ETFs track equity indices and as a result the value of the fund may go down as well as up. Performance data is based on the net asset value (NAV) of an ETF which may not be the same as the market price of an ETF. Individual shareholders may realise returns that are different to the NAV performance.
As ETFs are investments that are openly traded on a stock exchange, the price fluctuates throughout the day depending on demand. It's important to understand the difference between the price you pay for the investment (dictated daily by the stock market) and the dealing charges and service fees set by the fund manager and investment platform.
If you are buying ETFs, the price you buy or sell at depends on which type of order you place with us:
Market order – you are provided with a quote based on the latest price which is available for 15 seconds. If you’re happy with the quote, you can buy or sell the shares immediately. If you’re not happy with the price, you can request another quote at the end of the 15 second period. If the market is closed or a quote cannot be provided for either a market-related or technical reason, you can choose to buy or sell shares without seeing a quote first. This is also known as an 'At best order' as we send your request to the market and attempt to fill that order at the best price available from a number of different market makers. Prices can be volatile when market first opens, so you may wish to place a Limit order.
Limit order – you tell us a specific price online you’re willing to buy or sell per share which, if reached, will trigger your order to be placed. You can invest a monetary amount (for example, £50 of shares at 200p per share) or purchase a quantity of shares (for example, 200 shares at 200p). We send your request to the market and it is executed if your limit price (or better) is achieved for the full amount of your order. Limit orders expire at the end of the day you select your order to end on, which can be any trading date up to 30 days from when you submit your order.
In addition any re-investment, regular savings plan and withdrawal plan deals are aggregated and combined with other customer’s orders. They are then placed at certain times of day, and will achieve the best price available at the time of market execution.