Exchange Traded Funds (ETFs) Exchange-traded funds are open ended mutual funds that can be traded at any time throughout the course of the day and are listed on the London Stock Exchange. Typically, ETFs try to replicate a stock market index such as the FTSE 100 Index or S&P 500 or a market sector such as energy or technology, or a commodity such as gold or oil. This gives private investors access to the index without excessive costs. Unlike an index tracking fund an ETF does not buy the underlying components of the index instead it replicates the performance of the index. This reduces costs and ensures true like for like performance in capital terms. ETFs also do not incur stamp duty on purchases. Management Fees are deducted from the yield which is typically paid out half yearly. In terms of taxation the dividend is taxed like a normal equity dividend and capital gains are taxed under the capital gains tax rules. They can also be invested within an ISA wrapper. ETFs can provide investors low cost access to the market and can easily be monitored. If you are interested in finding out more please contact Claire Markham.

This Company is Authorised & Regulated by the Financial Services Authority