This ETF advertises a 0.23% TER and 0.00% tracking error (USD basis). The KIID [https://www.ubs.com/2/e/kiid/KIID_CH0106027193_en_CH.pdf] has a line that is confusing me. It says there is a one off charge, before and after investment, of 3% for conversion fees. There is also a 5% that they say depends on brokers. We can ignore that one for now.
I bought the ETF on IB (AUUSI) where it is listed in CHF on EBS. The transaction fees I paid were much lower, about 0.05%. So how should I understand those fees in the KIID? Is it only when bought through UBS directly?
Why would they be allowed to regulate the fee the broker may charge for conversion? And which conversion are they talking about, CHF->USD? USD->ETF?
Given that I bought in CHF (I didn’t see it listed in USD), I am left wondering if UBS then converts the CHF to USD, and somehow may charge 3% for this, without showing it in the tracking error or TER because the KIID is in USD? This probably does not make sense but I want to be sure!
Did you read the footnotes? Those fees are probably for the primary markets, as they mention in the footnote trading on exchange (secondary market) makes you pay only the exchange/brokers fees.
Ah, I see… thanks!
So this still means that, although I am not directly paying - someone had to pay these fees at some point in the past, and this is more or less amortized over all the owner of the ETF over time…
The 3 % conversion fees would be applied if for some reason unexpected the ETF has to be dissolved. This is almost never applied unless for example the company emitting the ETF goes broke or due to some embargo the fund has to be reimbursed as cash.
1 Like
By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
Durch das Lesen und die Teilnahme an diesem Forum bestätigst du, dass du den auf http://www.mustachianpost.com/de/ dargestellten Haftungsausschluss gelesen hast und damit einverstanden bist.