Investing from the UK

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Investing from the UK is written for UK tax-resident investors. It suggests some approaches and funds that you can use to invest in a similar way to that outlined in the Bogleheads' Guide To Investing.[note 1] The book contains sample US portfolios for investors of different ages, and which use different stock market and bond mutual funds, most or all of which are unavailable to UK investors. This article offers ideas for how you can create UK versions of these sample portfolios.

This article is not intended for 'US taxable persons'.[note 2] This includes US citizens in the UK, even if they are also UK (or any other non-US) citizens, for example dual UK/US citizens and 'accidental Americans'. It also includes US 'green card' holders, even if the card has expired for immigration purposes. If you are subject to US tax laws you should not follow the suggested approaches shown below, but should instead see the article specific to your situation.[note 3]

Paternoster Square, home of the London Stock Exchange

General approach

The funds listed below are low cost indexed funds. In the UK these can be unit trusts, Open-Ended Investment Companies (OEICS), or Exchange Traded Funds (ETFs). Although most UK investing is through platforms, a few UK based companies offer low cost indexed unit trusts directly as well as through platforms. Vanguard, HSBC Asset Management, Fidelity, and Legal and General all offer funds with low expense ratios. Vanguard's UK web site offers Vanguard UK funds directly, as do many IFAs and most investment platforms. There are few indexed bond funds, but iShares and Vanguard both offer bond ETFs. Investment platforms may have a fee for fund transactions.

For investors, unit trusts and OEICs work identically. Both are broadly categorised as "funds' to distinguish them from ETFs.[note 4] Over time, many unit trusts have converted to the newer OEIC legal structure.[1] Some investment platforms charge more for funds than for ETFs but offer free fund trading; others charge the same, but have a fund trading fee.

You can only purchase ETFs through a broker or investment platform, and there is usually a per transaction cost. However, there can be a useful saving in trading costs where a platform offers a regular purchase feature.[note 5]

You can find full fund and ETF details, including factsheets and annual reports, at sites such as Morningstar, Financial Times Funds, and Trustnet.

Funds and ETFs

The following are some examples of low cost indexed funds and ETFs, but you should not regard these lists as complete.

UK funds usually use the term ongoing charge, often abbreviated to OCF, to mean the fund's expense ratio. The links to funds below generally reference income or distributing share classes, but for most funds, and some ETFs, accumulation share classes will also be available (see the Taxes section for more).[note 6] Any fund that describes itself as a tracker is simply one that tracks a given index (an 'index fund', in other words).

Stocks

To be properly diversified, you could pair UK FTSE 100 or FTSE 250 indexed funds with a world indexed fund or a selection of regional non-UK funds. UK stocks are a component of most world funds, and this creates an overlap if combined with UK funds. An ex-UK world fund can reduce this problem.

UK stock indexes

This section suggests funds that cover the entire UK stock market to maximise diversification. If you want more fine-grained choices, see the Advanced funds section.

UK stock indexes
Fund Type Ongoing charge Description
Vanguard FTSE U.K. All Share Index Fund Fund 0.06% The Vanguard FTSE U.K. Equity Index Fund (the “Fund”) seeks to track the performance of the FTSE All-Share Index (the “Index”).
HSBC FTSE All Share Index Income C Fund 0.13% The objective of this fund is to provide long term capital growth by matching the capital performance of the FTSE All-Share Index. The Fund will invest in companies that make up the FTSE All-Share Index.
Fidelity Index UK P GBP Fund 0.06% The Fund’s investment objective is to achieve long term capital growth by closely matching the performance of the FT-SE Actuaries All-Share Index. The ACD will aim to hold securities that represent the FT-SE Actuaries All-Share Index (or, in the event of this index ceasing to be compiled, such other index as the ACD may deem appropriate). In order to manage the cash position of the portfolio, the ACD may utilise stock index futures as allowed by the regulations.

Ex-UK and global indexes

These funds cover wider stock markets. Global indexes cover the world's markets, including a UK component. Ex-UK funds cover stock markets except for the UK, and are useful for combining with UK index funds to achieve your own choice of home bias.

World ex-UK indexes
Fund Type Ongoing charge Description
Vanguard FTSE Developed World ex-U.K. Equity Index Fund Fund 0.14% The Vanguard FTSE Developed World ex-UK Equity Index Fund (the “Fund”) seeks to track the performance of the FTSE Developed ex-UK Index (the “Index”).
Legal & General International Index Trust Fund 0.08% The objective of the Fund is to track the capital performance of global equity markets, as represented by the FTSE World (ex UK) Index, by investment mainly in a representative sample of stocks selected from all economic sectors. Exposure to securities in the FTSE World (ex UK) Index will be held with weightings generally proportionate to each company’s market capitalisation
World stock indexes
Fund Type Ongoing charge Description
Vanguard FTSE All-World ETF (GBP) VWRL ETF 0.22% This Fund seeks to provide long-term growth of capital by tracking the performance of the FTSE All-World Index, a market-capitalisation weighted index of common stocks of large and mid cap companies in developed and emerging countries. An accumulation version of this ETF also exists (ticker: VWRA)
Vanguard FTSE Global All Cap Index Fund Fund 0.23% The Vanguard FTSE Global All Cap Index Fund (the “Fund”) seeks to track the performance of the FTSE Global All Cap Index (the “Index”). The Index is a market-capitalisation weighted index representing the performance of large, mid and small cap stocks covering developed and emerging markets around the world.
HSBC FTSE All-World Index Fund Accumulation C Fund 0.13% The Fund aims to provide growth over the long term, which is a period of five years or more, by tracking the performance of the FTSE All-World Index (the “Index”)

Developed world indices track about 85% of the world's market by excluding emerging markets. This makes them cheaper funds than a full world tracker.

Developed world stock indexes
Fund Type Ongoing charge Description
Fidelity Index World Fund P GBP Fund 0.12% The Fund’s investment objective is to achieve long term capital growth by closely matching the performance of the MSCI World Index

UK bonds

Some UK investors prefer bond funds that are denominated in pound sterling. 'Gilts' refers to bonds issues by the UK government. UK government bonds that provide inflation-linked returns are 'index linked gilts'. Non-government bonds are usually called 'corporate bonds'.

Intermediate term bond funds
Fund Type Ongoing charge Description
Vanguard U.K. Government Bond ETF (GBP) VGOV ETF 0.07% The investment seeks to replicate, net of expense, the Barclays Capital Global Aggregate UK Government Float Adjusted Bond TR GBP Index.
Vanguard U.K. Government Bd Idx GBP Inc Fund 0.12% The fund seeks to provide returns consistent with the performance of the Barclays Capital Global Aggregate U.K. Government Bond Index, a market-weighted index of the U.K. Government fixed-income securities denominated in Pound Sterling.
iShares Pound Sterling Corporate Bond ETF 0.2% The investment objective of the Fund is to provide investors with a total return, taking into account both capital and income returns, which reflects the total return of the Sterling denominated investment grade corporate bond market. The fund tracks the iBoxx Sterling Liquid Corporates Index.
iShares Core UK Gilts UCITS ETF GBP ETF 0.07% The investment objective of this Fund is to provide investors with a total return, taking into account both capital and income returns, which reflects the return of the FTSE Actuaries UK Conventional Gilts All Stocks Index.
Legal & General All Stocks Gilt Index Trust I Class Fund 0.15% The investment objective of this Trust is to track the total return of UK Government Securities, as represented by the FTSE Actuaries Government Securities All Stocks Index after adjustment for management charges and taxation, by investment in a representative sample of stocks. Use may be made of optimisation techniques to construct and maintain a portfolio, the underlying value of which exhibits the performance characteristics of the Index.
Inflation protected bonds
Fund Type Ongoing charge Description
Vanguard U.K. Inflation-Linked Gilt Index Inc Fund 0.12% The Vanguard U.K. Inflation-Linked Gilt Index Fund (the "Fund") seeks to track the performance of the Barclays Capital U.K. Government Inflation-Linked Float Adjusted Bond Index.
Legal & General All Stocks Index Linked Gilt Index Trust I Class Fund 0.15% The investment objective of this Trust is to track the performance of the FTSE-A Index Linked (All Stocks) index after adjustment for management charge and taxation. The Manager will seek to achieve this objective by investing primarily in government or other public securities issued by the government of the United Kingdom.
iShares Barclays Cap GBP Indx-Lnkd Gilts (INXG) ETF 0.10% The investment is a fixed income fund that offers exposure to a diversified basket of UK government bonds, with all maturities. It can be used to offset the inflation risk in a portfolio. The investment provides access to the performance of Barclays UK Government Inflation-Linked Bond Index.

Global bonds

Vanguard recommends using global bond funds that hedge to local currency, in this case, pound sterling (GBP).[2] This choice maximises diversification of bond exposure, and helps to reduce fluctuation caused by currency movements.

Global bonds
Fund Type Ongoing charge Description
Vanguard Global Bond Index Fund - Hedged Income (GBP) Fund 0.15% The Fund seeks to provide returns consistent with the performance of the Index.
iShares Global Aggregate Bond UCITS ETF GBP Hedged (Dist) - AGBP ETF 0.10% The investment objective of the Fund is to provide investors with a total return, taking into account both capital and income returns, which reflects the return of the Bloomberg Barclays Global Aggregate Bond Index.
Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Income - VAGP ETF 0.10% The Fund seeks to track the performance of the Bloomberg Barclays Global Aggregate Float Adjusted and Scaled Index Hedged. The Index includes investment-grade and government bonds from around the world with maturities greater than one year. NOTE: This is a new fund so AUM compared to AGBP is presently quite low, which may affect liquidity

All-in-one funds

Vanguard offers a range of "LifeStrategy" funds that automatically rebalance across asset classes. These offer a single fund, but well diversified, portfolio.

All-in-one funds
Fund Type Ongoing charge Description
Vanguard LifeStrategy 20% Equity A Inc Fund 0.22% The Fund’s investment objective is to achieve income and/or capital returns through exposure to a diversified notional portfolio comprised of approximately: 20% by value of equity securities; and 80% by value of fixed income securities.
Vanguard LifeStrategy 40% Equity A Inc Fund 0.22% The Fund’s investment objective is to achieve income and/or capital returns through exposure to a diversified notional portfolio comprised of approximately: 40% by value of equity securities; and 60% by value of fixed income securities.
Vanguard LifeStrategy 60% Equity A Inc Fund 0.22% The Fund’s investment objective is to achieve income and/or capital returns through exposure to a diversified notional portfolio comprised of approximately: 60% by value of equity securities; and 40% by value of fixed income securities.
Vanguard LifeStrategy 80% Equity A Inc Fund 0.22% The Fund’s investment objective is to achieve income and/or capital returns through exposure to a diversified notional portfolio comprised of approximately: 80% by value of equity securities; and 20% by value of fixed income securities.
Vanguard LifeStrategy 100% Equity A Inc Fund 0.22% The Fund’s investment objective is to achieve income and/or capital returns through exposure to a diversified notional portfolio comprised of approximately 100% by value of equity securities.

Sample portfolios

Listed below are UK equivalents to some of the sample asset allocations outlined in the Bogleheads' Guide To Investing. These are appropriate for different stages in life. "Home country bias" describes some investors' preference for investing in local markets over non-local ones.

A young investor's asset allocation
Asset class Global market cap With "Home country bias"
UK Stocks 20%
World ex-UK Stocks 60%
All-World (including UK) Stocks 80%
Intermediate Term Bonds 20%
A middle-aged investor's asset allocation
Asset class Global market cap With "Home country bias"
UK Stocks 15%
World ex-UK Stocks 45%
All-World (including UK) Stocks 60%
Intermediate Term Bonds 20%
Inflation Protected Securities 20%
An investor in early retirement's asset allocation
Asset class Global market cap With "Home country bias"
UK Stocks 10%
World ex-UK Stocks 30%
All-World (including UK) Stocks 40%
Intermediate Term Bonds 30%
Inflation Protected Securities 30%
An investor in late retirement's asset allocation
Asset class Global market cap With "Home country bias"
UK Stocks 5%
World ex-UK Stocks 15%
All-World (including UK) Stocks 20%
Intermediate Term Bonds 40%
Inflation Protected Securities 40%

Implementation

You can use the low cost funds and ETFs listed earlier to create a portfolio that matches your selected asset allocation. If a portfolio uses a world fund or ETF that includes UK stocks (one that is not ex-UK) there will be some overlap in the funds, and you need to slightly adjust the allocations to each fund to compensate. The UK accounts for around 5% of the MSCI World Index.

You can also 'synthesize' a global fund by combining appropriate regional funds. For example, mixing 66% US fund, 18% Europe ex-UK fund, 9% Japan fund, and 7% Far East ex-Japan fund approximates a World ex-UK fund. This combination sometimes has an expense ratio lower than that of the global fund it replaces.

If a "LifeStrategy" fund has an asset allocation that is close to your selected asset location, you could use a single "LifeStrategy" fund, or a combination of these funds, instead of multiple funds covering different asset classes. These funds have the added advantage that they rebalance automatically.

A brokerage account or fund platform is often the simplest way for you to easily purchase and hold unit trusts and ETFs. A discount brokerage (sometimes also known as an execution-only stockbroker) is a good choice, and there are several low-cost and online discount brokerages operating in the UK. Vanguard, Hargreaves Lansdown, AJ Bell, Interactive Investor and Halifax Sharedealing (including its iWeb and Lloyds Sharedealing Direct divisions) are popular ones, and all of these offer extensive ranges of unit trusts, OEICs, and ETFs. For people with international lifestyles, Interactive Brokers (IBKR UK) can be a useful choice.

If you do not mind being restricted to ETFs (that is, no unit trusts or OEICs), you have a wider choice of low cost online brokers. As well as the platforms listed above, InvestEngine, Freetrade, Dodl, Plum, Nutmeg, Degiro, X-O, and Trading212 are all alternative options. Some of these offer free trading, but all of them make money somewhere. Zero-commission brokers usually make money from spreads[note 7] or cross-selling other services.

Neither of the brokerage lists above is exhaustive. Monevator maintains a useful broker comparison table.

Taxes

For the UK, some of the tax management strategies mentioned in the Bogleheads' Guide To Investing and other US literature are irrelevant. UK and EU funds do not pass capital gains on to you, and you are not liable for capital gains tax on unit trusts or ETFs until you sell, so there are no UK 'tax managed' funds.

You have an annual capital gains tax allowance,[3] which means that rebalancing is often possible at no tax cost, even if some gains have no offsetting losses. You can set capital losses against capital gains but not against ordinary income tax, so you get no special advantage from tax loss harvesting. Your cannot carry your capital gains allowance across tax years, so you should try to use as much of it as is possible, up to the limit, by realizing gains where appropriate. Once you have realised a gain on a sale, you cannot repurchase the same holding within 30 days,[4] but you can purchase a similar (but not identical) replacement.

You do not need to closely consider timing unit trust or OEIC purchases around ex-dividend dates. Where you hold fund units for less than the dividend period, some of the next dividend paid is classified as an 'equalisation'. This is a return of capital, and you are not liable for tax on this portion of the dividend.[5]

Most unit trusts and OEICs and some ETFs provide two distinct types of units or classes of share: accumulation (or accumulating), and income or distributing. Accumulation units or shares retain dividend distributions within the unit price, in effect automatically reinvesting them. Income and distributing units or shares pay out dividends as cash.[note 8] The tax treatment of both paid and accumulated dividends is identical for a UK investor.[4]

As a general rule, you might prefer income units or shares in ordinary taxable accounts, so that dividends can be used for rebalancing without the complicated capital gains tax calculations that arise from sales, and also avoid potential cash-flow problems where tax becomes due on accumulated (but not yet received) dividends. Accumulation units or shares are most useful for long-term holdings in a pension or ISA wrapper, where capital gains tax is not a problem.

If you hold hold ETFs or non-UK domiciled unit trusts or OEICs outside of tax-sheltered wrappers, you need to be aware of the potential for "Excess Reportable Income" (ERI).[6] This is undistributed income that is nevertheless deemed to be UK taxable. Amounts are often, but not always, relatively small, and sometimes difficult to uncover.[note 9] ERI is not a problem in a pension or ISA wrapper.

Outside tax-sheltered wrappers, dividends paid by Ireland and other non-UK domiciled UCITS funds and ETFs are classified as foreign dividends. This can lead to a difference in the way you handle these dividends for tax reporting, although generally no difference to your final and actual tax liability.

Pension and ISA wrappers

The portfolios outlined above, and the example funds and ETFs listed, work equally well both for ordinary and for tax advantaged investments. Tax advantaged investments in the UK are, most commonly, pensions (including both employer and UK personal pensions) and UK Individual Savings Accounts (ISAs).

For ISAs, you can hold funds or ETFs inside a self-select ISA wrapper. Almost all discount brokerages or fund platforms offer these wrappers, and they usually operate like a normal trading account with a few added features and limitations (for example, a limit on the total amount that can be contributed in a single year, in line with annual ISA allowances).

For pension savings, a you can hold funds or ETFs inside a Self Invested Personal Pension (SIPP) wrapper. Many of the usual discount brokerages offering trading and ISA accounts also offer SIPP accounts, and though there may be a few extra restrictions on what investments you can hold, SIPP wrappers generally operate like both ordinary trading accounts and ISA wrappers.

For account balances where a SIPP is impractical, you might instead use a personal pension scheme or a stakeholder pension scheme. These usually offer a limited range of funds, and have capped fee structures. These pensions are generally not as flexible as a SIPP, but can be cost effective for low balances when weighed against annual SIPP administration fees. The funds listed above may not be available directly from these plans, but you can usually find perfectly acceptable substitute index and tracker funds in them.

Fidelity, Hargreaves Lansdown, AJ Bell, Interactive Investor, and Halifax Sharedealing (including its iWeb division) all offer both offer ISA and SIPP wrappers. Vanguard also offers ISA and SIPP wrappers, but unlike other platforms, it restricts investment choices to only Vanguard's own funds and ETFs. Lloyds Sharedealing Direct offers ISA wrappers but not SIPPs.

Interactive Brokers (IBKR UK) offers both SIPP accounts and ISA accounts.

Advanced funds and ETFs

If you are looking for more fine-grained control over your investments, beyond the suggested three or four fund portfolios, this list may be useful. (It is not well maintained, so it may be better to research separately at other websites.)

The UK stock market splits broadly into the large-cap FTSE 100 Index and mid-cap FTSE 250 Index. It is significantly smaller than the US and not as diversified. For example, three companies (Shell, BP and HSBC) comprise nearly 25% of the FTSE 100 Index.

UK stock indexes
Fund Type Ongoing charge Description
Vanguard FTSE 100 ETF (GBP) VUKE ETF 0.09% The investment seeks to replicate, net of expenses, the FTSE 100 TR GBP Index.
Vanguard FTSE 250 UCITS ETF (GBP) VMID ETF 0.1% The investment seeks to replicate, net of expenses, the FTSE 250 TR GBP Index.
HSBC FTSE 100 Index Fund Income C Fund 0.18% To provide long term capital growth by matching the return of the FTSE 100 Index. The Fund will invest in companies that make up the FTSE 100 Index.
HSBC FTSE 250 Index Income C Fund 0.39% The investment objective of the HSBC FTSE 250 Index Fund is to match the capital performance of the FTSE 250 Index.
HSBC FTSE 100 ETF (GBP) HUKX ETF 0.07% The investment seeks to track the price and yield performance, before fees and expense, of the FTSE 100 index.
iShares FTSE 100 ETF 0.07% The investment seeks to replicate, net of expenses, the FTSE 100 Index. The index is comprised of the 100 largest UK companies.
Non-UK regional stock indexes
Fund Type Ongoing charge Description
Vanguard S&P 500 ETF (GBP) VUSA ETF 0.07% The investment seeks to replicate, net of expenses, the S&P 500 TR USD Index.
HSBC S&P 500 ETF (GBP) HSPX ETF 0.09% The investment seeks to track the price and yield performance, before fees and expense, of the S&P 500 index.
Vanguard U.S. Equity Index Fund Fund 0.1% The Vanguard U.S. Equity Index Fund (the “Fund”) seeks to track the performance of the S&P Total Market Index (the “Index”).
Vanguard FTSE Developed Europe ex-U.K. Equity Index Fund Fund 0.12% The Vanguard FTSE Developed Europe ex-UK Equity Index Fund (the “Fund”) seeks to track the performance of the FTSE Developed Europe ex-UK Index (the “Index”).
HSBC American Index Fund Income C Fund 0.06% The investment objective of the Fund is to match, by use if a representative sample of stocks, the capital performance of the American Index (Standard & Poors 500).
HSBC MSCI Europe ETF (GBP) HMEU ETF 0.1% The investment seeks to track the price and yield performance, before fees and expense, of the MSCI Europe index.
HSBC Japan Index Fund Income C Fund 0.13% The fund's investment objective is to provide long term capital growth by matching the capital performance of the FTSE World Japan Index.
Vanguard Japan Stock Indx GBP Inc Fund 0.16% The Fund seeks to track the performance of the Morgan Stanley Capital International ("MSCI") Japan Index, which emphasises stocks of Companies located in or traded on recognised markets in Japan.
Vanguard Pacific Ex-Jap Stk Idx GBP Inc Fund 0.16% The Fund seeks to provide long-term growth of capital by tracking the performance of the Morgan Stanley Capital International ("MSCI") Pacific ex-Japan Index, which is made up of common stocks of companies located in Australia, Hong Kong, New Zealand, and Singapore.
HSBC European Index Fund Income C Fund 0.06% The investment objective of this fund is to provide long term capital growth by matching the capital performance of the FTSE World Europe (excluding UK) Index.
HSBC Pacific Index Fund Income C Fund 0.16% The objective of this fund is to provide long term capital growth by matching the capital performance of the FTSE World Pacific (excluding Japan) Index.
Vanguard FTSE Emerging Markets ETF (GBP) VFEM ETF 0.22% The investment seeks to replicate, net of expenses, the FTSE Emerging TR USD Index.
iShares Core MSCI Emerging Markets EIMI ETF 0.18% The investment objective of the Fund is to provide investors with a total return, taking into account both capital and income returns, which reflects the return of the MSCI Emerging Markets Investable Market Index (IMI).
Fidelity Index US Fund P GBP Fund 0.06% The Fund’s investment objective is to achieve long term capital growth by closely matching the performance of the S&P 500 index. The ACD will aim to hold securities that represent the S&P 500 index (or in the event of this index ceasing to be compiled such index as the ACD may deem appropriate). In order to manage the cash position of the portfolio, the ACD may utilise stock index futures as allowed by the regulations.
Fidelity Index Europe ex UK P GBP Fund 0.1% The Fund’s investment objective is to achieve long term capital growth by closely matching the performance of the MSCI Europe ex UK Index. The ACD will aim to hold securities that represent the MSCI Europe ex UK Index (or in the event of this index ceasing to be compiled such index as the ACD may deem appropriate). In order to manage the cash position of the portfolio, the ACD may utilise stock index futures as allowed by the regulations.
Fidelity Index Japan P GBP Fund 0.1% The Fund’s investment objective is to achieve long term capital growth by closely matching the performance of the MSCI Japan Index. The ACD will aim to hold securities that represent the MSCI Japan Index (or in the event of this index ceasing to be compiled such index as the ACD may deem appropriate). In order to manage the cash position of the portfolio, the ACD may utilise stock index futures as allowed by the regulations.
Fidelity Index Pacific ex Japan Fund P Fund 0.13% The Fund’s investment objective is to achieve long term capital growth by closely matching the performance of the MSCI Pacific ex Japan Index. The ACD will aim to hold securities that represent the MSCI Pacific ex Japan Index (or in the event of this index ceasing to be compiled such index as the ACD may deem appropriate). In order to manage the cash position of the portfolio, the ACD may utilise stock index futures as allowed by the regulations.
Fidelity Index Emerging Markets P Fund 0.2% The Fund’s investment objective is to achieve long term capital growth by closely matching the performance of the MSCI Emerging Markets Index. The ACD will aim to hold securities that represent the MSCI Emerging Markets Index (or in the event of this index ceasing to be compiled such index as the ACD may deem appropriate). In order to manage the cash position of the portfolio, the ACD may utilise stock index futures as allowed by the regulations.
Short term bond funds
Fund Type Ongoing charge Description
iShares UK Gilts 0-5yr UCITS ETF GBP (Dist) IGLS ETF 0.07% The fund is an exchange traded fund (ETF) that aims to track the performance of the FTSE UK Conventional Gilts - Up To 5 Years Index as closely as possible. The ETF invests in physical index securities. The FTSE UK Conventional Gilts - Up To 5 Years Index offers exposure to Sterling denominated UK government bonds (conventional gilts) quoted on the London Stock Exchange, with outstanding term of up to five years, other than index-linked bonds.
iShares £ Corp Bond 0-5yr UCITS ETF GBP (Dist) IS15 ETF 0.2% The Fund seeks to track the performance of the Markit iBoxx GBP Corporates 0-5 Index composed of Sterling denominated investment grade corporate bonds.

Notes

  1. In the UK, the term passive investing commonly refers to index fund investing.
  2. US citizens and green card holders resident in the UK should use HMRC reporting funds, where possible. For more, see: US domiciled ETFs that are UK HMRC reporting funds‎, and Offshore funds: list of reporting funds.
  3. See also Bogleheads forum topic: "New wiki page, for US persons in the UK", Bogleheads forum topic: "How to invest my British pound salary", and Bogleheads forum topic: "US funds with HMRC reporting/distributing status". If you are unsure, please ask for guidance in the forum.
  4. UK brokers and platforms commonly refer to both unit trusts and OEICs as "funds", and distinct from ETFs, but this is a confused terminology. In reality all three are funds. This distinction becomes important where a broker or platform has a split charging policy, with different charges for "funds" (that is, unit trusts and OEICs), and shares, usually including ETFs. Also, investment research sites often have separate search or listing areas for "funds" and ETFs, meaning you need to either select the appropriate one when researching, or to visit both.
  5. For example, as of 2023, Halifax charges £2.00 per trade for scheduled regular share or ETF purchases.
  6. Fund and ETF names commonly abbreviate the terms income, distributing, and accumulation (or accumulating) to inc, dist, and acc. Income and distributing are the same thing.
  7. For a forum member's report of experience with spreads at InvestEngine, see Bogleheads forum post: "Re: UK newbie questions", pennywiser. August 27, 2023.
  8. For more on accumulation shares, see: Comparison of accumulating ETFs and distributing ETFs. Although this article analyses the case for ETFs, the same is true for unit trusts and OEICs.
  9. For example, see: "For General Account holders: UK Reporting Fund FAQ guide" (PDF). Vanguard. Retrieved January 8, 2023.

References

  1. "Unit trust § OEIC conversion". Wikipedia. Retrieved January 8, 2023.
  2. "Going global with bonds: The benefits of a more global fixed income allocation" (PDF). Vanguard. Retrieved January 8, 2023.
  3. "Capital Gains Tax rates and allowances". HMRC. Retrieved January 8, 2023.
  4. 4.0 4.1 "HS284 Shares and Capital Gains Tax". HMRC. Retrieved January 8, 2023.
  5. "Capital Gains Manual". HMRC. Retrieved January 8, 2023.
  6. "Do you owe tax on excess reportable income?". Monevator. April 22, 2014. Retrieved January 8, 2023.

See also

External links

Web sites and discussion forums

Papers

Books