The short version
- An ETF costs you in two layers: the fund's yearly charge, and the costs of buying and holding it (the spread, platform fees and any currency fees).
- Six large global and UK index ETFs I checked in October 2026 charged between 0.07% and 0.20% a year.
- Platform fees can cost more than the fund itself, especially on a small pot. Look at the total, not one number.
- You pay no stamp duty when you buy an ETF. Tracking difference, the gap between a fund and its index, shows what all the costs added up to.
Part of ETF basics. New to ETFs? Start with what an ETF is and how it works.
- 0.07–0.20%yearly charges of six large global and UK index ETFs, checked October 2026
- 0%stamp duty on buying an ETF, against 0.5% on UK shares
- 0.2–2.4%yearly platform charges on £5,000 in a stocks and shares ISA, FCA study, 2019
Two layers of cost
When you own an ETF, you pay in two places. The fund takes a yearly charge for running itself. Then you pay to buy and hold it: the spread, your platform’s fees and sometimes a currency fee.
The first layer is printed on the fund’s factsheet. The second depends on where and how you buy. Two people holding the same ETF can pay very different amounts.
The ongoing charge
The ongoing charge is a yearly fee for running the fund. You never get a bill. It’s deducted from the price of the fund a little at a time.
Providers label it differently. iShares and SPDR call it the total expense ratio (TER), HSBC the ongoing charges figure (OCF), and Vanguard shows “OCF/TER”. SPDR’s factsheet defines it as a fee charged to the fund, as a percentage of its value, to cover running and managing it.
It doesn’t cover everything. HSBC notes that its figure includes the annual management charge but not transaction costs, the cost of the fund buying and selling shares. Vanguard reports both: for its FTSE All-World ETF, transaction costs of 0.03% sit on top of ongoing costs of 0.14%.
What large index ETFs charge
To show the going rate, I checked the published charges of six large global and UK index ETFs from four providers. They’re examples on the date checked, not recommendations.
| ETF (example only) | Provider's label | Yearly charge | Document checked |
|---|---|---|---|
| iShares Core MSCI World UCITS ETF (USD Acc) | TER | 0.20% | Factsheet, September 2026 |
| SPDR MSCI All Country World Investable Market UCITS ETF (Acc) | TER | 0.17% | Factsheet, 30 September 2026 |
| HSBC MSCI World UCITS ETF | OCF | 0.15% | Monthly report, 31 August 2026 |
| Vanguard FTSE All-World UCITS ETF (USD Dist) | OCF/TER | 0.14% | Product page, 13 October 2026 |
| Vanguard FTSE 100 UCITS ETF | Ongoing costs | 0.09% | Costs document, 20 August 2026 |
| iShares Core FTSE 100 UCITS ETF (GBP Dist) | TER | 0.07% | Factsheet, September 2026 |
Across these examples, the yearly charge ran from 0.07% to 0.20%. On £10,000, that’s £7 to £20 a year. Charges change, so always check the latest factsheet.
Whether paying more buys better results is covered in active vs passive funds: what the evidence shows.
The spread
At any moment an ETF has two prices: a slightly higher one you can buy at and a lower one you can sell at. The gap is the spread, and you pay it each time you trade.
UCITS ETFs must warn that buyers may pay more than the fund’s net asset value, the value of what it holds. Sellers may receive less.
For big funds the gap can be tiny. Vanguard estimates it from a rolling 30-day average: 0.02% for its FTSE All-World ETF and 0.01% for its S&P 500 ETF. Because you pay it on every trade, it matters more the more often you buy and sell.
Platform fees: flat or percentage
Your platform, the website or app that holds your investments, charges for looking after your account. Many also charge for each trade. The yearly fee comes in two main shapes.
- Percentage fees take a slice of what you hold each year, so they grow as your pot grows.
- Flat fees are a fixed amount, often monthly, whatever you hold.
Some platforms mix the two. When I checked, Vanguard Investor charged £4 a month below £32,000 and 0.15% a year above, capped at £375. interactive investor’s Core plan cost £5.99 a month for portfolios up to £100,000, plus £3.99 per UK share or ETF trade.
Your pot size decides which shape weighs more. A flat £5.99 a month is £71.88 a year: 1.4% of £5,000, but 0.07% of £100,000. A 0.25% fee would be £12.50 on £5,000 and £250 on £100,000.
The gaps between platforms can be wide. When the FCA studied platforms in 2019, charges on £5,000 in a stocks and shares ISA ranged from 0.2% to 2.4% a year.
Currency fees
Some global ETFs are run in US dollars but listed in London in more than one currency. The iShares Core MSCI World ETF, for example, has a London line priced in pounds and another in dollars.
If you buy a line priced in another currency, or receive dividends in one, your platform may charge to convert. interactive investor’s Core plan charged 0.75% on foreign exchange when I checked.
Buying the line priced in pounds avoids that fee, but not currency risk. The fund still owns shares priced in dollars, yen and euros, and exchange rate moves change what they’re worth in pounds.
Tracking difference and tracking error
Two measures show how closely a fund follows its index.
- Tracking difference is the gap between the fund’s return and the index’s return over a period, usually a year.
- Tracking error is how much that gap varies over time. A low figure means the fund sticks closely to its index from month to month.
Tracking difference is the one that reaches your pocket. It reflects the ongoing charge plus everything else, from trading costs to small holdings that are hard to buy. UCITS index funds must disclose and explain it in their annual report.
It isn’t always negative. HSBC’s MSCI World ETF returned 20.89% after fees in the year to 31 August 2026, against 20.81% for its index.
The tax you don't pay
Buying existing shares in a UK company usually costs 0.5% in tax, called stamp duty reserve tax when you buy electronically. Units in UCITS ETFs have been exempt since 28 April 2014, as HMRC’s manual confirms.
Investment trusts are companies, so buying their shares usually does attract the 0.5%. The ETF vs investment trust guide has the detail.
Adding it up
Here’s an illustration. Put £10,000 in an ETF charging 0.15%, on a platform charging 0.25%. That’s £15 plus £25, or £40 a year, before spreads and dealing fees.
Hold the same ETF on a £5.99-a-month platform and it’s £15 plus £71.88. On a pot of £100,000, the sums flip.
Over decades these gaps compound. The fee calculator shows how much a difference in yearly fees adds up to.
Which costs matter most depends on you. Useful questions: how much will you invest, as a lump sum or monthly? How often will you trade? Will you buy anything priced in another currency?
Common questions
- Is the ongoing charge taken from my account?
- No. It’s taken inside the fund and shows up in the price, not as a line on your statement. Your platform’s fee is separate.
- Is the lowest ongoing charge always the cheapest fund?
- Not necessarily. Trading costs, the spread and tracking difference all add to or offset the headline figure. Funds tracking different indices aren’t directly comparable either.
- What does “bps” mean?
- Basis points. One basis point is 0.01%, so 20 bps is 0.2%. You’ll see it in fund documents and regulators’ reports.
- Do I pay stamp duty when I sell an ETF?
- No. The 2014 exemption covers any transfer of units in a qualifying ETF, whether you’re buying or selling.
- Where do I find a fund’s transaction costs?
- In the provider’s costs and charges information. Vanguard, for example, publishes ongoing, transaction and one-off costs for each of its funds in one document.
This page explains how ETF costs work. It isn't advice about what you should buy. Investments can fall as well as rise, and you may get back less than you put in. For free, impartial guidance, try MoneyHelper. Read the full disclaimer.
Sources
- iShares Core MSCI World UCITS ETF factsheet, September 2026, BlackRock
- iShares Core FTSE 100 UCITS ETF factsheet, September 2026, BlackRock
- SPDR MSCI All Country World Investable Market UCITS ETF factsheet, 30 September 2026, State Street Investment Management
- HSBC MSCI World UCITS ETF monthly report, 31 August 2026, HSBC Asset Management
- FTSE All-World UCITS ETF (USD) Distributing, Vanguard
- Self-managed service costs and charges information, 20 August 2026, Vanguard
- ISA fees and charges, interactive investor
- Investment Platforms Market Study: Final Report (MS17/1.3), March 2019, Financial Conduct Authority
- Guidelines on ETFs and other UCITS issues (ESMA/2014/937), European Securities and Markets Authority
- Tax when you buy shares, GOV.UK
- The Stamp Duty and Stamp Duty Reserve Tax (Exchange Traded Funds) (Exemption) Regulations 2014, legislation.gov.uk
- STSM101065: Exchange Traded Fund: Stamp Duty and SDRT, HMRC Stamp Taxes on Shares Manual
- Choosing an investment trust, Association of Investment Companies (trade body)
Facts checked 13 October 2026.