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

Gross or net of a waiver, with or without other funds' fees, with or without trading costs. Each cost document answers a different question about one fund.

*https://stockmarketstack.com/guides/why-an-etfs-cost-differs · background to ETF Research & Screeners*

**Answer:** Because each document follows a different rule. A US prospectus fee table shows total operating expenses, including other funds' fees, and may add a net line for a waiver lasting at least a year. A UCITS ongoing charges figure leaves out the fund's trading costs. The EU KID adds them, measured against arrival prices. For one Xtrackers share class on 14 April 2026, the UK KIID shows 0.05 per cent and the EU KID 0.05 plus 0.10 of transaction costs.

## 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:

| Document | Rule | The fund's own trading costs |
|---|---|---|
| US prospectus fee table | Form N-1A, Item 3 | Excluded; the turnover rate is narrated instead |
| UCITS KIID ongoing charges (UK, until the product summary replaces it) | CESR/10-674 | Excluded |
| EU PRIIPs KID | Regulation 2017/653, Annex VI | Included, measured on arrival prices |
| Broker's cost report (EU) | Regulation 2017/565, Article 50 | Included where the fund's KIID leaves them out |

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](https://www.sec.gov/about/forms/formn-1a.pdf), 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](https://www.ishares.com/us/products/239729/ishares-aggressive-allocation-etf), which
invests in other iShares funds and listed seven holdings on 22 October 2026, shows all of it in one
place:

| Line, as of the current prospectus | |
|---|---|
| Management fee | 0.15% |
| Acquired fund fees and expenses | 0.04% |
| Other expenses | 0.00% |
| Expense ratio | 0.19% |
| Fee waivers | −0.04% |
| Net expense ratio | 0.15% |

The [summary prospectus](https://www.ishares.com/us/literature/summary-prospectus/sp-ishares-core-agg-alloc-etf-7-31.pdf)
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](https://www.esma.europa.eu/sites/default/files/library/2015/11/10_674.pdf), 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](https://stockmarketstack.com/guides/why-us-etfs-are-not-sold-in-europe).

## The EU KID: trading costs on arrival prices

The PRIIPs standards,
[Delegated Regulation 2017/653](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02017R0653-20230101)
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.

| | [UK KIID](https://etf.dws.com/Download/UK%20KIID/IE00BM67HW99/GB/EN) | [EU KID](https://etf.dws.com/Download/KID/IE00BM67HW99/IE/EN) |
|---|---|---|
| Ongoing charge / management and operating costs | 0.05% | 0.05%, "an estimate based on actual costs for the fiscal year ending 31.12.2025" |
| Transaction costs | Not shown: the figure "excludes portfolio transaction costs" | 0.10% |
| Total on 10,000 EUR | Not shown | 15 EUR after 1 year, 103 EUR after 5 years |
| Annual cost impact | Not shown | 0.2% |

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](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32017R0565)
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](https://www.fca.org.uk/publication/policy/ps25-20.pdf) 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](https://stockmarketstack.com/tools/justetf) lists a TER column for
European funds; [ETF Research Center](https://stockmarketstack.com/tools/etf-research-center) compares two funds on expense
ratio, spread and commission over a holding period you choose; [Trackinsight](https://stockmarketstack.com/tools/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](https://stockmarketstack.com/tools/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](https://stockmarketstack.com/guides/etf-price-nav-and-holdings-disclosure).

More ETF data tools are in [ETF research](https://stockmarketstack.com/categories/etf-research).

## Tools this bears on

- [justETF](https://stockmarketstack.com/tools/justetf.md) — A screener and portfolio planner for European UCITS ETFs — no US listings, no API.
- [ETF Research Center](https://stockmarketstack.com/tools/etf-research-center.md) — Holdings-level ETF research — overlap, stock locator and fundamentals rolled up per fund.
- [Trackinsight](https://stockmarketstack.com/tools/trackinsight.md) — A free global ETF screener — 15,875 funds across listing venues, with daily flows.
- [ETF.com](https://stockmarketstack.com/tools/etf-com.md) — A free US ETF screener, flows tool and fund pages on FactSet data, with an AI assistant.

## FAQ

### What is the difference between an ETF's expense ratio and its net expense ratio?

The expense ratio in a US prospectus fee table is total annual operating expenses, counted as if no fee waiver existed. The net figure subtracts a waiver or reimbursement, and Form N-1A allows that second line only for an arrangement lasting at least a year, with its expected end date disclosed. On the AOA page the two are 0.19 and 0.15 per cent.

### Why does a fund's fee table differ from the expense ratio in its annual report?

A fund that invests in other funds must add their fees to its fee table as acquired fund fees and expenses. The ratio of expenses to average net assets in the financial highlights leaves them out, and Form N-1A lets the fund say in a footnote that the two do not correlate.

### Is the ongoing charges figure the same as the TER?

The ongoing charges figure is the KIID's defined term, calculated under CESR's 2010 methodology. It includes all costs taken from the fund except those it explicitly excludes, among them entry and exit charges, performance fees, interest on borrowing and portfolio transaction costs. Screeners such as justETF label their cost column TER, so check which document the number came from.

### Why is the cost on a European KID higher than the ongoing charges?

Because the KID adds portfolio transaction costs that the ongoing charges figure excludes. The PRIIPs standards measure them as the difference between each trade's execution price and the price when the order was sent, averaged over three years, with a floor of the explicit costs such as commissions and taxes.

### Does any of these figures include the bid-ask spread I pay on the exchange?

No. The US fee table says you may pay brokerage commissions and other fees not in the table, and the Xtrackers KID says secondary-market investors may be charged fees by their broker. The FCA treats the bid-ask spread as an implicit cost and, under its new product summary rules, does not require it to be disclosed.

## Sources

1. [Form N-1A, Registration Statement of Open-End Management Investment Companies (SEC 2052, 12/23), Item 3 and instructions](https://www.sec.gov/about/forms/formn-1a.pdf) — U.S. Securities and Exchange Commission, read 2026-10-23
2. [iShares Core 80/20 Aggressive Allocation ETF (AOA), fund page](https://www.ishares.com/us/products/239729/ishares-aggressive-allocation-etf) — BlackRock (iShares), read 2026-10-23
3. [iShares Core 80/20 Aggressive Allocation ETF, Summary Prospectus](https://www.ishares.com/us/literature/summary-prospectus/sp-ishares-core-agg-alloc-etf-7-31.pdf) — BlackRock (iShares), 2025-11-28
4. [CESR's guidelines on the methodology for calculation of the ongoing charges figure in the Key Investor Information Document, CESR/10-674](https://www.esma.europa.eu/sites/default/files/library/2015/11/10_674.pdf) — Committee of European Securities Regulators (hosted by ESMA), 2010-07-01. The ongoing charges method the KIID still uses; ESMA hosts it, and the KIID figure on the Xtrackers document of April 2026 follows its exclusions.
5. [Commission Delegated Regulation (EU) 2017/653, PRIIPs regulatory technical standards, consolidated text of 1 January 2023](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02017R0653-20230101) — Publications Office of the European Union (EUR-Lex), 2023-01-01. EUR-Lex lists 1 January 2023 as the current consolidated version of these standards on 23 October 2026.
6. [Commission Delegated Regulation (EU) 2017/565, MiFID II organisational requirements and operating conditions, Article 50](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32017R0565) — Publications Office of the European Union (EUR-Lex), 2017-03-31. EUR-Lex lists no amending act that touches Article 50; later amendments changed other articles.
7. [Xtrackers S&P 500 UCITS ETF 1C - EUR Hedged (IE00BM67HW99), Key Information Document](https://etf.dws.com/Download/KID/IE00BM67HW99/IE/EN) — DWS Investment S.A., 2026-04-14
8. [Xtrackers S&P 500 UCITS ETF 1C - EUR Hedged (IE00BM67HW99), Key Investor Information for Investors in the United Kingdom](https://etf.dws.com/Download/UK%20KIID/IE00BM67HW99/GB/EN) — DWS Investment S.A., 2026-04-14
9. [PS25/20: Supporting informed decision making: Final rules for Consumer Composite Investments](https://www.fca.org.uk/publication/policy/ps25-20.pdf) — Financial Conduct Authority, 2025-12-08

*Last updated 2026-10-23. A reference page, corrected in place — not a dated post.*