How to evaluate the real cost of ETFs

ETFs

There is more to assessing the cost of exchange traded funds than simply looking at the headline total expense ratio. David Bower, head of UK iShares, reveals what you need to consider.

Cost is an important consideration when making any kind of investment. ETFs have become increasingly popular due to cost efficiency which enables investors to implement their investment views as well as to gain exposure to a very broad range of asset classes.  Investors often ask how exactly they should assess the total cost of buying, holding and selling an ETF. Assessing the cost of an ETF requires investors to look beyond the headline total expense ratio (TER) and take an approach we call Total Cost of Ownership (TCO). While the TER is the most often quoted ETF expense, investors ou...