5 Low Cost Trackers
What is an Index Tracker Fund
Index tracker funds, also known as index funds, are a type of mutual fund or exchange-traded fund (ETF) that tracks a specific market index, such as the S&P 500 or the FTSE 100. The goal of index tracker funds is to replicate the performance of the underlying index as closely as possible, providing investors with exposure to a diversified portfolio of stocks or other assets.
One of the main advantages of index tracker funds is their low cost compared to actively managed funds, as they require less research and management by fund managers. As essentially the managers are just buying the FTSE 100 for example to mirror it rather than looking to purchase shares that would outperform it.
Global Index Tracker Funds are the Best!
Global index tracker funds are the best in my opinion as rather than say just investing within the UK and being invested within the one geographic region you will be invested across a range of geographic regions. With the main weigthing towards the biggest economines such as North America. These funds are designed to provide investors with exposure to a broad range of international markets and can be a good way to achieve diversification.
It is important to note that investing in a global index tracker also carries some risks, including market volatility and the potential for losses. However, by investing for the long term and maintaining a diversified portfolio, investors can mitigate these risks and potentially achieve their financial goals.
A global index tracker can be a useful tool for investors who want to achieve broad market exposure and diversification across multiple countries and industries.
The Top Five Global Tracker Funds
The below top five have been chosen due to having the best performance over a period of 5 years or more and the lowest cost.
Legal & General Global 100 Index
The objective of this fund is to provide growth by tracking the performance of the S&P Global 100 Index, converted into Sterling. The fund will invest almost entirely in company shares. The fund's investments will closely match those that make up the Index. The Index consists of shares of the 100 largest multinational companies. The fund may use derivatives to reduce risk or cost, or to generate additional capital or income with no, or an acceptably low, level of risk.
Performace over 5 years - 84.74%
Ongoing Charge - 0.09% pa
Historic Yield - 1.8% pa
Fidelity Index World
The Funds investment objective is to achieve long term capital growth by closely matching the performance of the MSCI World Index. The ACD will aim to hold securities that represent the MSCI World Index (or in the event of this index ceasing to be compiled such index as the ACD may deem appropriate). In order to manage the cash position of the portfolio, the ACD may utilise stock index futures as allowed by the regulations.
Performace over 5 years - 56.51%
Ongoing Charge - 0.12% pa
Historic Yield - 1.7% pa
Vanguard FTSE Developed World ex-UK Equity Index
The Fund seeks to track the performance of the FTSE Developed World ex U.K. Index. It invests in medium to large companies across the world with holdings of 2,056 excluding the UK.
Performace over 5 years - 55.94%
Ongoing Charge - 0.14% pa
Historic Yield - 1.63% pa
Legal & General International Index Trust
The objective of this fund is to provide growth by tracking the performance of the FTSE World (ex UK) Index. The fund will invest almost entirely in company shares. The fund's investments will closely match those that make up the Index. The Index consists of a broad spread of company shares from around the world (excluding UK companies). The fund may use derivatives to reduce risk or cost, or to generate additional capital or income with no, or an acceptably low, level of risk. The fund may also invest in cash or cash-like investments and other funds.
Performace over 5 years - 55.76%
Ongoing Charge - 0.13% pa
Historic Yield - 1.9% pa
Aviva International Index Tracking
To track the total return (after charges) of the FTSE® World (ex UK) Index. To invest in international equities employing a combination of sampling and full replication strategies across equity markets which comprise the FTSE® World (ex UK) Index. The Fund may invest in any of the following financial instruments in order to achieve its investment objective: transferable securities, money market instruments, units in collective investment schemes, deposits and derivatives and forward transactions.
Performace over 5 years - 52.94%
Ongoing Charge - 0.25% pa
Historic Yield - 1.7% pa
Overall, index tracker funds can be a useful tool for investors who want to achieve broad market exposure and diversification at a low cost
