don’t know the tickers.

Step 5: Select an ETF

Once you browse your choices, you can click on an individual ETF to get more information on it, including charts that track previous performance, relevant statistics, and information on who manages it. Taking time to analyze this information is important before committing your funds.

Step 6: Click Buy

Once you’ve found the right ETF for you, you can click the green button at the top right corner (or the bottom of the screen on mobile). This is where you will configure your investment. The trading interface allows you to choose whether to buy or sell, set your investment amount, and adjust other parameters. In the order window, make sure that leverage is set to 1×.

There, you’ll be prompted to enter the amount you want to invest in the ETF. You don’t need a large sum to get started. On eToro, you can invest from as little as $50 (depending on your country) by buying fractional shares, and this applies to any ETF on the platform. After entering your preferred amount, simply click Buy. The transaction is usually completed within a short moment.

Understanding ETF Ownership on eToro

When you follow the steps above, eToro purchases the shares on your behalf and holds them in a segregated account. This means you will own the underlying asset and will benefit directly from price movements. You may also receive dividends if the ETF distributes them. This type of investing is generally suited for long-term strategies.

Unlike CFDs, holding the real underlying ETF does not incur overnight charges. Moreover, with CFDs, you are no longer holding the ETF itself but are instead speculating on its price movement. This is generally used for short-term trading and does not provide the same long-term ownership benefits as holding the actual ETF.

eToro’s Credibility

Before investing with any broker, it is very important to verify their credibility and reputation. Positively, eToro is widely regarded as a reputable broker and is regulated by several financial authorities across different regions. These include the CySEC in Cyprus, the FCA in the UK, the ASIC in Australia, the FSRA in Abu Dhabi, and the FSAS in Seychelles, among others.

Beyond regulation, eToro also has a strong reputation among users. On Trustpilot, it holds a rating of around 4.2 out of 5 based on over 31,100 reviews. Many of the reviewers highlight its user-friendly platform, wide range of assets, and copy trading features.

Finally, the broker has received a plethora of different awards over the years and now serves over 40 million users. This industry recognition and large client base further enhance the credibility of eToro.

Final Comments

Buying ETFs on eToro is a straightforward process that can be completed in just a few steps. This guide covered every step from creating and verifying your account to selecting and purchasing your chosen ETF. Fortunately, eToro makes investing accessible even for new traders by allowing fractional investments, simple navigation, and a wide range of ETF options.

Most importantly, when you buy real ETFs on eToro, you are not just speculating on price movements but gaining actual ownership of a portion of the underlying fund. As with any investment, it is essential to take time to understand what you are buying. Make sure you review the ETF’s performance and structure, and ensure it aligns with your financial goals and risk tolerance.