Guide to using ETFs in your ISA

With a Barclays Stockbrokers Investment ISA you can now invest up to £ 10,200 each year. You will not pay capital gains tax on any growth, nor income tax on any returns from your investments*. The actual level of tax benefit will depend on your individual circumstances (for example, if you do not pay any UK tax you will not receive any tax benefit from an ISA) and may change in the future.

Introducing the Barclays Stockbrokers Investment ISA. Your ISA. Your way.

Our market leading Investment ISA offers you access to a wide range of investment products and access to a variety of Barclays Wealth research and tools, as well as:

• Control

  Our Investment ISA gives you complete control over your investments, allowing you to structure a portfolio which meets your investment objectives and risk profile

• Choice

  Access to a wide range of products - including shares, Exchange Traded Funds (ETFs)SEE BELOW, gilts and bonds, Exchange Traded Commodities (ETCs), funds and structured products

• Easy access to your ISA funds

  You can access the funds in your Investment ISA if you need them, although you may get back less than you originally invested. It is advisable to view any investment of this sort as a medium to long term commitment

• Help with moving

  Transfer an existing ISA to us from another provider and we will cover your transfer costs, up to £150 per account, to a maximum of £500** per client as well as assisting you through the process, making it as quick and easy as possible

• Assistance when you need us

  We are available for support online or over the phone.

Exchange Traded Funds

The flexibility of a share with the diversification of a fund

Designed to track the performance of a benchmark like the FTSE 100 or S&P 500, Exchange Traded Funds (ETFs), combine the benefits of a fund (instant diversification and access to a whole market or sector) with the benefits of a share (flexibility, continuous pricing, ease of access and continuous dealing during market hours) making them simple, flexible and transparent additions to your portfolio.

Why exchange traded funds?

ETFs can be simple, transparent and flexible additions to a balanced portfolio.

• Simple
– bought and sold just like stocks, they are highly liquid and easy to trade.
• Transparent
– the components of the ETF are fully visible to you the investor.
• Flexible
- trade in global markets and assets that are normally difficult to access.
• Diversification
– access a whole country index through a single share.
• Low cost
–as ETFs trade like stocks, standard commission rates apply (from £6.95 - £12.95 per online trade). There is no Initial Service Charge (ISC) and low Annual Management Charges (AMC) normally apply (see the ETF factsheet for further information).
• No stamp duty
- tax treatment depends on your individual circumstances.

ETF risk warning

While most ETFs do not use leverage and achieve their objectives by purchasing a diversified pool of assets, for example the individual stocks that make up the FTSE100, some achieve their objectives through the use of derivatives, typically swaps, which carry counterparty risk. If the counterparty (issuer of the derivatives) does not pay the sums due, the investor will see a reduced return regardless of the performance of the underlying assets.

In addition, there are leveraged and inverse (or short) ETF products available from some providers. ETFs that offer leverage, or that are designed to perform inversely to their underlying index or benchmark, are highly complex financial instruments that carry significant risks. These securities may not be appropriate for many investors, especially for those who plan to hold them longer than one trading session.

Leveraged and inverse ETFs have unique compounding, daily reset and leverage features that may significantly amplify risk, particularly for medium and long-term investors, and in periods of high market volatility. Before investing in any leveraged or inverse ETF, you should read the prospectus carefully. ETFs are traded like shares and may not be for everyone. They closely track the performance of an index and as such their value can go down as well as up and you may get back less than you invested. If you are in any doubt as to their suitability, please seek independent financial advice.

ETF issuers

iShares are the world’s leading exchange traded funds. There are over 400 iShares available worldwide with more than 85 traded through the London Stock Exchange and available to trade and hold through a Barclays Stockbrokers MarketMaster®, ISA or PensionMaster.

Other issuers who offer London list ETFs include db x-trackers (Deutsche Bank), ETF Securities, Invesco PowerShares, Lyxor ETF and HSBC.

How to invest

Trading exchange traded funds could not be easier, simply log into your MarketMaster®, ISA or PensionMaster.

Looking for a list of ETFs?

For a list of ETFs from each of the issuers go to the "Market News and Data" tab and enter the issuer’s name. For example enter “iShares” in the search box for a complete list of iShares ETFs, enter ‘x-trackers’ for Deutsche Bank or for Lyxor ETFs, enter ‘Lyxor’.

Want to trade?

Select the Deal tab and enter the epic code for the ETF you want to trade. Remember you can also set limits, stops and trailing stop orders for GBP ETFs to help you manage your ETF investments more effectively.

Trade with the best

New to Barclays Stockbrokers? Open an account and you could be investing tomorrow; Barclays can help you pick the account that is right for you.

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