What costs are involved in ETFs?
ETFs are very cost efficient. Unlike traditional funds there is no initial service charge to access the investments, so to invest you will only incur standard Barclays Stockbrokers dealing commission – from £6.95 to £12.95 per online trade. Most also carry lower annual management charges (AMC) than traditional funds. For iShares these will be between 0.15% and 0.85%, depending upon the underlying investments.
All distributions made by iShares, including the funds that invest in bonds or Gilts, are categorised as dividend distributions and so investors are taxed as income from investments.
ETFs are currently exempt from Stamp Duty, but please bear in mind that this may change in the future.