Tracker Funds | Barclays Smart Investor (2024)

Why invest in Tracker funds?

Instead of having a manager who tries to pick investments to beat the markets, tracker funds – also known as passive or index funds – simply follow the overall performance of a particular market or index, such as the FTSE 100.

As they’re run using computer algorithms rather than with costly research and managers, these funds are significantly cheaper than the equivalent actively managed funds, and offer an attractive cost-effective option to use as a key part of a diversified portfolio. But it’s important to understand that unlike an actively managed fund, a tracker can never outperform the market or index it is linked to – as the name suggests, it will only ever follow it.

So if the FTSE 100 rose by 5% over the course of a year, a FTSE 100 tracker would go up by just under 5% once the annual fund charge had been factored in. Similarly, if the FTSE 100 fell by 5%, the value of your investment would fall by just over 5% because of the fund cost and charges.

How do we select our tracker funds?

Because a passive fund doesn’t try to do any more than track the performance of the market it follows, we believe there’s no reason to pay more than you need to. The tracker funds on our Funds List are selected solely on cost – those featured are simply the cheapest available tracker fund we offer in each sector where a relevant product is available . The funds included in this selection are reviewed every six months, in June and December. To see any changes to the list, please check our additions and removals page.

Our 13 Fund Sectors are:

• Asia ex-Japan
• Emerging Markets
• ESG
• Europe
• Global Bonds
• GlobalEquity
• Japan
• North America
• Specialist
• Sterling Bonds
• Targeted Absolute Return
• UK Equity - Growth
• UK Equity - Income

It’s important to fully understand what you’re investing in, so please make sure you do your own research and, in particular, investigate the fund’s key details on the fund factpage linked from the fund name. Make sure you read the Key Investor Information Document (KIID) found there when making your decision on investing. There is also a fund factsheet that you might find useful. If you’re not sure about anything, please seek professional advice.

Ongoing cost and KIID risk scores shown are correct from the fund manager KIID documents as at June 2023. As these can change, please check the latest KIID.

Why are KIID risk score and ongoing costs important?

iShares Pacific ex Japan Equity Index Fund

Ongoing cost: 0.11% / KIID risk score:6

Fidelity Index Emerging Markets Fund

Ongoing cost:0.20% / KIID risk score:6

iShares Continental European Equity Index Fund

Ongoing cost: 0.06% / KIID risk score: 6

Vanguard Global Bond Index Fund

Ongoing cost: 0.15% / KIID risk score:3

Fidelity Index World Fund

Ongoing cost: 0.12% / KIID risk score: 6

iShares Japan Equity Index Fund

Ongoing cost: 0.08% / KIID risk score: 6

iShares US Equity Index Fund

Ongoing cost:0.05% / KIID risk score: 6

iShares Corporate Bond Index Fund

Ongoing cost: 0.11% / KIID risk score:4

iShares UK Equity Index Fund

Ongoing cost: 0.05%/ KIID risk score:6

iShares 100 UK Equity Index Fund

Ongoing cost: 0.06% / KIID risk score:6

HSBC FTSE 250 Fund

Ongoing cost: 0.37% / KIID risk score:6

Vanguard FTSE UK Equity Income Index Fund

Ongoing cost: 0.14% / KIID risk score:6

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The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circ*mstances.