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ETFs or exchange-traded funds are funds that trade on a stock market. Most ETFs track the performance of a market index or a basket of stocks, so they are an easy way to spread your money across different companies in one go. Because ETFs are listed on stock markets, you can buy and sell them throughout the day.

Freetrade itself is commission-free and has over 200 ETFs to invest in however some of the ETF providers charge an ongoing fee and that is what we will cover here.

You can see what the charges are for any particular ETF in the app by clicking “costs and charges” on the ETF.

If we use one of the most popular ETFs as an example:

S&P 500 (iShares) (£IUSA)
Ongoing charges: 0.0700%
Investment product transaction costs: 0.0226%

The fees are deducted from the ETFs value which means you won’t see a physical transaction or withdrawal from your account.

These charges will be continuous meaning a part part of the fee every day to avoid arbitrage opportunities.

In short ETF fees are expected and are nothing to worry about especially in something like an S&P 500 ETF. Some of the lesser known ETFs may charge a higher fee so always check first.