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ETFs offer:

• Exposure to Indices and markets in one transaction;
• Low-cost index investment;
• Traded on the Exchange, and typically with low bid/offer spreads;
• Versatile and flexible to use, generally eligible for inclusion in Self-select ISAs and SIPPs, subject to normal HMRC eligibility criteria;
• Like any stockmarket investments, their value can go down as well as up and you may get back less than you invested;
• Different types of ETF bring different opportunities- and different risks: be sure to check out the details of the investments you are making and understand its particular characteristics.

You can invest in Exchange Traded Funds (ETF's) through Selftrade using the following providers.

Whichever you choose, it is important you ensure you understand the type of ETF in which you are investing. For example, 'short' or 'leveraged' ETFs will typically be more volatile and be of higher risk than those tracking, for example, a UK Index.

ETFs are typically listed on several Exchanges globally; not all will be as liquid as each other. We will usually offer the UK, Sterling, version of an ETF as well as Euro and US Dollar ETFs. When investing in ETFs traded in a currency other than sterling you will have exposure to the added risk of currency exchange rates which can affect your returns.

Consider too the Distributor status of the ETF you are buying. Capital gains in Funds which do NOT have Distributor status will be treated as income by UK tax authorities and could hence be subject to a higher rate of tax than might apply if they were assessed for Capital Gains Tax purposes.

Each issuer's website provides access to factsheets about each Fund, the Fund Prospectus, news and information. We would encourage you to take advantage of this information to assist you in making your investment decisions.

Current issuers include:

db x-trackers

Launch in January 2007, Deutsche Bank's range of ETFs covers various asset classes and various styles.

Distributor status: Deutsche Bank has advised that all db x-trackers ETFs are managed such that they will be compliant with the HMRC requirements to meet Distributor status or Reporting Fund status.

db-x Infomail >

For further information visit the db x-trackers ETF website >

ETF Securities

As well as their range of Exchange Traded Commodities (ETCs), ETF Securites offer a range of ETFs including 'short' 'leveraged' and currency Funds.

For further information visit the ETF Securities website >

Distributor status: ETF Securities advise that they have 'Distributor' or 'Reporting Fund' status for all their products listed prior to June 2010. For ETF Securities' products listed since June 2010, application for Reporting Fund status has either been submitted, or will be submitted within 3 months of their initial listing, and based on its experience, ETF Securities fully expects to receive Reporting Fund status for those products as well: ETFs tax treatment >

HSBC

HSBC joined the ranks of ETF issuers in August 2009 through its subsidiary, HSBC ETFs plc, and now provides a range of UK and US index trackers.

For further information visit the HSBC ETFs website >

Invesco Powershares

Founded in 2003, Invesco PowerShares is a part of Invesco Ltd., an independent global investment management company, and offers a broad range of ETFs encompassing different styles, industries, commodities and currencies. The PowerShares range includes standard as well as fundamentally-weighted index trackers.

For further information visit the Invesco PowerShares website >

Distributor status: Invesco has confirmed that all UK listed products have Distributor status: Invesco PowerShares Snapshot >

iShares

iShares is the brand name for one of the world's largest ranges of ETFs. Originally part of Barclays Global Investors and acquired by BlackRock in 2009, it lays claim to being the issuers of the first European ETFs in 2000.

For further information visit the iShares ETF website >

Distributor status: iShares advise that the status varies from ETF to ETF: UK Distributor status and UK Reporting Fund status of iShares Funds >

Lyxor Asset Management

Part of the Société Générale Group, Lyxor ETFs offer a wide range of global index trackers as well as more specialist Funds.

For further information visit the Lyxor ETF website >

Distributor status: Lyxor has confirmed all UK funds have Distributor status: Lyxor ETF UK PC Product Range >

Source

Launched in April 2009 as an ETF platform in partnership with Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley and Nomura, Source offers a range of sector and index ETFs.

For further information visit the Source website >