Range of ETFs added to the Foundation Fundlist

Each has been selected for their transparency and value for money.

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  1. Rob Morgan

A selection of Exchange Traded Funds (ETFs) has been added to our Foundation Fundlist of preferred funds for new investment. The 13 ETFs offer simple, low cost exposure to popular investment areas, adopting a ‘passive’ investment strategy that aims to replicate the returns from a particular index or asset class.

One of the key differences between an ETF and unit trusts or OEICs is that ETFs are traded on a stock exchange, just like company shares. This means they are constantly priced during market hours. ETFs are cheaper for fund management companies to run, so they often have a lower annual ongoing charges figure than a comparable unit trust or OEIC. However, you do also need to factor in any fees for share dealing when buying and selling them.

Each of the ETFs added to the list has been selected for their transparency, low charges and typically narrow spreads – i.e. the difference between buying and selling prices.

Benefits of ETFs

  • Convenience – buy one share to track a whole index or market
  • Choice – ETFs are offered on virtually all asset classes, there’s over 1,500 available to UK investors
  • Often low cost as they don’t try and beat the market
  • Live prices throughout the trading day – see the price you buy or sell at

Risks of ETFs

Like all stock market investments, the value of an ETF will rise and fall and neither the capital nor income is guaranteed. All ETFs are linked to the value of an asset or index, but in times of market stress the value at which you can buy or sell may be different from that of the index. In addition, each ETF is exposed to a mixture of risks related to its asset class and method of investing.

The full details of the risks of a particular ETF can be found in the relevant Key Investor Information Document (KIID) and Simplified Prospectus. These can be found in the Key Features and Documents tab on the particular ETF’s page on our website.

ETFs on the Foundation Fundlist

To help investors filter the huge universe of products available we have added the following ETFs covering major investment areas to the passive section of out Foundation Fundlist. Each has been selected by Lynn Hutchinson, our Senior Analyst specialising in passive investments, and we hope it serves as a useful starting point for our customers’ own research into this type of investment.

UK

iShares CORE FTSE 100 UCITS ETF (inc)

iShares CORE FTSE 100 UCITS ETF (acc)

US

Vanguard S&P 500 UCITS ETF

Europe

Vanguard FTSE Developed Europe ex-UK UCITS ETF

Japan

Vanguard FTSE Japan UCITS ETF

Global

iShares CORE MSCI World UCITS ETF

Emerging Markets

iShares CORE MSCI EM IMI UCITS ETF

Asia

Vanguard FTSE Developed Asia Pacific ex Japan UCITS ETF

Bonds

iShares £ Corporate Bond 0-5 UCITS ETF

iShares Core £ Corporate Bond UCITS ETF

iShares £ Ultrashort Bond UCITS ETF

Lyxor FTSE Actuaries UK Gilts UCITS ETF

Specialist

iShares Physical Gold ETC

Please note iShares Physical Gold is an ETC or ‘exchange traded commodity’, which aims to follow the price of a specified physical commodity, in this case gold bullion. ETCs therefore lack the diversification of ETFs as they concentrate on a single asset and can be higher risk.

Past performance is not a reliable guide to future returns. This website is not personal advice based on your circumstances. No news or research item is a personal recommendation to deal. Investment decisions in fund and other collective investments should only be made after reading the Key Investor Information Document or Key Information Document, Supplementary Information Document and Prospectus. If you are unsure of the suitability of your investment please seek professional advice.

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Investment involves risk. You may get back less than invested.