Exchange-Traded Funds (ETFs) are investment funds that are traded on stock exchanges, much like individual stocks. These funds are designed to track the performance of a specific index, commodity, bond, or a basket of assets, providing investors with a way to gain exposure to a diversified portfolio without having to buy each individual security separately.
Are there any additional fees for investing in ETFs?
Yes, ETFs come with some fees, but they are generally lower than other investment options.
The main cost is the expense ratio, a small annual fee (a percentage of your investment) that covers the fund’s management and operating expenses.
Before investing, check the fund’s prospectus to understand all potential fees and how they might impact your returns.
What is the risk/reward scale?
Vanguard offers a variety of Exchange-Traded Funds (ETFs), and each ETF may have its own risk/reward profile based on its investment objective and underlying assets. Risk and reward can vary significantly among different ETFs so please carefully review the fund's prospectus before investing.
What is the gross expense ratio?
The expense ratio is the most common fee associated with ETFs. It represents the annual cost of managing the fund and is expressed as a percentage of the fund's average net assets. This fee covers the fund's operating expenses, including management fees, administrative costs, and other operational expenses. ETFs are known for having relatively low expense ratios, especially when compared to actively managed mutual funds.
Why are you only offering Vanguard ETF?
Vanguard is widely regarded for its low-cost index funds and ETFs, and it has been a pioneer in promoting a passive investment approach. Vanguard offers low expense ratios, broad market exposure and passive investment strategies. Vanguard has a long and reputable track record in the investment industry. Vanguard's investment philosophy aligns with the belief that, over the long term, low-cost, broad market exposure can lead to favourable investment outcomes.
What is the tax impact of selling ETFs?
It is your responsibility to report and pay any taxes on capital gains from your investments, which includes profits made from selling the ETF for more than you bought it. The same goes for withholding tax, which is levied on dividend issuance. Your local tax rules will determine the applicable tax rate for both.
To help you with this reporting, we provide relevant trading statements in the 'Wealth Statements' section of the app.
*Capital at risk. This information is not investment advice. Security values can go up as well as down. Past performance is not indicative of future results. *This is not tax advice. You have sole responsibility for complying with any and all applicable laws, rules and regulations relating to the management of your tax affairs, and to collect, report and pay the correct tax to the appropriate tax authority. You shall take your own tax advice to ensure our services are suitable for you. We will not provide you with that advice nor will we be responsible for the execution of tax obligations, or calculations and transfer of taxes applied to you.
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