Features | Editorial | 10 Mins Read | by
Exchange Traded Funds are great. But the ETF industry has become obsessed with gimmicks. This is a wasted opportunity. There are a number of great ETF ideas that could be pursued.
Exchange Traded Funds (ETFs) trade on the stock market alongside shares. They are easy to understand and offer access to global markets.
Most ETFs are domiciled outside the UK, which means that they do not attract the 0.5% stamp duty on share purchases. You are also able to access ETFs on all the investment platforms.
Another advantage of ETFs is that they aren’t subject to uncapped platform fees on Hargreaves Lansdown or AJ Bell. This can make a significant difference if a client has a relatively large portfolio.
Open-end funds can also be complex due to the different share classes on offer.
The key ETF advantages include
- They are low cost
- They allow for easy global diversification
- They can be bought instantly (unlike open-end funds)
- There is usually no 0.5% stamp duty on purchases
- ETFs can be bought on all platforms
- They can allow you to avoid uncapped platform fees