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How to invest


Overview


An Exchange Traded Product (ETP) is a financial instrument traded on a stock exchange whereby typically the aim is to provide the same return as a specified benchmark or asset (before fees).

WisdomTree is an issuer of ETPs. Our ETPs are generally considered suitable for investment via ISAs and SIPPs.


How do I buy ETPs?


Investors can purchase securities in our ETPs, just as they would purchase shares, directly via a broker or financial advisor. Investors cannot trade directly with WisdomTree.

Our ETPs can be bought during daily trading hours via a number of different execution only platforms, and are listed on the following exchanges:



The London Stock Exchange (LSE) has a 'Locate a broker' tool on their website. Brokerage fees may apply.

What are the costs?


The price of securities will depend on the current value of the underlying index or asset on which the ETP is based. It will also include various fees and charges:


  1. Product costs


    1. Total Expense Ratio (TER) (%)

    2. This refers to the fees subtracted to cover the cost of operating the product, and is typically expressed as an annualised percentage. For more information about specific product fees, please see individual product pages. Also sometimes referred to as the Management Fee or the Management Expense Ratio (MER).


    3. Rebalancing costs

    4. The cost incurred by physical ETPs when they buy and sell securities. When the underlying index changes its constituents, the ETP must do likewise. Transaction costs depend on how many and often the index constituents change: the greater the number and frequency, the more expensive the rebalancing costs will be.


    5. Swap spread

    6. The fee paid by synthetic ETP providers to the swap counterparties for the swap agreements. Generally, more illiquid or exotic exposures have more expensive swap spreads. Sometimes the swap spread is incorporated into the TER of ETPs.


    7. Securities lending

    8. Revenue incurred by physical ETPs which can reduce the cost of the ETP. WisdomTree does not engage in securities lending. 


  2. Bid/Offer Spread


  3. This refers to the price a market maker* charges an investor when they buy or sell an ETP on a stock exchange. This is often quoted in basis points - one hundredth of a percent - so a 10 basis point spread would indicate a 0.1% difference between the market maker's bid (the price at which an investor would sell), and the price the market maker offers (the price at which an investor would buy).


  4. Broker/Platform charges


  5. This refers to the charges exacted by the broker or platform for executing the requested order.

* A market maker is a specialist in providing prices for investors to buy or sell at.


Example of how to read ETP codes and tickers


This example, using ETFS Physical Gold, shows how a single ETP can have multiple trading lines and identifiers depending on where it is listed.


Definitions:


Base Currency

The currency in which the product reports the value of its net assets. Usually based on the underlying index or asset currency. Also known as ‘denominated currency’.


ISIN

The International Securities Identification Number - a code that uniquely identifies a specific securities issue. Although uncommon, it is possible for two ISINs to relate to the same product. For example, German ISINs differ from those in other countries, as shown in the diagram below.


Trading Line

The currency in which a product can be bought or sold on a particular exchange. Taking ETFS Physical Gold as an example: Gold is priced in USD, therefore ETFS Physical Gold base currency is USD. However, this product can be traded in other trading lines such as GBX, EUR, JPY.


Exchange Code

Also known as a ‘ticker’. It is an abbreviation used to uniquely identify securities listed on a certain exchange. The exchange code may consist of letters, numbers or a combination of both.

ETFS Physical Gold

Base currency: USD

ISIN
JE00B1VS3770

ISIN
DE000A0N62G0

Trading lines and exchange codes:

USD
PHAU
London Stock Exchange

EUR
PHAU
NYSE Euronext

EUR
PHAU
Borsa Italiana

JPY
1672
Tokyo Stock Exchange

GBX
PHGP
London Stock Exchange

EUR
VZLD
Deutsche
Börse

For illustrative purposes only


Most of these identifiers can be used to find a product on an execution only broker's online platform.


Example of how to buy an ETP via an execution only broker