Why an ETF's cost differs between the issuer page, prospectus and KID

How it works

An ETF has one set of costs and several documents that report them, each written under a different rule for a different reader. The figures disagree because the rules disagree about three things:

1. Gross or net. Is a fee the manager has agreed to waive counted or not?
2. Look-through. Are the fees of other funds the ETF holds counted?
3. Trading. Are the costs of the fund buying and selling its holdings counted?

The documents, and the rule behind each:

An issuer's web page copies one of these. AOA's, below, labels its figures "as stated in the prospectus".

The US fee table: gross, net, and acquired funds

Form N-1A, Item 3, prescribes the fee table at the front of every US fund prospectus. "Annual Fund Operating Expenses" are based on the most recent fiscal year, and the instructions require the fund to "include in expenses amounts that would have been incurred absent expense reimbursement or fee waiver arrangements". That is the gross figure.

A net line is optional and conditional. Only a waiver or reimbursement that will reduce expenses "for no less than one year from the effective date of the Fund's registration statement" can appear, as "Fee Waiver" and "Total Annual Fund Operating Expenses After Fee Waiver", and the fund must give the expected termination date and say who can end it.

A fund that holds other funds adds a line, "Acquired Fund Fees and Expenses", for their costs. The instructions let the fund footnote that its fee table total does "not correlate to the ratio of expenses to average net assets" in its financial highlights, which leaves those fees out. Trading costs are in neither: the fee table carries only a sentence that transaction costs, "which are not reflected in annual fund operating expenses or in the example, affect the Fund's performance", and the turnover rate.

iShares AOA, which invests in other iShares funds and listed seven holdings on 22 October 2026, shows all of it in one place:

The summary prospectus of 28 November 2025 explains the waiver. The adviser "has contractually agreed to waive a portion of its management fees in an amount equal to the Acquired Fund Fees and Expenses" from investments in other iShares funds, "through November 30, 2026". It also says the acquired funds' fees are "not included in the Fund's ratio of expenses to average net assets". A screener that shows 0.19, one that shows 0.15 and an annual report that shows something else again can all be reading AOA's documents correctly.

The UCITS KIID: ongoing charges, trading excluded

The KIID's single cost number is the ongoing charges figure, calculated under CESR/10-674, guidelines of 1 July 2010. There is "a presumption that all costs borne by the fund must be taken into account unless they are explicitly excluded". The exclusions are the point:

• entry and exit charges paid by the investor;
• performance fees;
• interest on borrowing;
• "payments to third parties to meet costs necessarily incurred in connection with the acquisition or disposal of any asset", explicit like brokerage and taxes or implicit like market impact;
• payments for holding derivatives, such as margin calls.

It is computed ex post, preferably from audited accounts, as a percentage to two decimal places, and a fund that invests substantially in other funds includes their ongoing charges. In the EU the KID replaced the KIID for retail sale; in the UK the KIID survives until the FCA's product summary takes over, the timetable set out in why US ETFs are not sold to retail investors in Europe.

The EU KID: trading costs on arrival prices

The PRIIPs standards, Delegated Regulation 2017/653 in its consolidated text of 1 January 2023, put the trading costs back in, and Annex VI says how to measure them.

• Arrival price. For each purchase, the price "at the time the purchase order is transmitted to another person for execution" is subtracted from the net realised execution price, times the units bought; sales are the mirror image. The arrival price is "the mid-market price of the investment" at that moment.
• Three-year average. Transaction costs are annualised "based on an average of the transaction costs incurred by the PRIIP over the previous three years".
• A floor. "A minimum of explicit transaction costs" must be disclosed: commissions, stamp duty and market taxes, execution fees.

So the KID's transaction cost line includes market movement between sending an order and its execution, which the KIID never counted. On the KID below it sits next to the ongoing costs and inside the total, shown as money on a 10,000 euro example investment and as an annual "cost impact".

One share class, two documents, the same day

DWS publishes both documents for the same share class of Xtrackers S&P 500 UCITS ETF, the 1C EUR Hedged class, IE00BM67HW99. Both say they are accurate as at 14 April 2026.

The fund did not get more expensive between the two PDFs. The KID counts its trading and the KIID does not, and on this fund the trading line is twice the management line. Both documents also keep securities lending out of costs. The fund receives 82 per cent of that revenue, a Deutsche Bank lending agent 9 per cent and a DWS entity 9 per cent, and both say the split "does not increase the costs of running the fund". The same two documents even disagree on risk, category 6 of 7 on the KIID and 4 of 7 on the KID, because each has its own method for that too.

The broker's statement, and the UK's next document

A European investment firm adds its own layer. Article 50 of Delegated Regulation 2017/565 requires it to aggregate its own service costs with "all costs and associated charges associated with the manufacturing and managing of the financial instruments", as a cash amount and a percentage. It does so before the sale where it recommends or markets the product or must hand over a KID or KIID, and annually, personalised, where it has an ongoing relationship with the client. Article 50(4) was written for the KIID's gap: for "product costs and charges that are not included in the UCITS KIID, the investment firms shall calculate and disclose these costs". Where a fund still reports on the KIID basis, a broker's report can show a higher fund cost than the fund's own document, and be right.

The UK is moving the other way on part of it. In PS25/20 the FCA made the ongoing costs figure the headline of the new product summary, required "a numerical disclosure of explicit transaction costs, presented separately", averaged over 36 months, and removed the requirement to disclose implicit transaction costs. It treats the bid-ask spread as one of those implicit costs. A UK product summary will therefore show explicit trading costs, such as commissions and taxes, but not the arrival-price measure the EU KID uses.

What you can do about it

Name the figure before you compare two funds. Gross or net of a waiver; with or without acquired-fund fees; with or without trading costs. A US net expense ratio and an EU KID total are not the same measure, and the gap between them can be larger than the difference between the funds.

Read the waiver's end date. A net expense ratio lasts as long as the waiver. AOA's is contracted through 30 November 2026, and the summary prospectus says it can end earlier only by agreement of the trust and the adviser. The fee table's footnote, not the fund page, is where that date is.

For a fund of funds, use the fee table, not the annual report. The fee table includes the underlying funds' costs; the financial highlights ratio does not.

Compare like with like across the Atlantic. Put a UCITS fund's ongoing charges figure next to a US gross expense ratio; put the KID's transaction cost line next to the turnover rate the US fee table section reports, since the US fee table itself carries no trading-cost figure.

Check the screener against the document. justETF lists a TER column for European funds; ETF Research Center compares two funds on expense ratio, spread and commission over a holding period you choose; Trackinsight sets UCITS funds beside US ones. Each has to pick one of the figures above. When one looks wrong, the issuer's PDF settles it: on 7 October 2026, etf.com showed IVV's expense ratio as 10 per cent in two places, according to its card.

For your own all-in cost, use your broker's annual cost report. In the EU it must add product and service costs, including the trading costs the KIID leaves out. None of the fund documents includes the commission and spread you pay on the exchange; how the market price relates to the fund's value is in why an ETF's price, NAV and holdings differ.

More ETF data tools are in ETF research.