Just as a twirlable moustache and a sinister laugh means you’re dealing with a villain, fund names instantly reveal much about the nature of an investment.1
Learn how to decode fund names and you can quickly parse product lists, rapidly spot index funds and ETFs, and save time finding what you want.
Here’s a typical fund name and what it means:
Let’s break the formula down.
Fund provider
This is the asset management firm who created the product. In the UK, the main players issuing index trackers are:
- Vanguard
- BlackRock aka iShares
- Fidelity
- Lyxor
- Amundi
- State Street aka SPDR
- HSBC
- Legal & General
The provider’s name may be twinned with a sub-brand. For example: iShares Core.
Core ETFs are often low-cost entries in a provider’s range, although that’s not a hard and fast rule.
Asset class
The main asset class usually reveals whether you’re getting into equity (stocks and shares) or bonds. If the fund name doesn’t suggest an asset class then you’re probably looking at an equity fund.
The sub-asset class shows where the fund’s assets are concentrated. For a broadly diversified equity fund this is typically a geographic region. For example: the Developed World.
Specialised funds will often pair the region with a tilt to an investment style, such as Global Small Cap.
The sub-asset class may be preceded by the name of the index tracked by the product. As in: Vanguard FTSE 100 UCITS ETF. That tells you the ETF tracks the largest 100 companies listed on the London Stock Exchange.
FTSE, MSCI, S&P, Stoxx and Bloomberg Barclays are the big index providers. They are often referenced in tracker names.
Bond maturities
A bond tracker’s name often signals the maturity dates of its holdings:
- iShares UK Gilts 0-5 UCITS ETF. This ETF holds UK government bonds (gilts) that will mature in up to five years. Five years and below indicates the sub-asset class is short-dated UK government bonds.
- SPDR Bloomberg Barclays 15+ Year Gilt UCITS ETF. This ETF hold gilts that mature in 15 years or more. Anything over 15 years is a long-dated bond holding.
The giveaway – Most but not quite all index funds pop the word index or tracker into their name to make things slightly easier.
Active fund names don’t feature indexes, but not all trackers do either.
Share class
A single fund may offer itself in more guises than Zeus, as denoted by its share class. Instead of turning up as a bull or swan like a Greek god, a fund simply puts some letters in its name (e.g. Class A or D or I) to indicate that exactly the same product is available at different costs.
Index funds tend to be limited to three types:
- Retail – Available to individual investors like you and me. The fund name may include the abbreviation Ret instead of a share class letter.
- Institutional – Available to pension funds and the like. Sometimes available to you and me when a deal has been cut between the fund provider and a particular broker. Inst funds are cheaper than their retail counterparts.
- Platform exclusives – Some fund managers furnish large online brokers like Fidelity and Hargreaves Lansdown with slightly cheaper versions of their index funds. The fund will offer a small discount on its annual charge but will otherwise be the same fund that’s found everywhere else bar an ‘exclusive’ letter designation in its name.
Share class letters have specific meanings in the US. That doesn’t apply here in the UK, where classification notation is all over the shop.
Income treatment
There are two varieties: Accumulation and Income.
Accumulating funds reinvest your dividends and interest back into the product without you lifting a finger.
Income funds pay out dividends and interest as cash money into your broker account. You can then reinvest or spend at your leisure.
Accumulating funds are also termed ‘capitalising’ and usually contain one of the following abbreviations:
- Acc
- A
- C
- Cap
Income funds are also known as ‘distributing’ and may feature these abbreviations:
- Inc
- D
- Dis
- Dist
UCITS regulated
You’ll notice most ETFs include the abbreviation UCITS. This memorable acronym refers to EU regulations that enable funds to be sold across European markets.
UCITS funds are meant to maintain certain standards that protect retail investors, such as a minimal level of diversification.
UCITS rules also apply to index funds.
Non-European ETFs are not governed by UCITS regulations. Neither are other exchange-traded products like ETCs (Exchange Traded Commodities).
Take the hint. Exercise caution and conduct more research on non-UCITS products.
There is now a UK UCITS standard that facilitates post-Brexit harmony.
Other info
As we hit the tail end of a product’s name, you may see a cavalcade of cryptic codes, scattered around at the provider’s whim.
Some ETF names are gilded with their replication method.
For example: Lyxor Core MSCI World (DR) UCITS ETF – Acc.
DR stands for direct replication and indicates that the ETF physically holds the securities in the index.
The alternative is a synthetic ETF that’s occasionally signalled by the word ‘Swap’.
ESG stands for Environmental, Social, and Governance. ESG funds are meant to favour companies that make an effort to reduce the harm they inflict on the planet. Mileage varies.
Currency
ETF fund names often quote a currency, such as GBP, USD, or EUR. As in the Vanguard FTSE Emerging Markets UCITS ETF (USD).
The USD label typically tells you the fund’s base currency and may also tell you its trading currency.
Base currency is the currency a fund reports its Net Asset Value (NAV) in. It distributes its dividends in this currency, too.
Trading currency is the currency an ETF is traded in on the stock exchange. Usually the London Stock Exchange for ETFs available via UK brokers.
If an ETF’s base currency is not GBP – you’ll be charged FX fees on the dividends you receive (assuming it distributes income).
If it’s trading currency is not GBP – you’ll incur FX fees on every buy and sell.
Check out your ETF’s base currency on its homepage. Base currency may also be called denominated currency or fund currency.
Its price and dividend distributions will be reported in its base currency.
Check the ETF’s entry on the London Stock Exchange website to see its trading currency. You’ll be able to see which currency recent trades were made in.
Currency hedging
Choosing a fund with GBP in its name doesn’t protect you from currency risk.
Funds that are GBP hedged do neutralise the risk of swings in foreign exchange markets.
Most providers helpfully mention currency hedges in the fund name.
For example: Xtrackers Global Government Bond UCITS ETF 2D GBP Hedged.
This ETF hedges its return to the pound. Its returns to UK investors should be mostly unaffected by jostling in the currency markets.
Incidentally, 2D in this name refers to the share class.
Domicile
You’ll occasionally see the letters IE, IRL, LU, or LUX dropped into a name.
That’s because Ireland and Luxembourg offer favourable witholding tax rates if a fund is based there.
Some providers use that as a selling point. You won’t see less competitive tax jurisdictions being flagged, however.
You can confirm your fund’s domicile using its International Securities Identification Number (ISIN).
ISIN numbers contain a handy two-letter country code, which helps you recognise your product’s domicile:
- IE = Ireland
- GB = Great Britain
- LU = Luxembourg
- FR = France
- US = US
- NL = Netherlands
- DE = Germany
- CH = Switzerland
- CA = Canada
- GG = Guernsey
- IM = Isle of Man
- JE = Jersey
An ISIN number looks something like this: GB00B59G4H82. The GB means this fund is resides in good old Blighty.
It’s less well-known that the Irish and Luxembourgian investor compensation schemes are less generous than the UK’s.
Whatever you do, record the ISIN number of the fund you’re interested in.
This catchy number is the one way I’ve found to reliably distinguish between fund versions, and ensure I buy the right one when I place an order.
More to know than fund names
Want to learn more?
- How to read a fund factsheet.
- How to read a bond fund webpage.
- Our best global tracker fund (equity) recommendations.
- Find the best bond funds.
- Ideas for the cheapest index trackers.
Take it steady,
The Accumulator
- An ETF is a type of investment fund, so I’ll use the term ‘fund’ when referring to generic characteristics shared by traditional funds and ETFs alike. [↩]
Comments on this entry are closed.
Great post for newbies to investing! I do the same thing with ISINs – it’s the best way to avoid mishaps 🙂
RT, RT, RT!
Cheers, Chris
Hi TA
A useful educating post as always. Dpending on what your trying to do M&G could also be worth a look for UK and European Equity Trackers. TER is a bit higher than some for the fund itself but the benefit they bring to the table is you can buy direct from them in an ISA. This could save you on total costs if you also have expenses associated with an ISA platform provider (H-L to name just one example).
Might be one for readers early on in their investing careers with relatively small sums. Probably wouldn’t be competitive for people with reasonable sums invested.
Full disclosure: I don’t currently have any M&G Trackers but have in the distant past.
Cheers
RIT
The TD-branded version of the Morningstar fund search now allows you to filter to only trackers:
http://lt.morningstar.com/e4e1fvybwy/fundquickrank/default.aspx
I do wish the various managers could agree on a share class naming convention though!
Hi TA,
Just wondering if you knew what type of class things are via their letter?
I’m on TD Direct and did a search for the Vanguard LifeStrategy on the regular investment options and various come up but have no indicator. If I do a fund search on the TD site it comes up with Vanguard LifeStrategy 80% Equity A Acc.
I previously read back in May one of your articles saying they aren’t available and haven’t seen anything to the contrary, so I’m guessing it might not be for a small time passive investor, but it would be great to know, i’d be quite happy to just put my savings into one of those as a super lazy passive investor!
1. Good stuff, as ever. Thank you.
2. Knowing the ISIN isn’t always sufficient, however. An ETF with a given ISIN can be available in different trading currencies e.g. GBP/USD. Although each version has its own exchange code (ticker), all share the same ISIN.
3. This became a problem for me when transferring-out my portfolio from II (remember them?) in the summer. One of the ETFs appeared on my new broker’s platform in a new trading currency, without my intervention.
4. Names of active funds can be much more fun and racy than those of passive ones: focus, aggressive, alpha, alpha plus, dynamic, select, etc. Only a loser would settle for a boring, plodding tracker instead…
@ RIT – very useful tip and may well come in handy for buying HSBC index funds through their Global Investment Centre if other platforms adopt platform fees.
@ Simon – great find, thank you for that. That’s now the definitive index fund screener.
@ Oliver – you can tell if you research what an individual fund firm means by its particular designation. However, it looks like the LifeStrategy funds are now available through TD. I’m having some trouble with it myself, but other readers report confirmation from TD.
@ Alex – good point about ISIN codes re: ETFs. You don’t get me this time though as I was only referring to index funds [phew]. But seriously, well worth pointing out.
Re: names, I do love buying a fund with a cool ticker too. e.g. RICH or WIN or SCAM.
I generally avoid funds since I personally think they are dull (Yes, I know they can be useful and I will invest in more of them one day in far future). So it is good to see how funds’ names are explained!
I got rather similar feeling about tickers with shares. It is a strange quirk that at the moment, all my sustainable companies’ tickers are words in their own right. Ace, Eden, Good and One.
A good guide to the nomenological wilderness of passive fund names.
Some funds do not specifically mention an index because they can then avoid the outrageous fees charged by the index provider. A good way of reducing costs is to bypass the guys that run the index.
So the fact that an index is not mentioned in the name does not mean it is not a passive fund.
Of course you can get then get into a fine theological debate about what you mean by passive. But that is a topic all on its own.
Another point to note is that IMA list only includes members of the IMA. Not all fund managers are. Another avoidable cost.
Thanks Rob, how come the Monro fund doesn’t appear on the TD Direct branded Morningstar list of trackers? I guess the obvious answer is that TD Direct don’t offer the fund, but I don’t think that their Morningstar fund is that selective.
Like DFA the fund is not directly Benchmarked to an index. That means some platforms don’t include it as a tracker.
It also may be because the fund is not rated by Morningstar.
@ Simon – many thanks!
Thanks for this TA. I find it can be very difficult to be sure I’ve drilled down to the right product with funds and ETFs, despite now having developed some ability to scrutinize their names carefully. The biggest points I struggle to be sure on are:
– The share class I ought to buy – sometimes this is apparent, but often not, as you’ve covered in the article. I have occasionally found definitive answers in the prospectus for a fund, but these can be impenetrably opaque with some companies. Any chance of an abbreviated table of share class labels for the main UK providers like your platforms one?
– Knowing for sure that there is no Acc version of a fund. I have a couple of funds / etfs that I was unable to identify Acc types for, only Inc. My guess is this is because they are, say, trackers across many countries and currencies and it is cheaper or more practical to just provide a distribution class, but it feels like there ought to be an Acc.
– Choosing the appropriate currency option. Some funds seem to be quoted in £ but the investments are in $ and at the same time you can choose to buy the same thing in $, then on top of that you have funds in local currency. Very baffling.
@RIT I used to have M&G funds, but have sold them all because of poor customer service. They had 2 account numbers for me due to an admin cockup which they could never resolve, made a complete mess of a multi-instruction letter, and their lack of online dealing and account management became very frustrating. And their quarterly statements came in multi-page thick paper booklets that were a pain to file, you could tear out some, but not all, of your personal information, just daft.
@ IanH – my rule of thumb for share classes is: buy the cheapest one available! The currency option makes no difference. They’ll invent £ versions of funds because it makes UK investors more comfortable but it’s the underlying currency of the shares that counts. In other words, shares bought in the US expose you to the dollar and nothing can change that, whether the fund reports in £ or not. Re: acc vs inc – normally I just check on the fund providers website. There’s even a few now that are acc only.
Following today’s news, I’m shifting out of funds and into Marmite! P.S. Don’t blame me, I voted remain 🙂
@TA,IanH: re ETFs with multiple currency denominations, on Alliance Trust Savings, at least in a SIPP (and I think ISA too), it only seems to possible to buy the GBP denominated units; further, on the couple of occasions I’ve asked for a particular ETF to be made available on the platform, for one of them I was told it wasn’t an option because there was no GBP-denominated version (the other one was fine and was promptly made available). No idea whether it’s a restriction of the platform or some regulatory stuff around the wrapper… but at one point a couple of ETFs were merged into some other ETF and the units they were merged into were only available USD… and the platform seems to be happy for me to continue to hold them and even reinvest (although all the values it reports for them are all GBP-ed).
@TA and Anon
Thanks for the feedback.
TA – yes – I always try adn get the cheapest too. Also I guess the practice I follow is that if the platform lets me purchase in a particular share class then it is OK to do so.
re currencies. I think I see the point that only the base currency matters. I guess what I was wondering was if the currency volatility is added onto the shares volatility if you buy $ denom shares in £.
@Anon – re having to use £ in your SIPP – it could be you have to use your trading account and open a foreign currency account to trade using actual $. Like you I’m only trading in my ISA/SIPP though.
Only the base currency counts. Buying the $ version instead of £ version makes no difference. This piece explains: http://monevator.com/currency-risk/
Anon – the restrictions you’re discovering at AT – that must be platform related. There are other brokers offering non-£ versions.
There are a few other “giveaway” keywords that crop up in fund names that could usefully be included in this analysis:
Dynamic -> Steer clear
Alpha -> Excuse me?
Strategic -> Not a chance
Aggressive -> Really?
Something else that might be worth noting is if you have the funds in a non-tax privileged account and have to declare any movements for CGT I think you have to declare IExxxxx funds/etfs as foreign, as opposed to GBxxxx, which involves more admin even if denominated in GBP. Having seen this is someone else’s tax return I am thankful my equities are all in ISAs and also makes me leery of holding unwrapped equities in a mix of GB and IE
That’s interesting, Ermine. Certainly you’d want to make sure your offshore funds have UK reporting status – which most index funds and ETFs do – or else you’d pay higher rates of tax and income and CGT.
Does anyone have direct experience of the admin burden for offshore funds outside of tax shelters?
@ Torus – haha, that’s an excellent piece of fund name decoding.