Exchange Traded Funds

Exchange Traded Funds, or ETFs, are pooled funds that are traded on the stock exchanges around the world in exactly the same way as stocks and shares. They are neither Unit Trusts nor Investment Trusts, but are a new type of investment which were first traded in the US in 1993 and launched in the UK in late 2000.

Each fund is set up to track the performance of an index or sector by buying all the underlying stocks in proportion to their weighting. Effectively, each ETF is combining the performance of the traditional tracker funds with the flexibility of ordinary shares.

Key benefits to Exchange Traded Funds with Bank of Scotland Share Dealing

• Deal online or over the telephone - access your account online 24/7, 365 days a year or by telephoning our UK based call centre (lines are open 8am - 9.15pm Monday to Friday and 9am-1pm Saturday excluding English Bank Holidays).
• Highly competitive dealing charges - deal online for only £11.95 (excluding international deals) or over the telephone from £15.
• Deal in sterling - ETFs are denominated in the currency of the home exchange, however all deals are converted into sterling using the latest Foreign Exchange (FX) rate for your convenience.
• No stamp duty to pay on ETFs - the fund managers have already paid duty when buying the underlying shares.
• Reduced exposure to the risks associated with trading single shares.
• Straightforward access to the performance of key indices and sectors.
• Low annual management costs compared to other pooled investments - these costs are already built into the fund price therefore there are no additional charges.
• Continuous pricing throughout the day to closely reflect the share price performance of the underlying investments - giving flexibility in the timing of purchases and sales.

More information about ETFs can be found on the following websites:

www.londonstockexchange.com/etfs (opens new window) www.ishares.net (opens new window)
www.etfsecurities.com (opens new window)