Some Basic ETF Questions Please

[sallyjc]

Hi

I want to trade FTSE and Dow indices using ETFs in a Stocks and Shares ISA.

I opened the ISA and was greeted with what seems like hundreds of ETFs and I'm having trouble sorting through them all.

What I really want is an ETF with the smallest charge. My investments will be small, i,e. starting at £15k and then rising each year as I fund the ISA - so liquidity won't be an issue!

Can some one tell me the cheapest ETFs for trading the FTSE and Dow both long and short. Could someone please also recommend 2x and 3x leveraged ETF varieties as well?

Also, say an ETF charges 0.5% p.a. If I only hold the ETF for 6 months do I pay 0.25% or the full amount?

Thank you for the advice.

Sally

 

[f2calv]

I actively trade leveraged ETFs inside my ISA - it's more lucrative than trading shares which have [in my limited experience] a habit of gapping up/down by 20% just after I buy

I use the following two FTSE ETFs (via hl.co.uk and iii.co.uk);

- Boost Issuer plc FTSE 100 Ultra Short Strategy 3X Daily (3UKS)
http://www.hl.co.uk/shares/shares-search-results/b/boost-issuer-plc-ftse-100-ultra-short-strat

- Boost Issuer plc FTSE 100 Super Leveraged 3X Daily (3UKL)
http://www.hl.co.uk/shares/shares-search-results/b/boost-issuer-plc-ftse-100-super-leveraged

I have basically found the daily charges negligible and I usually hold the positions for 2 days to 2 weeks - I would guesstimate that you would rarely hold the ETF for longer than that.

Sorry don't do any DOW ETF trades, but a simple google will find you some suitable instruments.

NB: If you plan on holding for longer term and want the whole tax-free approach a simple longer term spreadbet at £2/point will have the same effect as an ETF yet give you the ability to get in/out of the market faster and guaranteed stops can help you avoid unexpected drawdown from China-related issues!

 

[Erasmus]

For the providers, ETFs are a scale game so you'll find the largest companies usually have the lowest costs: that's Vanguard and iShares. Proshares are usually good for levered ETFs. Just bear in mind that for a long run holder, the levered (long or short) ETFs often don't give the result you might expect as the NAV is reset each day, so you don't get the full cumulative effect of a rising/falling market. The Proshares website explains this in more detail.

The website ETFdb.com is the best I've come across for choosing the right ETF and lets you sort, for example, by cost/expense ratios.

The costs are deducted from the NAV on a daily basis, so yes, if you hold the ETF for 6 months you'll pay half the annual charge.

 

[Don17]

Hi all some good info here. I've been trading the UK and German ETFs, but noticed over the last week there's been a divergence in the Boost LevDax 3x (3LDE) ETF.

It doesn't seem to be tracking the DAX at all, whereas in the past it always has. Any ideas why this could be the case?