Trade ETF CFDs

Exchange-traded funds (ETFs) are a unique investment vehicle that allow you to express a view on a particular equity market thematic, sector, and even the broader stock markets, both on an individual country and global basis.

Why trade ETF CFDs with Dotfins?

We offer more than 100 ETFs that track the performance of sectors including mining, energy, technology, bond markets and retail.

Our ETF CFDs track the overall performance of equity markets in 35 countries and across 6 continents.

Wherever your equity market interests lie, we have an ETF for you to trade.

Our commissions

Trading ETF CFDs with Dotfins means you trade on direct underlying exchange prices with no additional mark-ups added to the bid/offer spread. Instead, you'll pay a small commission per trade placed. Here's the breakdown:

$0.02 (USD) commission per share, per trade.

Exchange spreads. No markups.

Overnight funding costs (if you hold positions over consecutive days).

Exchange-traded funds (ETFs) are funds that track and attempt to replicate the performance of a basket of shares in a particular exchange, region, country or market sector. In purchasing an ETF via an exchange, you are purchasing a share (unit) in a managed fund whose performance is tied to the constituent companies that the fund has invested in. Think of it like a share portfolio that is managed by professional fund managers with a specific mandate.

As an investor or trader, market themes and trends are often used to determine where to allocate capital and to identify trading opportunities. But equity markets are saturated. There's so many stocks listed on numerous developed and emerging exchanges around the world. It can be time-consuming and complex to take advantage of, say, a trend towards renewable energy use if you had to construct your own share portfolio with individual companies from the renewable energy sector. It's also very costly, and capital intensive.

This is where ETFs do the work for you. ETFs are actively traded and rebalanced portfolios that track the particular market or sector you want to be involved in, taking away the hassle of portfolio construction, foreign exchange fees, rebalancing and complications that arise from share ownership in numerous companies, such as admin and taxes.

Fund managers create ETFs through buying and holding a basket of stocks that reflect the industry, region, exchange or thematic they intend to track. They rebalance the portfolio either actively or passively (less-often) to reflect changes in the makeup of the industry and the performance of its participants. The aggregated, weighted performance of these companies then determines the performance of the fund.

Any associated fees, such as annual management fees, trading costs and marketing costs, are built-in to the unit price of the ETF (they reduce the value of the ETF). They are deducted daily from the net-asset value (NAV) of the fund, and are expressed as a percentage, known as the expense ratio. The expense ratio incorporates all of the costs associated with setting up, managing and maintaining the fund, and is the main ETF cost metric to be aware of. Active ETFs generally have higher expense ratios than passive ETFs, which trade less frequently.

Why trade ETF CFDs?

we offer are contracts-for-difference (CFDs) on ETFs. In trading CFDs, you're not purchasing or selling your stake in an ETF on a particular exchange. Rather, you're expressing a view on the underlying price of the ETF. This means you can go long and short without restrictions, since there's no ownership interest.
If you anticipate a particular market sector or region to experience a decline in growth and value, you can short an ETF CFD in the same, straight-forward manner as you would buy an ETF CFD were you to see it appreciating in value.
ETF CFDs also enable you to trade with leverage, which means you only need a portion of the notional value of your trade to enter it, reducing your capital requirements. This means you can trade more, and expose your capital to a wider array of opportunities.
There are a number of other advantages listed below, and like any financial asset, there are risks involved.

Advantages

Trade any ETF long or short – potentially profiting from any direction of the ETF. Trade movement on core markets, interesting themes and often hard to access markets.

Trade on leverage – place a percentage of the notional USD face-value down, and make your capital go further.
Cost-effective – 2 cents a share allows for traders to be highly active in their trading approach.

Use automated trading strategies and apply a diverse range of risk management strategies on the powerful MT5 platform.

React real-time - Trade some of the most liquid ETFs in the pre-and post-market session.

Diversification - Rather than trading one specific stock, ETFs offer diversification to a market theme, as well as making that theme incredibly intuitive.

Disadvantages

Leveraged trading imposes additional risk of loss to your capital.

No ownership interest - you don’t own a share in the underlying ETF when you trade CFDs, so you are not entitled to some benefits that ordinary investors would be.

Spreads - while we provide exchange spreads for our ETF CFDs, like any market the underlying spread may widen during periods of volatility, increasing your costs.