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ISA Index Tacker Charges - please help

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  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Post of the Month
    Interesting that we should be talking of less than 1% on fees, when the underlying asset is Down by 20% plus !

    Well, as the OP decided he wanted an investment which would deliver the result of the FTSE UK All Share index... he would probably be quite happy that his fund went down by 20% if the underlying assets went down by 20%. Because delivering the performance of that index up and down is literally the whole point of buying a fund that has the objective of tracking that index.

    As there are lots of funds which attempt to track the index, if you decide that "the return of the index, less the running costs, please" is what you want, then it makes sense to use one with low running costs and accurate tracking.

    1% doesn't sound like much, but 1% on a growing balance for 100 years will be more than the entire value of your original investment, so it is worth being aware of the costs and minimising them.

    Whereas, it is well known that the index can go up and down by 20% or even 50% in a relatively short space of time, and indeed it is your objective that your fund value falls when the index falls (that's why you chose an index tracking strategy against all the other options) - so that is not something that really causes concern.

    In fact, if you invest in a tracker fund that only falls 2% when the index it is trying to track falls 20%, it is a very poor fund and you should consider selling it immediately for failing to meet its objectives.
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