XTB adds auto ETF investing plans for UK clients

XTB investment plans allows UK clients to save and invest regular amounts via a range of ETF-based strategies.

Using the service, UK investors will now be able to set up regular payments or contributions to their existing portfolios.

Or, for more confident investors, they build new portfolios from scratch, and top them up using a pre-defined asset allocation plan.

XTB’s investment plans allow users to create a bespoke portfolio(s) from more than 350 ETFs.

The plans are aimed at long-term savers, or those looking to create an investment portfolio for their retirement.

• Want to invest in ETFs? Our picks of the best ETF investing platforms.

What is an ETF?

ETFs or Exchange Traded Funds are open-ended funds similar to mutual funds.

However, unlike mutual funds, ETFs are listed and traded on a stock exchange just like shares in a limited company.

An ETF typically an tracks equity index, a sector, an industry or a country, but it can also aim to capture the price movements of commodities and bonds.

Or even specific investment themes and factors, such as growth, value, equity income, low volatility etc.

Typically an ETF is a passive investment vehicle, which holds a basket of stocks, shares or other instruments that allow it to track and capture the returns of the underlying investment.

For example, the iShares Core FTSE 100 UCITS ETF (ISF LN) seeks to track the performance of an index composed of the 100 largest UK companies.

To do this it holds a basket of UK equities, in various weights, drawn from across 11 sectors.

Its biggest holdings are in the largest FTSE 100 stocks, such as Shell, AstraZeneca HSBC and Unilever.

Unlike shares in an investment trust or other closed-end fund, the value of units in the ETF primarily depends on changes in the value of the underlying investment and not on the supply and demand around the ETF units themselves.

• Related Guide: How to invest in ETFs.

Commission-free investing for smaller accounts

XTB’s investment plans are commission-free as long as you don’t turn over €100,000 or more per month if you do then you will pay a 0.2% commission subject to a minimum ticket charge of £10.00.

Note that if you buy or sell a foreign ETF i.e. one not priced in sterling, then your transaction will be subject to a 0.50% FX conversion fee.

The ability to make regular contributions to a predefined savings and investment plan (or plans)  is a very powerful tool.

Saving over the long term allows the investor to benefit from the effects of compounding, through the reinvestment of dividends.

And to be able to ride out shorter-term fluctuations in the market.

The fact that you can now do that through XTB, with minimal or no dealing charges is another plus point for retail investors.