ETF are there hidden fees?

I appreciate that if you open an account with Vanguard there is a fee i.e. 0.05% admin fees per annum.

However, what is the score with buying into a Vanguard ETF on 212. is there a charge each year? I have had an account more than year and havent seen anything yet. I assume the fee is taking some other way.

I use Vanguard as an example, im sure iShares or WisdomTree charge fees directly or via other platforms

Sorry if a silly question!

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It’s not a silly question at all. Think off the phrase ‘you don’t know what you don’t know’.

The financial markets and regulators, although they try to be transparent, are unnecessarily complicated and can provide too much detail it can become confusing even for those in the industry.

To try and simplify it, you can get open or closed end funds that pool investors money for a small fee with a view of reducing costs and providing a better return for investors.

212 have a number of Vanguard ETFs. These are exchange traded funds. These are open ended, which means there is no limit of supply.

If the ETF holds 100 companies at an equal weight, so if you invest £100 in the ETF, it will invest £1 into 100 companies. It all depends on the ‘ETF’ strategy.

Back to your question, there is a charge for Vanguard running the ETF. This will include Vanguard’s fee, plus regulatory fees for say marketing the ETF in France/Germany/UK and so on. The ETF will also be audited once a year, and will produce regular reports of its performance and holdings.

The costs for these, all inclusive are called an ‘Ongoing Charge’. This is essentially baked in or included in the value of the shares you buy.

This is a popular Vanguard ETF - VWRP

It’s fees are 0.22% a year, and baked into it ts NAV/price.

Then you get platform and trading fees. How much does it cost you to hold or buy this ETF.

Trading212 do not charge you a platform fee(for holding this ETF), nor do they charge you a trading fee, unless your account is in a different currency, in which case it would be a 0.15% FX fee, but you could find an ETF in your own currency.

For comparison, Fidelity or Hargreaves would charge you approx £10 every time you trade, and a 0.35%-0.45% account fee on top.

Does this help explain / make sense?

Also - I think the Vanguard platform fee is 0.25% but not checked it in a while.

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The T212 platform doesn’t show ETF fees so you could say they are “hidden” People surely buy without being aware. I think they should add the fee under instrument details. Or better in the search results somewhere so you sort by fees.

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I think it would be a helpful piece of information to have in the system for new investors, and just general ease.

With that being said, I would hope people would be a bit responsible and look into what they’re buying and investigate the associated fees. I couldn’t imagine not looking into that prior to pushing the button on an IT or ETF.

It’s always also worth checking what builds up the ETF or IT, geographically, companies, weighting’s etc etc.

It’s actually 0.15% for the ISA account, that’s where I’ll be heading next year.

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With my previous broker before you bought an ETF it had a warning checkbox you had to check to say you accept that there are fees and you have read the key investor doc. Now I think about it the FCA might be interested in a company selling ETFs to people without providing them with all info before they buy. Maybe someone else knows the law on that.

I’m sure they’ve looked into the legality side, without being too presumptuous.

We should be dealing with adults here that can think a little bit for themselves.

It kind of goes back to having some form of test prior to allowing trading in real cash. But if 212 don’t need to do that, they probably won’t as it’ll impact revenue etc.

Sure I know what you mean. It’s obvious to most of us. Maybe at least a one liner before you buy to say there are fees something simple is all that’s needed to cover themselves from regulation

Edit. T212 have been in trouble for other things like putting NIO in an ISA so I wouldn’t assume they have looked into it.

Good point. So if you want access to the full range, it’s cheaper for OEICs than most other platforms up to a balance of about 80k. At which point the II £10 a month works out better, and then gives more variety.

If just ETFs, could stick with 212 as 0.15% cheaper :upside_down_face:

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0.15 % for the SIPP, and I think any type of account.
You’re very limited with the funds you can pick though…I know they only offer Vanguard products but even within these it’s very limited in the SIPP. For example there’s no VWRP but there is VWRL.

I just feel a bit more secure elsewhere to be honest, it might be me just being paranoid though

Good spot! I need to check into that as it’ll be one of the ETFs I’d be in

A lot of my ETF’s are Vanguard and the fees are clearly written on the overview page of the website 0.07% / 0.09% this gets taken out during purchases (if I’m right?)

For me it’s not nor would it be very noticeable considering it’s a low % and a % I’m happy to pay as I personally like vanguard funds.

212 don’t have any other charges which is why I’m happy investing EFT’s through them. It’s always easy / stress free.

(Unlike some AIM stocks but we won’t go there now!)

You just need to work out what you’re investing and check the OFC and go from there.

Someone tell me if I’ve learnt that all wrong?

:face_with_monocle:

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I’m not sure if it’s SIPP specific but they seem to be favouring distribution over accumulation funds. I’d considered buying VWRP in my 212 isa but the tax savings from the SIPP swayed my decision. Just need to remember to do an annual “spring clean” and invest the dividends!

Hey, everyone :wave: , do excuse me for jumping in like that, but I thought you might find this useful.

Any external fees and charges, concerning the instruments on the platform, can be found, if you :

  • Go to our Homepage
  • Select Products, then All instruments
  • Locate the instrument in question
  • Open the KID attached to it on the right

Once you’ve opened the document, you’ll be able to see everything in detail. Hope that helps!

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Both FCA regulated and all that would be my view so should have the same protection if all goes Pete Tong…

@B.E Cheers for the link, but some of the KIIDS are out of date. This one is 5 months:

Sorry to point it out :upside_down_face:

I don’t think there is a simple/easy single repository out there to point the link to that would auto update. Would make things much simpler!

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It’s no different to your dividends received in an etf, they are included into the share price? Surely this is basic stuff for a stand alone investor?

In EU countries, the banks and brokers have the KID/KIID/prospects of the funds (mutual/investment funds, ETFs), ETNs, ETCs, bonds, IPOs, due to legal obligations.

Some banks and brokers have a Morningstar integration in their platform, also to provide the legal documentation. That why I also suggested T212 to have a Morningstar integration in their platform.

The companies (stocks) also have expenses during their activity, and people look for financial statements to see if they meet their investment expectations.

People have their own obligations, it’s their money, at least they should do some due diligence, They aren’t mindless persons or little children that must be given all the information they need without any effort.

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It depends if you’re in a distributing ETF or not.

For instance with VUSA etc you get issued quarterly dividends.

Totally agree with you here.

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Surely your fees would be taken from the dividends then? I’ve not come across that but then I don’t have a lot of different etfs as they usually cross paths