man in the workshop looking at the laptop

ETF Academy

Learn about ETF’s and how they can help you start investing today.

ETF Quicklist

Getting started with ETF investing

Whether you’re just getting started with ETFs or exploring how these fit into your current portfolio, ETFs can provide hundreds of choices designed to help you build an investment portfolio that works for you. We’ve worked with iShares by BlackRock, a leading ETF provider, to create guides to help you get started.

What is an ETF?

Exchange-traded funds (ETFs) are pooled investment funds that trade on stock exchanges. Just like stocks, they can be bought and sold throughout the day. ETFs are designed to track an index (such as the S&P 500 or FTSE 100) or a specific sector (health care, property or finance). An ETF’s value is determined by the underlying assets it holds.

ETFs hold portfolios that include many individual securities – such as stocks and bonds – allowing investors to own a diversified portfolio without buying each asset individually. By combining multiple holdings in a single wrapper, ETFs offer investors one-click diversification benefits and wide market access. A diversified portfolio may help to lower risk.

woman smiling on the sofa looking at the tablet

Know your E-T-Fs

We've made learning about ETFs as simple as your ABCs.

Watch this short video of ETFs explained made by BlackRock by iShares.

How do ETFs work?

The typical objective of an ETF is to closely match the performance of the underlying index or sector. We offer physical ETFs which invest directly in the holdings of the index or sector to replicate its performance.

What are the potential benefits of ETFs?

The simplicity and cost effectiveness of ETFs have made them a valuable tool for investors seeking to achieve both long-term and short-term investment goals.

Pie chart image

Diversification: ETFs spread exposure across multiple stocks or bonds, through a single investment

compare image

Accessibility: ETFs can be traded throughout the day, allowing investors to quickly enter and exit markets

payment image

Low cost: ETFs typically have lower fees than managed funds, providing more cost-effective access to markets

Coin image

Tax benefits: Compared to managed funds, ETFs offer a range of tax benefits including reduced capital gains tax

A broad range of exposures

Investing in ETFs can open the door to a whole world of investment options, covering a broad range of asset classes, sectors, currencies, commodities and geographies.

Equity ETFs

Equity ETFs invest primarily in stocks or equities, and are designed to track an individual index, such as the S&P 500. Equity ETFs span many categories, from an index in a specific region or country, to individual sectors like health care and technology.

Bond ETFs

Bond or fixed income ETFs invest primarily in bonds issued by governments or corporations with a view to track an index, such as the Bloomberg Global Aggregate Bond Index.

Bond ETFs typically hold a diverse collection of bonds, which means there is lower exposure to the investment risk of holding an individual bond.

Exchange-traded commodities (ETCs)

ETCs are similar to ETFs, but instead of holding a diversified portfolio of stocks or bonds, they hold a collection of commodities, such as precious metals or oil. ETCs enable investors to gain exposure to commodities without having to physically own or store the commodities themselves, and may provide additional diversification benefits, much like an ETF.

Frequently asked questions

How do ETF charges work?

ETFs will have an ongoing charge baked into the price of the fund – this is called the OCF. ETFs are usually much cheaper than managed funds as the fund simply tracks a benchmark, rather than needing analysts to decide what to buy and sell.

When you invest in an ETF with Bank of Scotland, like other investments, you’ll pay a trading commission (of £9.50). However, you can set-up a regular monthly investment which is commission free.

Do ETFs pay dividends?

Some ETFs do pay dividends. The ETF will collect the dividend and distribute them to ETF holders. Investors can then choose to take the cash or reinvest the dividend back into the same ETF.

Is your ETF Quicklist a recommendation?

No, our platform is execution-only meaning we don't give advice to customers. If you're not sure about investing then you should seek independent advice (which may be chargeable). The ETF Quicklist is intended to provide you with ETFs with exposure to different themes and markets to help you create the basic building blocks of an investment portfolio.

Compare our accounts

Whether you are looking for a Share Dealing Account or a Share Dealing ISA, we've got an account to suit your needs.

New to Bank of Scotland Investments?

Market and Insights

Take a look at the latest market and company data as well as having access to commentary from experts and news.

Why Bank of Scotland?

You can access your share dealing account from the Bank of Scotland mobile banking app using our simple platform. We offer flat rate pricing with no confusing %.

Why iShares?

iShares unlocks opportunity across markets to meet the evolving needs of investors. With more than twenty years of experience, a global line-up of 1300+ exchange traded funds (ETFs) and $3.21 trillion in assets under management as of June 30, 2023, iShares continues to drive progress for the financial industry. iShares funds are powered by the expert portfolio and risk management of BlackRock.

Important information

Bank of Scotland Share Dealing have engaged with BlackRock, a recognised exchange traded fund (ETF) provider, to produce an ETF Quicklist.

BlackRock was selected by Bank of Scotland Share Dealing due to BlackRock being one of the largest ETFs providers that manufactures several ETFs. The engagement between Bank of Scotland Share Dealing and BlackRock comprises of Bank of Scotland Share Dealing making available ETFs managed by BlackRock to customers of Bank of Scotland Share Dealing. The ETFs have been selected by BlackRock based on some objective criteria provided by Bank of Scotland Share Dealing which may change from time to time. BlackRock will also provide educational material regarding ETFs for Bank of Scotland Share Dealing to make available to its customers.

Not a recommendation or advice

The ETF Quicklist is aimed to provide customers of the Bank of Scotland Share Dealing platform a selection of ETFs that offer exposures to different themes and markets. These ETFs have been selected by BlackRock using the following criteria which has been provided by Bank of Scotland Share Dealing.

Each ETF must align with the Bank of Scotland Share Dealing target market for UK Retail customers on a non-advised and on an execution only basis and Bank of Scotland Share Dealing asset policy – including the ETFs must be: (a) registered for marketing into the UK for retail investors, (b) be able to be traded on the London Stock Exchange and (c) have a physical replicating strategy only.

The ETF Quicklist may also contain ETCs which are subject to the same criteria.

ETF Quicklist

BlackRock will review the ETF Quicklist at least each calendar quarter to ensure the selected ETFs continue to meet the criteria that has been provided by Bank of Scotland Share Dealing.

The availability of the ETFs, via the Bank of Scotland Share Dealing platform, is not deemed to be the provision of investment advice for Bank of Scotland customers. The Bank of Scotland Share Dealing platform is an execution only platform and, therefore, Bank of Scotland does not give advice to its customers. Customers who are not sure about investing must seek independent advice which may be chargeable.

Customers of the Bank of Scotland Share Dealing platform are clients of Bank of Scotland, not clients of BlackRock. BlackRock is not providing any investment advice for Bank of Scotland and/or its customers.

Market events can be unpredictable which may impact fund performance and therefore performance of the ETFs selected for the platform cannot be guaranteed.

There is no fee arrangement between Bank of Scotland Share Dealing and BlackRock.

Important legal information

Bank of Scotland Share Dealing Service is operated by Halifax Share Dealing Limited. Registered in England and Wales No. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.