Ishare and ETA

rashik_2

I was looking into buying funds on my ISA but many ISA providers say they only trade in ishares or ETA(http://www.etfguide.com/). I have been reading on ishares and ETA which are really the same but do not know much about the risks etc… is there anything I should be aware before I start diving into ishares\ETAs?

cheerfulcat

Hi, rashik,

I don't understand; most ISA providers - at least, amongst brokers - let you purchase funds within the wrapper. Squaregain ( formerly comdirect ) offers the iPlan ISA, which is ETF-only; is that what you're thinking of?

EdInvestor

Hi rashik

An ishare/ETF is like an index tracker fund but in the form of a quoted share - you buy and sell it like a company share.It's a bit cheaper than an index tracker in a fund ( maybe a charge of 0.3% versus 0.5% or more).Some brokers allow you to buy and sell ishares/ETFs free in an ISA. They don't normally attract stamp duty which is another advantage

The risk is the same as with an index-tracking fund.

byrnedj

hi,

as an addition, ishares are also tradeable shares in their own right, so may be more expensive than the underlying Net Asset Value of the fund itself.

SO check you are not overpaying before you purchase an ETF which should trade at NAV.