Exchange traded funds business iShares, part of Barclays Global Investors, has published an ETF guide for UK independent advisors.

The iShares Guide for UK IFAs includes sections on the differences between active and index tracking funds, the differences between physical and swap based ETFs, how to evaluate the total cost of ownership, the role of ETFs in asset allocation and the wrap platforms iShares’ ETFs can be found on, along with their various tax implications.

The guide's publication comes at a time when advisors are having to closely examine the way they conduct business and the products they recommend in light of the UK regulator’s Retail Distribution Review.

“The Financial Services Authority has recently specified that advisors should be considering ETFs as part of the ‘whole of market’ requirement when deciding on appropriate investment products for their clients,” said Julian Hince, senior business development officer for the IFA sector at iShares Europe.

ETFs, which were hardly known in the early 1990s, have surged as a sector in the past two decades, benefiting from their ability to mimic returns of sometimes hard-to-enter market indices without the investor having to own the underlying index assets. ETFs are free of transaction taxes such as stamp duty and now track indices of bonds, stocks, commodities, infrastructure and even private equity.

“ETFs are a transparent, cost effective way to invest in particular markets and can be used to meet a range of investment objectives. We firmly believe ETFs will have an expanded role to play in the new advisory climate,” said Mr Hince.