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index tracker funds

Index tracker funds

Find out about tracker funds below or see a list of our favourite tracker funds View our favourite tracker funds
Important information - The value of investments can fall as well as rise, so you could get back less than you invest. If you are at all unsure of the suitability of an investment for your circumstances, please seek advice. Once held in a pension money is not usually accessible until age 55 (rising to 57 in 2028).

Index tracker funds have become increasingly popular in recent years. It’s easy to see why – they provide instant diversification in one simple, low-cost investment.

Instead of trying to outperform a particular stock market or index, they aim to closely track its performance, often by simply investing in every stock in the index they’re tracking. This is in contrast to an actively-managed fund that will aim to beat the performance of an index.

They’re one of the simplest ways to invest, and as there’s no manager or analysts to pay, they’re often available at an extremely low cost (platform charges also apply).

There’s plenty of choice too – from funds tracking UK markets to those focusing further afield. Tracker funds can be held in any of our investment accounts, including a Stocks and Shares ISA, Lifetime ISA (LISA), Self-Invested Personal Pension and a Fund and Share Account.

Wealth 50 Trackers

To help narrow down the choice we have selected our favourite tracker funds across the major sectors.

Annual charges
Ongoing charge (OCF/TER)Ongoing savingNet ongoing charge
HSBC FTSE 250 Index (Class S) (Acc)
FTSE 250 Index
0.18% 0.10% i 0.08%
iShares Corporate Bond Index (H) (Acc)
iBoxx GBP Non-Gilts Overall TR Index
0.17% 0.05% i 0.12%
iShares Emerging Markets Equity Index (H) (Acc)
FTSE All-World Emerging Index
0.26% 0.02% i 0.24%
iShares Japan Equity Index (H) (Acc)
FTSE All-World Japan Index
0.16% 0.05% i 0.11%
iShares Pacific ex Japan Equity Index (H) (Acc)
FTSE World Asia Pacific ex Japan Index
0.20% 0.05% i 0.15%
Legal & General All Stocks Gilt Index Trust (C) (Acc)
FTSE Actuaries UK Gilts All Stocks TR Index
0.15% 0.05% i 0.10%
Legal & General European Index (Class C) (Acc)
FTSE World Europe ex UK Index
0.12% 0.05% i 0.07%
Legal & General International Index Trust (C) (Acc)
FTSE World (ex UK) Index
0.13% 0.05% i 0.08%
Legal & General UK Index (Class C) (Acc)
FTSE All Share Index
0.10% 0.06% i 0.04%
Legal & General US Index (Class C) (Acc)
0.10% 0.04% i 0.06%

Funds are listed in alphabetical order.

Find out more about our Wealth 50 Trackers

Most popular index tracker funds

Below are the most popular funds chosen by our clients in February 2019 (by net buys), listed in alphabetical order. This information is provided for your interest and is not a guide to how you should invest. Regular savings are not included.

HSBC FTSE 250 Index

iShares Emerging Markets Equity Index

Legal & General International Index Trust

Legal & General UK Index

Legal & General US Index

Search for index tracker funds

View all index tracker funds

Index tracker research

Frequently asked questions

  • Most trackers tend to fully replicate an index. For example, a fund tracking the FTSE100 index will buy shares in all 100 companies. The size of each company within the fund will be proportionate to its size within the index.

    Alternatively, tracker funds can partially replicate the index. This is where the manager holds a sample of shares which are considered to be representative of the wider index. This often occurs when the index being tracked is difficult or costly to fully replicate.

  • An active fund will invest in just several companies in the index, perhaps as little as 30-40 in some cases, and the aim is to select the companies with the best potential in order to deliver performance that is much better than the index over the long term. This approach is more complex than simply tracking the index. It involves a great deal of research and costs are higher.

    It can be difficult to unearth active fund managers capable of consistently outperforming an index but we believe the highest-calibre fund managers share a specific set of skills and attributes. We seek those with a long, demonstrable track record of adding value by skill rather than a few lucky decisions. Our favourites can be found on the Wealth 50.

  • An index is a basket of shares that represents the performance of a stock market. So, for example, the FTSE 100 is an index that contains the largest 100 companies listed on the UK stock market. Most major markets have indices that can be used to track their performance, for example the S&P500 in the US. Normally these indices are run by an independent company who sets the rules on what is included and what proportion of the index each company represents. Often the biggest, most widely traded companies are the biggest holdings in the index.

  • Yes - most tracker funds come as either income or accumulation units. With income units, income is paid out to fund holders as cash. This could provide you with an income stream or the cash could be reinvested to buy additional units. With accumulation units income is retained within the fund and reinvested, increasing the price of the units. Generally, for investors who wish to reinvest income, accumulation units offer a more convenient and cost-effective way of doing so.

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