How to find Exchange Traded Funds

Searching for suitable index trackers ^[12] often feels like speed dating a roomful of double agents – it’s not easy to find a good match. But having outlined my strategy for finding the index funds ^[9] of your dreams, let’s tackle how to find exchange traded funds (ETFs).

Experience has taught me that no single fund comparison site should be wholly relied upon:

• Fat fingered data entry means inaccurate information is rife on public sites.

• Sites often lag behind recent developments.

• Many sites skip out entire chunks of the market.

I don’t trust brokers to give me a reliable picture, either, so I always hunt for ETFs using a minimum of two independent fund-finding sites. This enables me to cross-reference key facts and sweep as much of the market as possible in a three-stage process.

^[13]

Stage 1: Morningstar ETF Quickrank

Morningstar’s ETF Quickrank ^[14] takes about 30 seconds to use. There are two things to watch out for when selecting your options:

London Stock Exchange – Leave this menu alone unless you know what you’re doing. Trading on foreign exchanges can lead into murky tax ^[15] and trading fee waters, so stick to the London Stock Exchange.

Morningstar Category – Choose the asset class you’re interested in, such as inflation-linked bonds.

Hit search: Morningstar coughs up its findings and you can rank ‘em by Ongoing Charge Figures (OCF) ^[16].

Unfortunately Morningstar does have blind spots, such as missing categories for emerging markets small-caps, momentum ^[17], and low volatility ^[18].

It’s always worth getting a second opinion.

Stage 2: JustETF

JustETF ^[19] is an excellent ETF hunting-ground. It blends accuracy, ease-of-use, and respectable design with relevant information.

I dislike using the search box because it’s a key-word guessing game. Instead, it’s quicker to find the right ETFs using the advanced search function.

Using the left-hand column you can quickly focus your choice by choosing categories such as:

• Asset class
• Geographical region
• Strategy (e.g. dividend, equal weight, value)

Searching by categories is obviously more old-fashioned than tugging on the tabs of a fund screener but it’s also much more effective. Like a 10-pound lump hammer.

Click on the UK in the country category and you’ll see a list of ETFs divided by index, such as FTSE 100, FTSE All-Share, FTSE 250.

Click on the index name and you can drill down into just the FTSE 250 trackers, for example.

Check other categories in the left-hand column to narrow the field still further:

• Use of profit – How the ETF treats dividends, either accumulating or distributing ^[20] on your behalf.

• Replication – Does the ETF track its index using a physical or synthetic ^[21] process?

• Fund domicile – Choose Ireland or Luxembourg to avoid withholding tax ^[15] problems.

There’s also a nice drop down menu that enables you to check if the ETF is into securities lending ^[22].

I do use the search box to find ETFs that don’t fit with the available categories.

For example, JustETF doesn’t currently include qua ^[23]lity ^[23] as an equity strategy. But if you type quality into the search box then the relevant ETFs turn up.

It’s possible that you could find all the ETFs you need purely using JustETF, but I’m as fond of a belt and braces approach as any menswear assistant, so I always use Morningstar as well.

Stage 3: The ETF provider

Appearances can be deceptive in the investment world and facts can change. So once I have my ETF shortlist, I round off my search by visiting the product provider’s website to review the latest literature for the ETFs I’m interested in.

And that’s about it!

Finding the right exchange traded fund doesn’t take long once you’ve nailed your system and got the hang of tools like JustETF ^[19].

Please do share any tips or sites that work for you below.

Take it steady,

The Accumulator

Series Navigation

How to find index funds ^[9]How to buy and sell ETFs ^[10]