If you’re looking to invest in the financial markets but don’t have the time or knowledge to pick individual assets – exchange-traded funds (ETFs) could be your saviour. This is because ETF providers such as iShares will buy and sell financial assets on your behalf – allowing you to sit back and make your money work for you.
In this guide, we review and analyze the best iShares ETFs UK. We also walk you through the 10-minute process of investing in your chosen iShares ETF with a commission-free FCA broker!
Below you will find a breakdown of which funds made our list of the best iShares ETF UK for 2021. By scrolling down, you can read our full analysis to find out why we like the selected ETFs in question.
- iShares Core FTSE 100 UCITS ETF – Best iShares ETF UK to Invest in the LSE – Invest Now
- iShares Core S&P 500 UCITS ETF – Best iShares ETF UK to Invest in US Markets – Invest Now
- iShares Corp Bond UCITS ETF – Best iShares ETF UK to Invest in Bonds – Invest Now
- iShares Gold Trust ETF – Best iShares ETF UK to Invest in Gold
- iShares Core MSCI World UCITS ETF – Best iShares ETF UK to Create a Global Portfolio of Stocks
Note: If you’re also interested in the best Vanguard ETFs – check out which funds we like the look of!
As one of the larger fund managers globally – it should come as no surprise to learn that there are now hundreds of iShares ETFs to choose from. The ETFs that you have at your disposal cover virtually every financial market possible.
As such, whether you’re interested in stock market indexes like the FTSE, gold, bonds, or a basket of high-yield dividend shares – there is likely to be an iShares ETF that alligns with your financial goals.
But, we can’t cover each and every fund – so below we review a selection of iShares’ best ETFs in the market right now!
1. iShares Core FTSE 100 UCITS ETF – Best iShares ETF UK to Invest in the London Stock Exchange
If you are looking to invest in UK companies – you might be thinking about picking and choosing individual stocks that you like the look of. However, a much better approach to investing in the UK stock markets is to consider the iShares Core FTSE 100 UCITS ETF. As the name suggests, this ETF looks to track the FTSE 100 index like-for-like.
In order to do this, iShares will buy shares in all 100 companies that are listed on the FTSE 100 at a proportionate weight. After all, companies with a much larger market valuation will continue more to index. For example, London Stock Exchange powerhouses Unilever (5.49%), AstraZeneca (5.16%), HSBC (5.03%), and Diageo (3.75%) collectively contribute over 19% of the entire FTSE.
This is because they have significantly higher market valuations in comparison to the likes of Sage Group and RSA Insurance – which contribute just 0.36% and 0.39%, respectively. As a result, the iShares Core FTSE 100 UCITS ETF gives you the best chance possible of gaining exposure to the performance of the wider UK stock markets.
In terms of how this ETF works, you will indirectly own a piece of all FTSE 100 shares. Your holdings in each share will be based on the amount you invest into the iShares ETF and the respective weighting. For example, if you invested £1,000 – you would hold £54.90 in Unilever shares and £37.50 in Diageo.
The value of the iShares Core FTSE 100 UCITS ETF therefore rises and falls in line with the performance of the shares within the portfolio. In addition to capital gains via rising stock prices, this ETF also entitles you to dividends. After all, many of the stocks listed on the FTSE 100 pay dividends every three months – so you will receive your share.
Looking at the performance of the iShares Core FTSE 100 UCITS ETF – this has been virtually like-for-like with benchmark figures. For example, based on a 10-year period, the FTSE 100 benchmark has grown by an annualized average of 4.67%. In comparison, the iShares Core FTSE 100 UCITS ETF has grown by 4.48%.
If you like the sound of this and want to invest in iShares FTSE 100 UCITS ETF – you don’t need to invest hundreds of pounds. Instead – if you’re on a budget of simply want to diversify – the minimum investment at eToro is just $50 – or about £35. Plus, the aforementioned FCA broker doesn’t charge any dealing commissions on iShares ETFs – or any asset class for that matter!
Your capital is at risk.
2. iShares Core S&P 500 UCITS ETF – Best iShares ETF UK to Invest in the US Stock Markets
Since the coronavirus-related market sell-off that occurred in March 2020 – US stocks have recovered much faster than their UK counterparts. For example, in the 12 months prior to writing this page, the FTSE has grown by just over 14%. Over the very same period, the S&P 500 has grown by over 42%.
As such, more and more UK investors are looking to take money out of the FTSE and instead gain exposure to the American markets. Although you might also consider how to invest in Dow Jones or NASDAQ 100 – the S&P 500 index is the best way to invest in the US economy. This is because the index consists of 500 large-cap companies.
In comparison, the Dow Jones consists of just 30. With this in mind, it might be worth considering the iShares Core S&P 500 UCITS ETF. This best S&P 500 ETF works much in the same way as the previously discussed FTSE 100 fund. That is to say, iShares will buy all 500 shares that are listed on the index.
This means that through a single investment – you will build an instant portfolio that contains 500 American shares. To give you an idea of some of the biggest names held by the iShares Core S&P 500 UCITS ETF, check out the list below:
- Alphabet (Google)
- Berkshire Hathaway
- JPMorgan Chase & Co
- Johnson & Johnson
As you can see from the above, you are investing in some of the most established and valued companies not just in the US – but globally. Plus, hundreds of stocks held in the iShares Core S&P 500 UCITS ETF pay dividends – so you’ll receive a payment every three months.
In terms of this ETF’s performance since it was launched in 2010 – long-term investors have been rewarded handsomely. Based on the average annualized return – this works out as gains of 13.92% per year. Interestingly, the benchmark index has returned 13.64% over the same period – meaning that iShares has outperformed the market.
Your capital is at risk.
3. iShares Corp Bond UCITS ETF – Best iShares ETF UK to Invest in Corporate Bonds
The best iShares ETFs UK that we have discussed thus far have focused on stocks. With that said, it’s well worth diversifying into other asset classes to mitigate your risk. A great option in this respect is the iShares Corp Bond UCITS ETF.
As the name implies, this ETF will give you access to corporate bonds – all of which are issued in the US dollar. As such, the vast majority of bonds held in this iShares ETF are corporations listed American. In fact, through a single investment, you will be buying a basket of bonds that consists of 2,300 instruments.
To give you an idea of some of the issuers, check out the list below:
- GE Capital International Funding
- Anheuser-Busch Companies
- CVS Health Corp
- Goldman Sachs
- T-Mobile USA
- Boeing Co
The beauty about the iShares Corp Bond UCITS ETF is that the largest weighted instrument is just 0.39% (excluding US dollars – which is 0.7%). As such, the portfolio is super-diversified and thus – vastly reduces your risk. In terms of how a bond ETF like this works – you will be entitled to your share of any coupon payments that the fund collects.
This is paid out to you on a quarterly basis at an amount proportionate to what you invest. There is also the chance to make capital gains when the NAV (Net Asset Value) of the iShares Corp Bond UCITS ETF increases. This is possible because iShares will rarely hold on to bonds until maturity. Instead, the ETF provider will look to sell them on the secondary market at a premium.
When it comes to past performance, This is yet another iShares ETF that has rewarded long-term investors handsomely. This stands at an average annualized return of 4.89% since the fund was launched in 2003. Had you reinvested your dividend payments every quarter along the way – you would now be looking at a sizable portfolio value.
Your capital is at risk.
4. iShares Gold Trust ETF – Best iShares ETF UK to Invest in Gold
If you thought that the best iShares ETFs UK were limited to just stocks and bonds – you would be wrong. This is because the ETF provider also offers funds that track precious metals like gold and silver. Although there is a solid case to be made for silver ETFs, gold is the de-factor store of value, safe haven, and hedging tool with most investors on Wall Street.
With this in mind, it’s well worth considering ring the iShares Gold Trust ETF. Unlike the other iShares funds we have discussed so far – this ETF won’t get you access to a hugely diversified portfolio of assets. On the contrary – you will be investing in one asset and one asset only – gold.
In other words, iShares has personally purchased gold bullion on behalf of its investors and subsequently stores it in various insured vaults around the world. As such, by investing in this ETF – you are indirectly gaining access to gold – without having to worry about keeping it safe.
Naturally, this gold ETF will closely mirror the real-world value of the precious metal. For example, the benchmark index for gold rose by 24.17% in the 12 months prior to writing this page. The iShares Gold Trust ETF increased by 23.83% – which is very close.
Of course, there is a slight adverse variation between the ETF and benchmark performance – as iShares needs to factor in the costs of running the fund, storing and insuring the gold, and facilitating account functions like deposits/withdrawals and customer support.
Nevertheless, if you are planning to allocate some of your investment funds into gold – doing it through the iShares Gold Trust ETF is a no-brainer. Firstly, the ‘sponsor fee’ will cost you just 0.25% per year. This means that for every £500 you invest – you’ll pay just £1.25 to iShares. Plus, when you invest through eToro – you won’t pay any dealing commissions.
Secondly, the iShares Gold Trust ETF allows you to invest in this precious metal without ever having to tie your money up. This is because it trades on the NYSE Acra – meaning you can cash out your gold position at any given time. Finally, the minimum investment when going through eToro is just $50 – so you don’t need a lot of money to get involved.
Your capital is at risk.
5. iShares Core MSCI World UCITS ETF – Best iShares ETF UK to Create a Global Portfolio of Stocks
The two previous stock-based iShares ETFs focused on a specific marketplace – the UK and the US. However, if you are looking to create a highly diversified portfolio of stocks from every corner of the globe – this best MSCI world index ETF is likely to be of interest.
Put simply, this iShares ETF will get you access to over 1,500 stocks from 23 countries. Although this covers 65% of the portfolio held in leading US stocks – such as Apple, Amazon, Google, Facebook, and Tesla – there’s plenty of exposure to other regions. For example, 7% of the portfolio is held in Japanese stocks while 3% focuses on Canadian stocks.
There is also exposure to the UK, France, Germany, Australia, and Sweden. Ordinarily, a global portfolio like this would attract an unfavorable expense ratio – owning the costs involved in sourcing foreign equities. However, this couldn’t be further from the case with the iShares Core MSCI World UCITS ETF – as the annual charge is just 0.20%.
Sure, this is higher than the previously discussed iShares ETFs that track the FTSE 100 and S&P 500. But, the performance of this fund more than speaks for itself. In fact, based on a 10-year period, the iShares Core MSCI World UCITS ETF has generated average annualized returns of 10.18%.
Your capital is at risk.
iShares is a large-scale financial institution that offers a broad range of ETFs and other fund investments. In simple terms, the provider allows everyday UK retail clients to invest in a basket of assets through a single trade.
This permits a purely passive investment experience – as iShares will buy, sell, and trade financial assets on your behalf.
The best thing about iShares is that it offers a significant number of ETFs to choose from – so there is something to suit all investor profiles.
- If you’re interested in stocks – iShares offers several ETFs that track popular index funds like the FTSE 100, invest in FTSE 250, Dow Jones, and S&P 500.
- You can also invest in specific types of stocks through an iShares ETF. For instance, if you’re looking for growth stocks or dividend stocks in particular – iShares has an ETF for you.
- Outside of the stocks and shares arena, iShares also offers ETFs that cover bonds and even commodities like gold and silver.
The investment process is also very simple when opting for an iShares ETF. This is because once you make an investment, there is nothing more to do until you decide to cash out. You can do this at any given time during standard market hours.
And course – other than commodity trading ETFs – most iShares funds will generate dividends. This is usually paid every three months- which you can then reinvest to benefit from compound interest.
Make no mistake about it – the best iShares ETFs UK are ideal for investing in a diversified basket of assets in a completely passive nature. However, with more than 380 such ETFs to choose from – knowing which one to opt for can be a challenge.
With this in mind, below we explain how you can find the best iShares ETF UK for your financial goals and appetite to risk.
What assets are you interested in?
The first part of the selection process is to identify which assets you are interested in gaining exposure to.
Your options largely center on the following:
- Index Funds: If you want to invest in an index fund – there are plenty of iShares ETFs to choose from. This includes ETFs that track the FTSE 100, China 25, NASDAQ 100, Dow Jones, and the Russell 1000.
- Global Stocks: iShares offers a number of ETFs that aim to give you exposure to the global stock markets. For example, by opting for the iShares Core MSCI World UCITS ETF, you will be investing in over 1,500 stocks from 23 different countries.
- Specific Stock Types: There are also iShares ETFs that target a specific niche of the stock markets. This includes ETFs that track the best-performing growth stocks, dividend stocks, and blue-chip stocks.
- Corporate Bonds: iShares also offers ETFs that focus on corporate bonds. This is a good way to diversify away from the stock markets. The iShares Corp Bond UCITS ETF, for example, gives you access to over 2,300 corporate bonds from the US.
- Government Bonds: If you want to invest in high-grade government bonds, there are several iShares ETFs to choose from. Many of these focus on US Treasuries and T-Bill.
- Blended Portfolio: To diversify even further – it might be worth considering a blended iShares ETF. This means that you will be invested in a collection of stocks and bonds.
- Commodities: iShares also offers ETFs that are backed by precious metals like gold and silver. This offers a low-cost way to invest in your chosen commodity.
As you can see from the above – there is an iShares ETF to cover all bases.
What returns are you looking for?
There is often a wide disparity between the types of returns that each iShares ETF has generated since its inception.
- For example, over a 10-year period, the iShares Core FTSE 100 UCITS ETF has generated averaged annualized returns of 4.67%.
- At the other end of the scale, the iShares Core S&P 500 UCITS ETF has managed average annualized gains of 13.92% over the same period.
Past performance doesn’t ensure that future returns will remain constant. It does, however, give you an idea of how much growth your chosen iShares ETF might look to target.
How much risk are you willing to take?
Like any investment you are considering – you also need to think about how much risk you are comfortable taking. You don’t need to be a seasoned investor to determine what sort of risk the ETF takes – as you can assess this by looking at the types of markets and assets that are being targeted.
For example, if you were to invest in the iShares Core MSCI World UCITS ETF – the risks on this fund would be considered above-average. The reason being is that there is exposure to less liquid markets like Hong Kong, Sweden, Canada, and the Netherlands.
On the other hand, if you opted for the iShares Corp Bond UCITS ETF – the risks are much lower. This is because you are investing in high-grade corporate bonds issued by established American institutions. Plus, the largest allocation given to a single bond is just 0.39%.
What fees does the iShares fund charge?
Each and every iShares fund will come with an expense ratio. This is expressed as a percentage and subsequently multiplied by the amount you have invested in the ETF. For example, the iShares Corp Bond UCITS ETF carries an expense ratio of 0.20% per year.
As such, if you invested £1,000 into this ETF, you would pay £2 per year. The iShares Core S&P 500 UCITS ETF is even cheaper at just 0.07% per year – or 70p for every £1,000 invested.
Additionally, brokers like Hargreaves Lansdown also charge an annual fee for as long as you keep hold of your ETF investment. This would be expressed as a percentage and charged in addition to the ETF expense ratio.
Once you have selected the best iShares ETF UK for your financial goals – it’s then time to locate a suitable investment platform. There are many such platforms that support iShares funds – so be sure to check metrics surrounding fees and commissions, minimum account balances, supported payment methods, and customer support.
To point you in the right direction – below we discuss a small selection of trading platforms that offer markets on the best iShares ETFs UK.
1. eToro – Invest in iShares ETFs with 0% Commission
With more than 20 million customers now using the eToro platform, this broker is by far the most popular in the UK – and for good reason. First and foremost, eToro gives you access to all of the best iShares ETFs UK that we have discussed on this page, as well as others like the ishares US technology ETF.
This covers ETFs that track index funds, gold, corporate bonds, US Treasuries, dividend stocks, the emerging economies, and more. Although you will still be liable for the respective fund expense ratio – eToro doesn’t charge any dealing commissions. This means that when you invest in your chosen ETF you won’t pay any fees. This is also the case when you cash out.
Plus, eToro doesn’t charge any ongoing platform fees either. This means you can keep hold of your iShares ETF investment for as long as you wish. The minimum investment on ETFs at eToro is just $50 – or £35. This means that with a $500 investment, you could allocate funds into 10 different iShares funds. If you’re also planning to add some individual stocks to your investment portfolio, eToro covers more than 2,400 shares across 17 UK and international exchanges.
Once again, this doesn’t attract any dealing commissions or platform fees – even if you are buying international stocks. In terms of payments, eToro supports UK debit/credit cards, Paypal, Skrill, Neteller, and bank transfers. All options apart from the bank transfer are processed instantly. Crucially, eToro is authorized and regulated by the Financial Conduct Authority (FCA). Your capital is also protected by the Financial Services Compensation Scheme (FSCS).
- Super user-friendly online trading platform
- Buy stocks without paying any commission or share dealing charges
- Trade CFDs in the form of stocks, indices, commodities, forex, and more
- 2,400+ stocks listed on the UK and international markets
- Deposit funds with a debit/credit card, e-wallet, or UK bank account
- Ability to copy the trades of other users
- FCA and FSCS protections
- Not suitable for advanced traders that like to perform technical analysis
67% of retail investors lose money trading CFDs at this site
2. Libertex – Trade iShares ETFs with ZERO Spread and Leverage
If you are planning to invest in an iShares ETF over several months or years – eToro is the way to go. However, if you have a bit of trading experience and wish to access the iShares ETF market in a more flexible manner – you might want to consider Libertex.
The provider – which was launched in the late 90s and specializes in CFD trading markets – allows you to speculate on the future value of many iShares ETFs. This covers ETFs that track small and large-cap index funds, the emerging markets, US Treasuries, and more. Irrespective of which iShares ETF you decide to trade, Libertex is a ZERO spread broker.
This means that you will get industry-leading bid/ask prices. Not only that – but the commissions charged by Libertex are really low. For example, the iShares Core S&P Mid-Cap ETF and iShares Latin America 40 ETF can be traded at a commission of just 0.08% and 0.175%, respectively. It is important to remember that when you trade iShares ETFs at Libertex via CFD derivatives – you don’t actually own the underlying assets.
On the flip side, this allows you to trade with leverage of up to 1:5. For example, if you are bullish on the iShares MSCI Germany ETF and stake £200 – you can turn this into a position worth £1,000. Furthermore, all iShares ETFs at Libertex can be traded long or short. The latter means that you are speculating on the value of the ETF falling. This isn’t something that you can do when using a traditional stock broker.
If you do like the sound of what Libertex offers – the minimum deposit is just £100. You can even trade iShares ETFs via the Libertex demo account before risking your own money. This will give you the chance to see whether or not CFDs are for you. Supported payment methods at Libertex include UK debit/credit cards, bank transfers, and several e-wallets. Finally, once you initially fund your account at Libertex – the minimum deposit goes down to just £10.
- Zero spread CFD trading
- Very competitive commissions
- Good educational resources
- Long established broker
- Trade stocks and indices like the Dow Jones
- Compatible with MT4
- Great choice of markets
- Only offers CFDs
83% of retail investors lose money trading CFDs at this site.
If you’ve read our guide up to this point – you should now have chosen the best iShares ETF UK for you. You should also have a good idea as to which brokerage platform you would like to purchase the ETF through.
To conclude our guide, we are going to walk you through the process of investing in an iShares ETF at eToro on a commission-free basis.
Step 1: Open an Account and Upload ID
The first stage of the process is to open an account with eToro – which you can do through the provider’s website or investment app.
67% of retail investor accounts lose money when trading CFDs with this provider.
Follow the on-screen instructions by providing your name, address, date of birth, and contact details. You’ll also need to verify your mobile number.
Step 2: Confirm Identity
To ensure that eToro complies with the FCA, it must collect a copy of your passport or driver’s license. The broker also needs a copy of a recently-issued bank statement or utility bill. This is industry-standard and the documents will be verified within a couple of minutes.
If for any reason you wish to skip this step – that’s fine. You will, however, need to provide the aforementioned documents before you can withdraw funds out of eToro, or you deposit more than $2,250).
Step 3: Make a Deposit
eToro allows you to deposit funds with a debit/credit card, Paypal, Skrill, Neteller, or bank transfer. Simply select your preferred payment method, enter the amount you wish to deposit, and confirm the transaction.
Step 4: Search for an iShares ETF
If you know which iShares ETF you wish to invest in – search for it to go straight to the order page. In our example below, we are looking to invest in the iShares FTSE 100 UCITS ETF.
You can also click on the ‘Trade Markets’ button, followed by ‘ETFs’ – to browse the many iShares funds that eToro hosts.
Step 5: Invest in iShares ETF
To complete your commission-free iShares ETF investment at eToro – click on the ‘Trade’ button. This will populate an order box like the image below.
67% of retail investor accounts lose money when trading CFDs with this provider.
All you need to do is enter the amount you wish to invest and click on the ‘Open Trade’ button.
That’s it – you just invested in an iShares ETF without paying any dealing fees!
In conclusion, the best iShares ETFs UK allow you to invest in a passive manner. This is because through a single investment – iShares will buy and sell assets on your behalf.
This is the only legwork that you need to put in the process of choosing the best iShares ETF UK ,for your financial goals and tolerance for risk. As we have discussed in this guide, there are more than 380 such funds that cover everything from stocks, index funds, bonds, gold, and more.
If you’re ready to invest in the best iShares ETFs UK right now – you can do so without paying any commission when using eToro. All of the iShares funds discussed today are available at a minimum investment of just $50 – or about £35. Best of all, the end-to-end investment process takes less than 10 minutes!
67% of retail investor accounts lose money when trading CFDs with this provider.
What are the best ETF funds UK?
The top ETF providers in the United Kingdom investment space includes iShares (Blackrock), Vanguard, Invesco, and SPDR.
What is the minimum to invest in an iShares ETF UK
The minimum investment depends on which ETF broker you sign up with. At eToro, you can invest in iShares ETF at a minimum of $50 USD - or about £35 GBP.
Is iShares owned by BlackRock?
Yes, iShares is a iShares of Blackrock - which is one the largest financial institutions globally.
How much do iShares ETFs cost?
iShares charges an annual expense ratio that can go as low as 0.03% per year. Even the iShares Gold Trust ETF comes at a fee of just 0.25% annually - which offers great value.
How often do iShares ETFs pay dividends ?
In the vast majority of cases, iShares ETFs in the UK will distribute a dividend payment every three months. This will be reflected in the brokerage account that you are holding the ETF.