Exchange Traded Funds, an alternative way to invest.

tradetime

ozzage wrote: »

Thanks tigger and tradetime. I'd never heard anything about this - where is the actual restriction? ie who is applying it? Don't have a link to more info do you - I had a quick Google but couldn't see anything obvious.

Guidance notes are here.
http://www.hmrc.gov.uk/ISA/isa-guidance-notes-2008.pdf
I couldn't really make a great deal of sense out of this on a quick read (need to sit down with it) But I did phone HMRC, the bloke I spoke to didn't really understand it either but read a section verbatim from somewhere from which he concluded that it was unlikely many ETF's registered in the US or UK would be elegible, but then said he didn't really understand what it meant, I gave up at that point. Barclays Global figured that their Dublin based funds were eligible, but their US registered funds were not, but didn't really know why, save for the fact that they are registered in the US, On the other hand iii say a number of them are

As a classic example going on from your Russel funds iShares have two trackers for the S&P500, one registered in Dublin and trades on the LSE, and one registered in the US and trades on the NYSE, they are more or less identical, and are structured in the same way, according to Barclays the Dublin one is eligible the NYSE one is not, it was when I pointed this out, that they admitted they did not actually know why the US ones would not be eligible. My suspicion is that since Barclays were trying to grow product offerings in the UK, it is actually in their interest to discourage UK investors from simply using the more liquid US funds, that imho covers their position, but I am at a loss why so much confusion should reign amongst others.

ozzage

ahh OK this is all ISA-related.

But I'm not trying to buy them for an ISA Just through a normal share dealing account.

tradetime

ozzage wrote: »

ahh OK this is all ISA-related.

But I'm not trying to buy them for an ISA Just through a normal share dealing account.

Ah sorry dude, my bad. However that makes things much easier, I can explain your problem for you
Your problem is simply limited to the competency of your chosen broker, nothing more, nothing less, and don't accept any other explanation from them.

mr_fishbulb

ozzage wrote: »

ahh OK this is all ISA-related.

But I'm not trying to buy them for an ISA Just through a normal share dealing account.

You don't need to hold ETFs in an ISA.

I bought and sold etfs though Selftrade

tradetime

Incidentally, who is your broker?

ozzage

mr_fishbulb wrote: »

You don't need to hold ETFs in an ISA.

I bought and sold etfs though Selftrade

Indeed I'm not trying to. I'm just buying them through my normal Halifax account (to answer Tradetime's q at the same time)

They're all in bed with each other anyway (or at least with III)

tradetime

I'm just buying them through my normal Halifax account (to answer Tradetime's q at the same time)

They're all in bed with each other anyway (or at least with III)

Oh, that's a bad thing :mad: since I have just applied to open an ISA with them, iii that is.
It is my contention from what I have seen, that UK brokers are pretty poor, in the main.

tradetime

ozzage wrote: »

As another example of how arbitrary this all seems, here are two ETFs available through ETF Securities:

RONE - tracks the Russell 1000 index
RTWO - tracks the Russell 2000 index

They are both in USD and were launched at the same time as a "matching pair". RONE is tradable through my Halifax account, but RTWO is not!

This is so random that surely it's related to manual action somehow. I can't see any reason why any automatic system would block one but not the other, when they are effectively identical.

Btw, if you are trying to trade the Russel 2000 and are willing to buy in USD see if they have access to IWM trades on the NYSE

ozzage

Thanks yes I can trade that, it seems. Actually I've always been a bit hesitant to buy US shares/ETFs directly, but I might try to broaden my mind...

For US smallcap exposure I've actually already gone with the iShares S&P Smallcap 600 ETF.

tradetime

ozzage wrote: »

Thanks yes I can trade that, it seems. Actually I've always been a bit hesitant to buy US shares/ETFs directly, but I might try to broaden my mind...

For US smallcap exposure I've actually already gone with the iShares S&P Smallcap 600 ETF.

They're nothing to worry about, particularly if you are already prepared to buy in USD denominated issues, as you have already considered any currency implications, that one is likely much more liquid than the ETFS offering with an average volume of 74 mill and a 1c spread.