Accessing Top tracker in a junior isa?

Tony_gill

So as a novice I've spent a little while trying to gain information on a good tracker fund for my twins but while this info sees to be easily found ie the telegraph:
"The top five FTSE 100 trackers were Lyxor UCITS ETF FTSE 100, iShares FTSE 100 UCITS ETF, Santander Stockmarket 100 Tracker Growth, Source FTSE 100 and HSBC FTSE 100."

The next step is finding a company that has low fees I can then set up a regular investment!
When I search the usual suspects ie cavendish , the share centre and a few others I don't seem to be able to access these funds?

Is this just me or am I making an obvious mistake?

Tony

xylophone

http://www.thisismoney.co.uk/money/investing/article-1583915/A-guide-cheapest-index-tracker-funds.html

http://monevator.com/how-to-buy-index-trackers/

http://monevator.com/compare-uk-cheapest-online-brokers/


First look up the investment in Trustnet to find the EPIC/ISIN/SEDOL
Citicode.

Take HL for example - look for ETFs in share prices and stockmarkets and OEICS/Unit Trusts in Fund prices and research.

http://www.hl.co.uk/shares/search-for-investments?stock_search_input=L100&x=17&y=17&category_list=CEHGINOPW

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=B4FV3&univ=E

xylophone

Don't forget to check whether your chosen platform offers a JISA.


http://www.thisismoney.co.uk/money/investing/article-1587994/Junior-Isa-Child-Trust-Fund-How-save-invest-children.html

https://www.gov.uk/junior-individual-savings-accounts/overview

Rosie1980

Thank you for the question and answers as this is my exact question too. Although I would also like to add, I know that trackers seem to be a good easy way to invest money as I have little knowledge of the stock market or the time to follow it and from what I've read trackers seem to do as good a job if not better than actively managed funds. However how do you know whether a tracker is any good?

xylophone

http://monevator.com/low-cost-index-trackers/
might be worth a look.

bowlhead99

Rosie1980 wrote: »

However how do you know whether a tracker is any good?

The purpose of a tracker is to track (i.e. deliver the same performance as) an index.

The two main success factors are:
a) what amount of fees are charged, and
b) how efficient/sophisticated its computer models are, to allow it to handle the buys and sells necessary to cope with changes in the index constituents at the exact right times, and to cope with the deployment of new money from investors and redemption by investors while overall still replicating the return of the underlying index.

The combination of 'a' (ideally, low fees) and 'b' (ideally, low 'tracking error') will make a tracker fund good or bad at its objective which is to deliver the same return as the index. You should be able to look at a performance chart or table of the fund returns, versus the underlying benchmark index returns. If they are the same or very similar over a long period of time and for a lot of individual time periods, you can see that they are doing their job well.

Fund factsheets will always show the fees / ongoing charges forecast which should allow you to eliminate the worst ones from your decision making. They will not usually show their target for, or estimation of, the tracking error, though these are sometimes described in the prospectus or other reports. However, simply comparing their returns to the index should allow you to assess how large or small the tracking error is.

Sometimes, the fund will beat the index. As the basic target is to equal the index, a return above the index will often imply an error or a management judgement that happened to work out OK this year and could just as easily have been in the other direction next year, so does not mean it is a better fund.

Of course, whether a tracker is good at its job is a different question from which trackers and other funds you would like to hold in your portfolio. For example, there might be a really good (at tracking the index) FTSE100 tracker out there, but when constructing your portfolio you might decide you don't want a FTSE100 tracker at all and would prefer to track the FTSE250 or FTSE UK All-Share or FTSE All-World. One asset class or geographical region might give a return that is 40% different to another, so a management fee difference of 0.2% or tracking error difference of 0.2% is only useful when comparing between funds that track the same index, and not between funds that are set up to do different things.

Rosie1980

That's really helpful, thank you for your informative post.