In simple terms, fractional investing is the process of buying less than one full share of equity.
What this means for InvestEngine clients is that they can invest as little as £1 into any ETF on the platform, regardless of the share price.
For example, if the unit price of the iShares S&P 500 ETF is £34, on a platform without fractional investing you’d have to invest at least £34 to access the ETF – some ETFs, however, have unit prices of over £1,000.
Through fractional investing, investors can access even the most expensive ETFs on the platform, containing a high number of individual securities at a price that suits them – in this sense, fractional investing helps greatly with diversification.
Fractional investing is also an integral part of InvestEngine’s Savings Plans feature. Clients can add as little as £20 a week to their portfolio and the money is distributed according to their chosen portfolio weights.
See also: What is the "Savings Plans" feature offered by InvestEngine?