It’s good advice to buy a broadly diversified index tracker ETF like one that follows the S&P 500 for US stocks, and other indexes for global stocks.
When you buy an index tracker, you’re buying baskets of shares in other companies – in this case, baskets of shares of companies that are on the S&P 500 list. If you buy 1 share of an S&P 500 index tracker, you are indirectly buying about 0.067 shares of Apple, 0.010 shares of Disney, 0.007 shares of Netflix, and so on across about 500 companies. All S&P 500 trackers contain pretty much the same ingredients (with minor variations), and they all perform similarly to one another (with minor variations).
Crucially, the share price of the fund doesn’t matter. An S&P 500 tracker priced at £300 per share just means you’re getting larger ‘baskets’ than one priced at £6. Buying units of an S&P 500 index tracker is like buying sacks of potatoes at the supermarket: a 10 kg sack costs 10 times as much as a 1 kg sack, but you’re getting 10 times as much potato.
However, there are minor variations among funds. All funds hold back administration fees that reduce your return on investment, and some take more than others. Some funds literally buy every one of the stocks in the index, while others pick just a sample of them. Some update more frequently than others. Some use fancy derivatives in their processes. Some follow the index very closely, others diverge a little. Frankly, if you get an S&P 500 tracker from any of the main providers available for free through Freetrade (Vanguard, iShares, and Invesco) then you’re getting a decent deal. But there is documentation available online for every fund, and you should read up on the specific fund you are considering to understand a bit more about what you’re buying. Just Google the name of the fund, or go to the provider’s website, i.e. Vanguard, iShares, or Invesco for the ones that are offered for free on Freetrade.
To compare ETFs, try websites like Morningstar or Trustnet.
And I suggest reading the following to get an introduction to investing in tracker funds: