Costs associated with ETFs
There are several costs associated with exchange-traded funds (ETFs) that investors should be aware of.
Trading commissions
ETFs can be bought and sold through brokers or trading platforms, often incurring commissions that can vary significantly among brokers and financial advisors. To learn more about fees and commissions applied by Revolut, go to this FAQ in our Help Centre.
Total expense ratio
The total expense ratio (TER) measures the annual operating expenses of an ETF, including management, legal, and administrative fees. It’s expressed as a percentage of the fund’s assets and is deducted from the fund’s returns.
A higher TER means higher costs, which can reduce the fund’s returns over time. The TER includes all costs associated with managing the ETF, which can significantly affect overall returns.
When choosing an ETF, make sure you consider the TER carefully, as it can impact the fund's performance and your investment returns.
Taxes
ETFs are subject to taxes on dividends and capital gains. The tax liability depends on the investor’s tax bracket and the holding period of the ETF.
It’s important to consider these costs, as they can impact the overall returns of your investment in ETFs.
RSEUAB does not provide investment, financial, legal, tax or regulatory advice or any other form of recommendation in respect of its execution-only service. For personalised advice, seek professional and independent guidance.