Remind me. What are the best index tracker funds?

Retired_Minky

As per the title. Looking for a low cost index tracker to drop my funds in to and forget about for the next 10 years.

brasso

There's no such thing as "the best" tracker. Most trackers are good, in the sense that they do a good job of tracking an index. But in terms of performance i.e. profit/loss over a period they will only reflect the underlying index. So even the 'best' FTSE tracker will still lose you a chunk of your money if the FTSE drops over an extended period. So maybe the question is which sector has consistently grown faster over time. And I don't know the definitive answer to that. Depends on period chosen. Certainly China has done very well over the last 6 months but it's dipped recently and may well continue to do so. But if you're prepared to take some risk then China / Emerging Markets will probably continue to flourish despite volatility.

For a general fund that's low cost, fairly conservative, rebalances regularly and reliable you could go for Vanguard Lifestrategy, and choose which equity percentage suits you. I tend to go for 100% equities but you might prefer a lower risk proportion -- though over 10 years I'd suggest that you're very likely to ride out any dips and outperform them. Another popular choice is Fundsmith which invests mostly in very dull but solid household stocks that depend on people continuing to buy certain products even in a recession. But much of this is personal preference and habit. Other people no doubt will have their own favourites.

eskbanker

Retired_Minky said:

Remind me. What are the best index tracker funds?

Tell us. Which index do you want to track?

Based on the vagueness of the question, I suspect that you'll perhaps be better with a global multi-asset fund instead of an index tracker as such - most of the leading players are compared at https://monevator.com/passive-fund-of-funds-the-rivals/, although it's a bit out of date now.

dunstonh

Remind me. What are the best index tracker funds?

The best ones are the ones that match your chosen investment areas.   No single fund house has the best trackers in all areas.  So, you really need to be more specific.

Retired_Minky

Yes. Just after a one stop track worldwide index fund.
Not sure I agree with the comment that there is no best. If two trackers match the exact same index and one has a lower fee surely that's better.
Thanks for the monevator link. That looks like what I'm after.

eskbanker

Retired_Minky said:

Yes. Just after a one stop track worldwide index fund.
Not sure I agree with the comment that there is no best. If two trackers match the exact same index and one has a lower fee surely that's better.
Thanks for the monevator link. That looks like what I'm after.

As above, I thought that's what you might be looking for, but in case the point was lost on you, those funds aren't index trackers, so it's generally better not to invest in anything until you have a better understanding of what you're getting into and the relevant terminology.

Even if you are talking about two trackers tracking the same index (and it appears that this isn't really what you're after) then it's not as simple as best equals cheapest - tracking error is one differentiator, there are differences between OEICs and ETFs, etc, etc....

dunstonh

Not sure I agree with the comment that there is no best.

So, you have someone needing a UK equity fund and a Japanese equity fund.       Which one fund is the best that covers those two areas.     

 If two trackers match the exact same index and one has a lower fee surely that's better.

What about tracking error?  Or the replication method?

In your case, you appear to want a 100% global equity tracker.  Would that be an ETF or an OEIC/UT? Or a pension fund or insured fund (latter unlikely).   Your platform may not offer ETFs or you may be with a provider with a restricted fund selection.   Or you could be with one that has the ishares on a superclean share class or with one that does not.  You could even still be on bundled share classes if you are using the pension wrapper.

Eyeful

1. Have a look here:  https://monevator.com/best-global-tracker-funds/

2. Your post suggests you are new to investing, so maybe you might like to look into a cheap Global Multi Asset fund as a first step. Something like:- 
https://www.assetmanagement.hsbc.co.uk/en/intermediary/investment-expertise/multi-asset/hsbc-global-strategy-portfolios#openTab=0

Retired_Minky

Thanks @Eyeful