Fidelity capped charge of £45 on ETFs

Ed-1

Fidelity charge a service fee for investing on their platform. However they say "for Investment Trusts and ETPs (ETFs) you will pay the percentage rate service fee as detailed above, however this will be capped at £45 no matter how much you hold in these investments."

https://www.fidelity.co.uk/investor/funds/fund-charges/no-hidden-charges.page

Is this charge capped at £45 across all ETFs invested in or per ETF?

simonfitba

Across all ETFs.

caveman8006

But NB Hargreaves Lansdowne offer a similar fee structure for ITs and ETFs (capped at £45 in their ISA or £200 in their SIPP) with rather better web tools and funds choice

Ed-1

Say you've got £100k in a SIPP.

Would it be worth putting it all in ETFs to save on charges?

simonfitba

Yes. That's what I do.

chucknorris

simonfitba wrote: »

Yes. That's what I do.

Me too (additional words).

Ed-1

In terms of investments are ETFs any worse/riskier than other funds?

EdGasketTheSecond

No, just lower cost.

bigadaj

EdGasketTheSecond wrote: »

No, just lower cost.

Not quite accurate.

In many instances there is little difference but they would be considered more complicated or sophisticated investments than unit trusts or oeics.

There are issues around synthetic etfs, replication and counter party risk.

Also depending on your platform there are often trading charges which can be a consideration.

jamesd

Ed-1 wrote: »

In terms of investments are ETFs any worse/riskier than other funds?

Yes, clearly so, though you can select to avoid some of the effects.

With an OEIC there is a single dealing price once a day and a narrow window between the value of the investments and the price paid or received. There are generally very strict caps on leverage and derivatives.

With an ETF there will be different buy and sell prices so you'll normally lose a bit when investing and exiting, not normally too painful for longer holding times.

There are ETFs that really, at least mostly, hold what they might say they are tracking, commonly called physical replication. Others might hold say Japanese corporate bonds and replicate the performance of say the FTSE100 with derivatives contracts, not having even a penny owning any actual UK shares.

The flexibility can be useful provided you understand the differences. For example I've recently sold a mixture of global or global developed market tracker funds and ETFs to buy an alternative which is hedged against changes in the value of the pound but still does an optimised form of physical share owning. It's more expensive in its charges than what I held, cheaper on platform charge, more epensive in dealing cost but delivers what I was looking for, the chance to avoid losses if the pound rises, while sacrificing gains if it falls.

Then there are the differences between active and passive management to consider, and the extent to which a passive tracker might be doing active selection for say stock lending, index provider or various types of tracking besides the traditional (market) cap(italisation) weighting.

If you want what the ETF is made up of and you will save money after allowing for its costs, which might be higher than the cheapest available fund, platform charge and dealing charges then yes, it could save you money. But do compare to the cheapest comparable fund and shop around for alternative ETFs because prices do differ.