Začínáme s investováním
ETF, ISIN, TER, Acc/Dist — abbreviations explained clearly
Key takeaways
- ISIN is a unique code for every security — like a personal ID number for stocks and ETFs.
- TER (Total Expense Ratio) is the annual management fee of an ETF — the lower, the better.
- Acc (accumulating) ETFs automatically reinvest gains, while Dist (distributing) ETFs pay dividends in cash.
- UCITS is a European fund safety standard that protects investors — always look for it in an ETF's name.
When choosing an ETF you will encounter many abbreviations — here we explain the most important ones, one by one.
ETF — Exchange Traded Fund
ETF stands for a fund traded on a stock exchange. It is a basket that holds dozens, hundreds, or thousands of shares at once. Buy one unit of an ETF and you own a tiny slice of every company in that basket. An ETF tracks an index — for example the US S&P 500 or the global MSCI World. Read more in the article Stocks, fund, ETF — the difference made simple.
ISIN — international identification number
ISIN (International Securities Identification Number) is a unique twelve-character code for every security. It looks like this: IE00B4L5Y983. Using the ISIN you can find exactly the fund you are looking for — fund names can be similar across multiple products, but the ISIN is always unique.
- It starts with a two-letter country code (IE = Ireland, LU = Luxembourg).
- Most UCITS ETFs available in Europe have an Irish ISIN starting with "IE".
TER — total expense ratio
TER (Total Expense Ratio) is the annual management fee of an ETF, expressed as a percentage. For example, a TER of 0.20% means you pay CZK 20 per year for every CZK 10,000 invested in that fund. The fee is not deducted from your account — it is automatically reflected in the fund's price. Passive ETFs typically have a TER of 0.05–0.50%. The lower the TER, the more of the return stays with you.
Acc vs. Dist — what happens to dividends?
Acc (accumulating) ETFs collect dividends and automatically reinvest them back into the fund. The fund grows faster and you do not have to do anything.
Dist (distributing) ETFs pay dividends in cash to your account. Read more about the pros and cons in the article Accumulating vs. distributing ETF.
FAQ
Where do I find the ISIN of a specific ETF?
The ISIN is always stated in the Key Information Document (KID/KIID) that every fund must publish. You can also find it on the fund manager's website (iShares, Vanguard, Amundi) or within your broker's platform — just search for the fund name.
Is TER the only fee I will pay?
No. TER is the fund's own fee, but you also pay the broker a transaction fee for buying and selling. Some brokers also charge an account maintenance fee. Always read the full fee schedule before opening an account.
Why do most recommended ETFs come from Ireland?
Ireland has favourable tax treaties with the United States, so ETFs registered in Ireland pay lower withholding tax on US dividends. For a European investor that means a higher net return. That is also why most popular UCITS ETFs start with the code "IE".