10th September 2010
Research carried out by The Motley Fool shows that you can slash the already low costs associated with exchange traded funds (ETFs) simply by shopping around.
ETFs are already popular with investors, largely because they are tax efficient, cheap, and offer a good way to get exposure to a sector that may be underrepresented in your portfolio. But The Fool has discovered that by doing your homework you can significantly reduce the costs even further.
It gives as an example the choice between an ETF with a TER of 0.74%, and one with a TER of just 0.6%. The difference of 0.14 percentage points between the two is equivalent to a saving of almost 19%.
The Fool's Malcolm Wheatley says: "I've done a head-to-head comparison of HSBC's ETFs, calculated the savings compared to their competing iShares products, and ranked them in order of saving.
"The savings can be substantial."