5 more index tracker funds I love

Index tracker funds can be among some of the smartest investments around. Here are five of my favourites.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Horror stories such as the recent Woodford funds debacle will only serve to make index tracker funds more popular, I reckon.

The problem with trusting a fund manager with your investment money is that it’s hard to pick a good one. Who’d have believed just a few short years ago that a previously successful manager such as Neil Woodford, with a robust reputation for outperforming the market, would crash and burn so spectacularly?

Yet even less dramatic underperformance can drastically affect your long-term investing outcome, because high ongoing fees levied by managed funds make it harder to earn positive returns from your fund investments.

The solution for many private investors is to go it alone and pick their own shares. But thousands of others participate in the index tracker fund ‘revolution’. Indeed, there has never been such a wide range of these low-cost, passive, and uncomplicated investment funds available, and they are easily accessed via platforms such as that offered by Hargreaves Lansdown and others.

Here are five of my favourites. Each offers a particular approach to investing in the stock market and they are all run by solid and well-known investment firms.

HSBC FTSE 250 Index

The UK’s FTSE 250 index is made up of the 250 largest companies, after the 100 largest (which are in the FTSE 100 index) stock-market-listed companies in the UK. This fund aims to follow the performance of the index by investing in the shares of all the companies in it.

Generally, we can aim for more growth with the FTSE 250 than we can with the FTSE 100.

Vanguard FTSE UK All Share Index

If you want to widen your fund investment to cover more of the UK stock market, this tracker does the job. It follows the fortunes of the FTSE All-Share index, which includes firms with large, medium and small market capitalisations.

It aims to track the performance of the index by investing in a “representative sample of index constituent securities.”

Legal & General European Index

Looking beyond the markets in the UK, you can follow the fortunes of the FTSE World Europe ex UK Index with this fund, which excludes firms in the UK. The fund seeks to replicate the index, which includes firms with middle and large market capitalisations in the developed and advanced emerging markets in Europe.

Vanguard US Equity Index

You can track the fortunes of well-known US stock market names such as Microsoft, Apple, Amazon, Facebook and many others with this tracker, which aims to replicate the performance of the Standard and Poor’s Total Market Index.

The index has firms with market capitalisations in the full range from micro to large. And the fund tracks the performance of the index by investing in a representative sample of constituent stocks.

Legal & General Global Technology Index

You can focus your investment in the area of information technology with this tracker. The objective of this fund is to provide growth by tracking the performance of those companies in the FTSE World Index that are engaged in information technology activities. 

That remit includes some of the largest companies in the world, and if you think the sector is set to continue its outperformance, this could be the tracker for you.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Kevin Godbold has no position in any share mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool UK has the following options: long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, and long January 2021 $85 calls on Microsoft. The Motley Fool UK has recommended Amazon, Apple, Facebook, Hargreaves Lansdown, and Microsoft. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Can Rolls-Royce shares keep on soaring in 2025?

2024 so far has been another blockbuster year for Rolls-Royce shares. Our writer thinks the share could still move higher.…

Read more »

Mindful young woman breathing out with closed eyes, calming down in stressful situation, working on computer in modern kitchen.
Investing Articles

Here’s the worst thing to do in a stock market crash (it isn’t selling)

When the stock market falls sharply – as it does from time to time – selling is often a bad…

Read more »

New year resolutions 2025 on desk. 2025 resolutions list with notebook, coffee cup on table.
Investing Articles

My top 2 growth shares to consider buying in 2025

For investors looking for top growth shares to buy in the New Year, I reckon this pair are well worth…

Read more »

Investing Articles

3 massive UK shares that could relocate their listing in 2025

I've identified three UK companies that may consider moving their share listing abroad next year. What does this mean for…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

2 common mistakes investors make with dividend shares

Stephen Wright outlines two common mistakes to avoid when considering dividend shares. One is about building wealth, the other is…

Read more »

Investing Articles

Here’s how I’ll learn from Warren Buffett to try to boost my 2025 investment returns

Thinking about Warren Buffett helps reassure me about my long-term investing approach. But I definitely need to learn some more.

Read more »

Businessman use electronic pen writing rising colorful graph from 2023 to 2024 year of business planning and stock investment growth concept.
Investing Articles

Here are the best (and worst) S&P 500 sectors of 2024

While the S&P 500 has done well as a whole, some sectors have fared better than others. Stephen Wright is…

Read more »

Investing Articles

2 FTSE 100 stocks I think could be takeover targets in 2025

If the UK stock market gets moving in 2025, I wonder if the FTSE 100 might offer a few tasty…

Read more »