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Low-cost index funds UK

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This is our list of low-cost index funds and ETFs that’s kept updated to enable investors to find the cheapest index trackers available in the UK.

You can select from these funds to build a diversified portfolio that, as part of a passive investing strategy, will help you achieve your investing objectives. 

We focus on value and cost in this list because crushing charges is a core component of wise investing. Every pound you save in fees is a pound that snowballs over the years and speeds you towards your financial goals.

Our piece on management fees explains how even small savings add up to a big difference.

The growing recognition of the importance of investment fees has driven explosive growth in low-cost index funds and Exchange Traded Funds (ETFs) over the past 20 years.

These two types of index tracker are the best value investment vehicles available in the UK and the right choice for passive investors.

Low-cost index funds UK – the Total Cost of Ownership

Our cheapest tracker fund UK list is divided into the key sub-asset classes you may wish to invest in.

The picks per asset class are ranked by their Total Cost of Ownership (TCO).

The TCO is the sum of a fund’s transaction costs and its Ongoing Charge Figure (OCF).

Many outlets will only reveal a fund’s OCF (or Total Expense Ratio) but that misses out a significant chunk of cost embodied by its less well publicised transaction cost figure. 

Transaction costs are the fees and taxes that all investment funds inevitably incur when trading their underlying assets.

We think it’s important to include transaction costs when considering your shortlist because these charges can rival the OCF in particular sub-asset classes. 

Note: fund costs are a complex and confusing area so we’ve got a few more notes about fees after the main list below. 

In the meantime, let’s go grab some bargains!

UK large cap equity


  • Vanguard FTSE UK All Share Index Unit Trust (GB00B3X7QG63) TCO 0.06% (OCF 0.06%, Transaction 0%)

Next best

  • HSBC FTSE All Share Index Fund Institutional (GB0030334345) TCO 0.07% (OCF 0.02%, Transaction 0.05%)
  • Lyxor Core UK Equity All Cap ETF (LCUK) TCO 0.1% (OCF 0.04%, Transaction 0.06%)
  • Fidelity Index UK Fund P (GB00BJS8SF95) TCO 0.1% (OCF 0.06%, Transaction 0.04%)
  • L&G UK Equity ETF (LGUK) TCO 0.12% (OCF 0.05%, Transaction 0.07%)

The L&G ETF has an ESG remit.

UK mid cap equity


  • Amundi Prime UK Mid and Small Cap ETF (PRUK) TCO 0.05% (OCF 0.05%, Transaction 0%)

Next best

  • HSBC FTSE 250 Index Fund C (GB00B80QG052) TCO 0.19% (OCF 0.1%, Transaction 0.09%)
  • Vanguard FTSE 250 ETF (VMIG) TCO 0.22% (OCF 0.1%, Transaction 0.12%)
  • Xtrackers FTSE 250 ETF (XMCX) TCO 0.24% (OCF 0.16%, Transaction 0.08%)

The Amundi index tracker is streets ahead of its rivals due to Morningstar’s report of zero transaction costs. We’ve requested verification from Amundi. 

UK small cap equity

There are no good low-cost index funds available for the UK small cap asset class. The iShares ETF listed below is more an expensive FTSE 250 tracker. Our other suggestions are active funds and are shown as a selection of what’s available rather than a comprehensive survey.


  • Schroder Institutional UK Smaller Companies Fund (GB0007893984) TCO 0.53% (OCF 0.51%, Transaction 0.02%)

Next best

  • Baillie Gifford British Smaller Companies B Fund (GB0005931356) TCO 0.73% (OCF 0.73%, Transaction 0%)
  • L&G UK Smaller Companies Fund (GB00B7LFF300) TCO 0.79% (OCF 0.78%, Transaction 0.01%)

UK equity income


  • Vanguard FTSE UK Equity Income Index Fund (GB00B59G4H82) TCO 0.29% (OCF 0.14%, Transaction 0.15%)

Next best

  • WisdomTree UK Equity Income ETF (WUKD) TCO 0.35% (OCF 0.29%, Transaction 0.06%)
  • SPDR S&P UK Dividend Aristocrats ETF (UKDV) TCO 0.64% (OCF 0.3%, Transaction 0.34%)

Global equity – developed world and emerging markets (All-World)


  • HSBC FTSE All-World Index Fund C (GB00BMJJJF91) TCO 0.13% (OCF 0.13%, Transaction 0%)

Next best

  • iShares MSCI ACWI ETF (SSAC) TCO 0.20% (OCF 0.2%, Transaction 0%)
  • Fidelity Allocator World Fund W (GB00B9777B62) TCO 0.21% (OCF 0.2%, Transaction 0.01%)
  • Vanguard LifeStrategy 100% Equity Fund (GB00B41XG308) TCO 0.23%(OCF 0.22%, Transaction 0.01%)
  • Vanguard ESG Global All Cap ETF (V3AB) TCO 0.31% (OCF 0.24%, Transaction 0.07%)

Vanguard LifeStrategy and Fidelity Allocator invest in other index trackers. Fidelity invests in REITs and small caps.

World equity – developed world only


  • Amundi Prime Global ETF (PRWU) TCO 0.05% (OCF 0.05%, Transaction 0%)

Next best

  • L&G Global Equity ETF (LGGG) TCO 0.11% (OCF 0.1%, Transaction 0.01%)
  • Lyxor Core MSCI World ETF (LCWL) TCO 0.12% (OCF 0.12%, Transaction 0%)
  • SPDR MSCI World ETF (SWLD) TCO 0.13% (OCF 0.12%, Transaction 0.01%)
  • iShares Developed World Index Fund D (IE00BD0NCL49) TCO 0.12%(OCF 0.12%, Transaction 0%)
  • Fidelity Index World Fund P (GB00BJS8SJ34) TCO 0.12% (OCF 0.12%, Transaction 0%)

The L&G ETF has an ESG remit.  

World ex-UK equity


  • L&G International Index Trust I Fund (GB00B2Q6HW61) TCO 0.14% (OCF 0.13%, Transaction 0.01%)

Next best

  • Vanguard FTSE Dev World ex-UK Equity Index Fund (GB00B59G4Q73) TCO 0.15% (OCF 0.14%, Transaction 0.01%)
  • Aviva Investors International Index Tracking SC2 Fund (GB00B2NRNX53) TCO 0.25% (OCF 0.25%, Transaction 0%)

You can also pick ‘n’ mix using individual US, Europe ex-UK, Japan, and Pacific ex-Japan trackers.

World income equity


  • Vanguard FTSE All-World High Dividend Yield ETF (VHYG) TCO 0.37% (OCF 0.29%, Transaction 0.08%)

Next best

  • iShares MSCI World Quality Dividend ESG ETF (WQDA) TCO 0.38% (OCF 0.38%, Transaction 0%)
  • Fidelity Global Quality Income ETF (FGQD) TCO 0.43% (OCF 0.4%, Transaction 0.03%)
  • WisdomTree Global Quality Dividend Growth ETF (GGRG) TCO 0.43% (OCF 0.38%, Transaction 0.05%)
  • Vanguard Global Equity Income Fund (GB00BZ82ZW98) TCO 0.58% (OCF 0.48%, Transaction 0.1%)

The Vanguard fund is active but gives you a non-ETF option.

World small cap equity


  • UBS (Irl) ETF – MSCI World Small Cap Socially Responsible (WSCR) TCO 0.3% (OCF 0.23%, Transaction 0.07%)

Next best

  • Vanguard Global Small-Cap Index Fund (IE00B3X1NT05) TCO 0.34% (OCF 0.3%, Transaction 0.04%)
  • iShares MSCI World Small Cap ETF (WLDS) TCO 0.35% (OCF 0.35%, Transaction 0%)
  • SPDR MSCI World Small Cap ETF (WOSC) TCO 0.47% (OCF 0.45%, Transaction 0.02%)

Emerging markets equity


  • Amundi Prime Emerging Markets ETF (PRAM) TCO 0.1% (OCF 0.1%, Transaction 0%)

Next best

  • Lyxor MSCI Emerging Markets ETF (LEMA) TCO 0.17% (OCF 0.17%, Transaction 0%)
  • HSBC MSCI Emerging Markets Index ETF (HMEC) TCO 0.21% (OCF 0.15%, Transaction 0.06%)
  • Fidelity Index Emerging Markets Fund P (GB00BHZK8D21) TCO 0.21% (OCF 0.2%, Transaction 0.01%)
  • HSBC Emerging Market Sustainable Equity ETF (HSEF) TCO 0.29% (OCF 0.18%, Transaction 0.11%)

Multi-factor – Global


  • JPMorgan Global Equity Multi-Factor ETF (JPLG) TCO 0.22%(OCF 0.19%, Transaction 0.03%)

Next best

  • Invesco Quantitative Strategies ESG Global Equity Multi-Factor ETF (IQSA) TCO 0.3% (OCF 0.3%, Transaction 0%)
  • Invesco Global ex UK Enhanced Index Fund Y (GB00BZ8GWR50) TCO 0.34% (OCF 0.23%, Transaction 0.11%)
  • Franklin LibertyQ Global Equity SRI ETF (FLXG) TCO 0.4% (OCF 0.4%, Transaction 0%)
  • Amundi ETF Global Equity Multi Smart Allocation Scientific Beta ETF (SMRU) TCO 0.41% (OCF 0.4%, Transaction 0.01%)

All factor investing is effectively straying into active management territory. Essentially, you hope that your chosen subset of the market can outperform. The important thing is to choose products underpinned by sound financial theory, a verifiable set of rules, and a commitment to low costs.

Regional ETFs are available. But we’ve stuck to global multifactor products for broad diversification.

Property – UK


  • iShares UK Property ETF (IUKP) TCO 0.4% (OCF 0.4%, Transaction 0%)

Next best

  • iShares MSCI Target UK Real Estate ETF (UKRE) TCO 0.43% (OCF 0.4%, Transaction 0.03%)

No index fund alternative.

Property – global


  • iShares Global Property Securities Equity Index Fund D (GB00B5BFJG71) TCO 0.23% (OCF 0.17%, Transaction 0.06%)

Next best

  • Amundi ETF FTSE EPRA/NAREIT Global ETF (EPRA) TCO 0.24% (OCF 0.24%, Transaction 0%)
  • VanEck Global Real Estate ETF (TREG) TCO 0.26% (OCF 0.25%, Transaction 0.01%)
  • L&G Global Real Estate Dividend Index Fund I (GB00BYW7CN38) TCO 0.27% (OCF 0.22%, Transaction 0.05%)
  • Northern Trust Developed Real Estate ESG Index Fund (NL00150003F8) TCO 0.31% (OCF 0.28%, Transaction 0.03%)

There’s an unusual 1% exit fee on the Northern Trust fund. It’s also Dutch domiciled so watch out for withholding tax



  • L&G All Commodities ETF (BCOM) TCO 0.15% (OCF 0.15%, Transaction 0%)

Next best

  • iShares Diversified Commodity Swap ETF (COMM) TCO 0.26% (OCF 0.19%, Transaction 0.07%)
  • iShares Bloomberg Enhanced Roll Yield Commodity Swap ETF (ROLL) TCO 0.28% (OCF 0.28%, Transaction 0%)
  • WisdomTree Broad Commodities ETF (COMX) TCO 0.37% (OCF 0.29%, Transaction 0.08%)



  • Amundi Physical Gold ETC (GLDA) TCO 0.12% (OCF 0.12%, Transaction 0%)
  • Invesco Physical Gold A ETC (SGLP) TCO 0.12% (OCF 0.12%, Transaction 0%)
  • WisdomTree Core Physical Gold ETC (GLDW) TCO 0.12% (OCF 0.12%, Transaction 0%)
  • Xtrackers IE Physical Gold ETC (XGDU) TCO 0.12% (OCF 0.12%, Transaction 0%)

Gold trackers are Exchange Traded Commodities (ETCs).

UK Government bonds – intermediate


  • Invesco UK Gilts ETF (GLTA) TCO 0.06% (OCF 0.06%, Transaction 0%)

Next best

  • Lyxor Core UK Government Bond ETF (GILS) TCO 0.08% (OCF 0.07%, Transaction 0.01%)
  • Vanguard UK Gilt ETF (VGVA) TCO 0.1% (OCF 0.07%, Transaction 0.03%)
  • Fidelity Index UK Gilt Fund P (GB00BMQ57G79) TCO 0.1% (OCF 0.1%, Transaction 0%)
  • iShares GiltTrak Index Fund (IE00BD0NC250) TCO 0.12% (OCF 0.1%, Transaction 0.02%)

UK Government bonds – long


  • Vanguard UK Long-Duration Gilt Index Fund (GB00B4M89245) TCO 0.12% (OCF 0.12%, Transaction 0%)

Next best

  • SPDR Bloomberg Barclays 15+ Year Gilt ETF (GLTL) TCO 0.16% (OCF 0.15%, Transaction 0.01%)
  • iShares Over 15 Years Gilts Index Fund (GB00BF338G29) TCO 0.16% (OCF 0.16%, Transaction 0%)

UK Government bonds – short


  • Invesco UK Gilt 1-5 Year ETF (GLT5) TCO 0.06% (OCF 0.06%, Transaction 0%)
  • L&G UK Gilt 0-5 Year ETF (UKG5) TCO 0.06% (OCF 0.06%, Transaction 0%)

Next best

  • Goldman Sachs Access UK Gilts 1-10 Years ETF (GIL5) TCO 0.07% (OCF 0.07%, Transaction 0%)
  • iShares UK Gilts 0-5 ETF (IGLS) TCO 0.1% (OCF 0.07%, Transaction 0.03%)
  • JPMorgan BetaBuilders UK Gilt 1-5 yr ETF (JG15) TCO 0.1% (OCF 0.07%, Transaction 0.03%)

The Goldman Sachs ETF has a longer bond duration than the other short-dated funds in this section, but it’s not quite an intermediate fund. 

UK Government bonds – index-linked


  • Lyxor Core UK Government Inflation-Linked Bond ETF (GILI) TCO 0.08% (OCF 0.07%, Transaction 0.01%)

Next best

  • Vanguard UK Inflation Linked Gilt Index Fund (GB00B45Q9038) TCO 0.13% (OCF 0.12%, Transaction 0.01%)
  • iShares £ Index-Linked Gilts ETF (INXG) TCO 0.14% (OCF 0.1%, Transaction 0.04%)
  • L&G All Stocks Index Linked Gilt Index Trust I (GB00B84QXT94) TCO 0.15% (OCF 0.15%, Transaction 0%)

UK index-linked funds may not be suitable for your portfolio due to embedded real interest risk. We’ve switched our Slow and Steady portfolio to a short duration global index-linked fund hedged to GBP. See below. 

Global inflation-linked bonds hedged to £


  • Lyxor Core Global Inflation-Linked 1-10Y Bond ETF (GISG) TCO 0.22% (OCF 0.2%, Transaction 0.02%)

Next best

  • iShares Global Inflation Linked Government Bond ETF (GILG) TCO 0.24% (OCF 0.2%, Transaction 0.04%)
  • L&G Global Inflation Linked Bond Index Fund I (GB00BBHXNN27) TCO 0.27% (OCF 0.23%, Transaction 0.04%)
  • Xtrackers Global Inflation Linked Bond ETF (XGIG) TCO 0.28% (OCF 0.25%, Transaction 0.03%)
  • Royal London Short Duration Global Index Linked Fund M (GB00BD050F05) TCO 0.27% (OCF 0.27%, Transaction 0%)

All are short and intermediate options, hedged back to Sterling. The Royal London fund is active.

Global government bonds hedged to £


  • Amundi Index JP Morgan GBI Global Govies ETF (GOVG) TCO 0.17% (OCF 0.15%, Transaction 0.02%)

Next best

  • HSBC Global Funds ICAV – Global Government Bond Index Fund – BDHGBP (IE00BDFD2S67) TCO 0.22% (OCF 0.22%, Transaction 0%)
  • iShares Global Govt Bond ETF (IGLH) TCO 0.25% (OCF 0.25%, Transaction 0%)
  • Xtrackers Global Government Bond ETF (XGSG) TCO 0.29% (OCF 0.25%, Transaction 0.04%)

All hedged back to Sterling. The HSBC fund invests in emerging markets but the allocation is unknown as it is highly opaque for an index fund. Proceed with caution. 

Total global bonds hedged to £ (government and corporate)


  • Amundi Index Global Aggregate 500M ETF (AGHG) TCO 0.09% (OCF 0.08%, Transaction 0.01%)

Next best

  • iShares Core Global Aggregate Bond ETF (AGBP) TCO 0.1% (OCF 0.1%, Transaction 0%)
  • iShares Global Aggregate Bond ESG ETF (AEGG) TCO 0.12% (OCF 0.1%, Transaction 0.02%)
  • Vanguard Global Bond Index Fund (IE00B50W2R13) TCO 0.27% (OCF 0.15%, Transaction 0.12%)
  • Vanguard Global Short Term Bond Index Fund (IE00BH65QG55) TCO 0.29% (OCF 0.15%, Transaction 0.14%)

All hedged back to Sterling.

Using cheapest index funds UK list

You can precisely identify the fund you’re after by using the ISIN codes or ETF tickers we provide in brackets. (This piece helps explain fund names.)

We’ve given the code for the accumulation fund, GBP-priced version where available. Income distributing versions are usually offered too.

This piece explains the ins and outs of accumulation vs income funds.

  • We’ve included an Environmental, Social, and Governance (ESG) index tracker option for each sub asset-class where available. 
  • Actively managed funds are used when low-cost index funds are not available. Active funds are noted in the relevant sections.
  • We don’t show platform exclusive index trackers as they’re generally not a good deal overall.

Cheap index trackers and costs – extra detail

The bid-offer spread is an additional cost you may incur that isn’t captured by the TCO figure above.   

This charge shouldn’t be significant for most passive investors anyway but you can gauge it by using the estimated spread published by Hargreaves Lansdown on its fund pages. 

The final significant cost you’ll pay are broker fees – we track those on our broker comparison table.

Watch out for FX fees charged by brokers on certain funds. This is something of a stealth cost that’s quite avoidable.

Some providers of synthetic ETFs publish a ‘swap fee’ on top of the TER. Just add the swap fee to the TER to get the Ongoing Charge Figure. This is how we’ve treated swap fees in the listing above. 

It’s worth knowing that a fund’s transaction costs can fluctuate quite a lot from period to period, especially if there’s excessive turnover in the fund’s index.

So don’t feel like you instantly need to switch if your fund’s transaction costs suddenly spike.

Keep your fund, and its main rivals, under review for up to a year before coming to any definitive conclusions about its competitiveness.  

Some index trackers register negative transaction costs but I’ve disregarded that from the TCO calculations above. That’s because negative transaction costs amount to an accounting technique that’s not sustainable over time.

Low cost index funds UK – fees to ignore

Ignore a fund’s Annual Management Charge (AMC). The AMC is a very old-fashioned fee metric that excludes important fund costs.

This is why a fund’s AMC is typically lower than its OCF or TER.

Do not add the AMC to the OCF or TER.

The OCF and TER are interchangeable, so choose one of those costs (the highest) and add it to the fund’s transaction cost to calculate its TCO.

Treat negative transaction costs as zero.

Ignore entry and exit charges for index trackers where you see them mentioned in fund literature such as Key Investor Information Documents.

These fees do not apply to ordinary investors like you and I. They’re levied on institutional participants dealing directly with the fund provider.

The same goes if you see an eye-watering minimum purchase figure (such as £100,000) to buy into a fund.

Be guided by your broker’s minimum purchase amount.

Final thoughts on low-cost index funds and ETFs

There’s often little to distinguish index trackers that are closely matched in price. However we have previously written a few pieces to help you resolve tie-breaker situations:

If you’re looking for the cheapest place to buy and hold these funds then take a look at our broker comparison table.

Our article on designing your own asset allocation will help you construct your own portfolio. If you want a quick shortcut, you can do a lot worse than checking out our best multi-asset fund picks for an instant portfolio solution.

We update this list periodically. Quoted TCOs may date, as fund groups fight their turf wars by undercutting each other (hurrah!) but this article should still prove an excellent starting point for your research.

If anyone comes across any better index tracker options I’d love to hear about them in the comments below.

Take it steady,

The Accumulator

Note: Some comments below may refer to an older collection of low-cost index trackers. Scroll down for the latest thoughts.

{ 805 comments… add one }
  • 200 The Accumulator March 27, 2014, 8:22 pm

    @ Don – Thanks for the heads up. This post is due its annual update. I tend not to list every product with the same OCF though, just a representative one and an alternative. Definitely worth putting a RAFI ETF in though and I’ll take a look at the UBS ones. They weren’t that cheap last time I looked.

  • 201 Martin March 27, 2014, 10:56 pm

    Minefield knowing ehats for the best! have a selftrade acc and have looked at their cheapest options in funds that i might be interested in to a degree and found these.

    HSBC American Index Retail Acc OEIC
    HSBC European Index Retail Acc OEIC
    HSBC FTSE All Share Index R Inc OEIC
    HSBC FTSE All Share Index R Acc OEIC
    HSBC FTSE 100 Index Retail Inc OEIC
    HSBC FTSE 100 Index Retail Acc OEIC
    HSBC FTSE 250 Index Retail Inc OEIC
    HSBC FTSE 250 Index Retail Acc OEIC
    HSBC Japan Index Retail Acc OEIC
    HSBC Pacific Index Retail Acc OEIC
    Threadneedle Global Eq Ret UT
    Threadneedle Mgd Inc Ret UT
    Henderson Money Market UT UT
    Threadneedle Defensive Eq & Bd Ret UT
    Threadneedle Defensive Ret UT
    Threadneedle Equity & Bd Ret UT
    Threadneedle Global Eq & Bd Ret OEIC

    Are any of them any good. All look like they have 0.25 % charge but then no other fees except inactive charge but ill be buying enough for that not to matter. Is it silly to buy trackers at the historical high of an index? Should I just buy a blend of the above? I already i invest in individual shares and want a passive alternative to accompany them


  • 202 Martin March 27, 2014, 11:04 pm

    Sorry looks like the annual management fee is extra so back to drawing board. Why isn’t there an easy solution to investing? Pretty sure if someone came up with one they’d be rich!

  • 203 Peter Barber March 28, 2014, 6:36 am

    What about using the US equivalent ETF’s which tend to be have cheaper OCF’s eg VOO 0.05% compared to VUKE 0.1%

  • 204 The Accumulator March 28, 2014, 10:34 pm

    @ Peter – you tend to find that much of the differential gets wiped out by currency conversion costs. You also run into complications with taxation if the US funds don’t have reporting fund status and you’re investing outside of a tax shelter.

  • 205 Snowman March 31, 2014, 10:12 am

    Vanguard have reduced their dilution levy on their UK equity funds (for example UK equity index fund) from 0.5% to 0.4%, in reponse to the removal of schedule 19 SDRT announced in last year’s budget, which effectively took place yesterday.

  • 206 The Investor March 31, 2014, 10:51 am

    @Snowman — Great spot, cheers!

  • 207 Alex April 1, 2014, 8:51 pm

    Some of these OCFs appear to be outdated, e.g. Blackrock Emerging Markets Tracker D factsheet says OCF is 0.28%, Vanguard EM fund factsheet says OCF 0.40% with no dilution levy.

    Incidentally, is it worth switching from the latter to the former? BR’s tracking error looks worse, bad enough to gobble up the 0.12% difference in OCF – Here’s a comparison using Morningstar. Factor in time out of the market during switch and I’m sceptical…

  • 208 Atlantic Span April 3, 2014, 9:00 am

    As someone new to investing,this article is just what I need to help me assemble a selection of low-cost funds to set me on my way.
    As I am still trying to familiarise myself with the terms and jargon used,would you mind explaining what a ‘retail class’ fund is, as distinct from the other products mentioned.

  • 209 Naar April 4, 2014, 12:41 pm

    As I understand it, a retail class fund is one that regular punters can purchase, as opposed to an institutional class fund where the minimum buy-in amount may be in the millions of pounds. Retail class funds tend to have higher charges than institutional funds.

  • 210 ivanopinion April 4, 2014, 12:59 pm

    That was the original distinction, though these days there are plenty institutional classes that regular punters can buy with low minimums. Generally speaking, retail included max commission for the intermediaries and is being phased out. I wouldn’t worry about the name; just check out all classes that are available to you and choose the one with the lowest OCF/TER.

  • 211 The Accumulator April 6, 2014, 4:40 pm

    @ Alex – yes, this article needs a good old update. You’re right, it’s worth comparing tracking error before switching between two competitive trackers on the basis of a small difference in OCF.

    I’ve just compared them on Trustnet too and the result is again in favour of Vanguard – though the numbers are different.

    Tracking error is the true cost of any tracker, it’s just very hard to get reliable numbers. The case seems pretty compelling here though.

  • 212 Naar April 6, 2014, 7:41 pm

    On that note, any tips for comparing the relative merits of the Vanguard emerging markets index fund and their emerging markets ETF? I know it’s a bit like comparing apples to oranges since they track different indices and the ETF doesn’t have much in the way of performance history, but so far it does seem to track its index much more tightly (and has a lower OCF). Is it naive to assume that one index is roughly as good as another when it comes to accessing an asset class?

  • 213 The Accumulator April 6, 2014, 11:15 pm

    You could check the factsheets to see if there are any differences in constituent countries (e.g. some Emerging Markets indices include Taiwan and South Korea, some do not), you could check the number of constituent stocks (more is better), the level of concentration in the top few companies, sectors or countries (less is better) and the rules of the index. But there was a lot written about the difference between FTSE Emerging Markets and MSCI Emerging Markets when Vanguard switched between them. You could Google it but I don’t remember anyone coming up with any compelling reason as to why I should worry either way.

  • 214 David April 7, 2014, 9:08 am

    Hi all,

    I have just done my regular re-check of my ETF selections and at the moment I regularly put money into 5 areas (FTSE250, FTSE100, S&P500, Global Emerging Markets and Europe ex-UK).

    I use the following to do this, and I have done a LOT of research into pretty much every available ETF which tracks these. These have, as far as I know, the lowest TERs and tracking errors.

    One thing to note – Deutsche Bank (db x-trackers) recently announced that they are dumping synthetic ETFs (those which track using swaps and other derivates) and switching to physical replication. Lyxor are still using synthetics. Vanguard are physical. I would avoid using synthetics as you do see some funny movements (sometimes!).

    Global Emerging Markets:
    db X-trackers MSCI Emerging Market ETF (XMEM)
    0.65% TER (lowest I can find). iShares do similar but its a FTSE EM tracker and I prefer the mix of the MSCI index

    Vanguard Funds Vanguard S&P 500 Ucits ETF (VUSA)
    0.09% TER. Cannot be beaten for cost

    Europe ex-UK:
    IShares MSCI Europe Ex-UK Ucits ETF (IEUX)
    0.4% TER – again as competitive as I can find

    DB X-Trackers FTSE 250 Ucits ETF (DR) (XMCX)
    0.35% TER

    FTSE100 (I don’t add to this anymore but I still hold it):
    Vanguard Funds Vanguard FTSE 100 Ucits ETF (VUKE)

    All of these funds are available on the Halifax ShareBuilder platform (£2 purchase fee, £11.95 sell fee) which makes pound cost averaging a real possibility with small regular amounts. None of them charge entry/exit fees if you use a platform.

    Hope this helps. I have spent a LONG time looking into these four areas and originally Lyxor did come into it but their use of synthetics put me off. HSBC also do some excellent trackers but just not quite as competitive as these in my mind, but not much in it.

  • 215 David April 7, 2014, 9:12 am

    One point to note on the MSCI / FTSE EM indices is that the differences are not insignificant. The major differences are that FTSE doesn’t include Korea (about 15% in the MSCI), and MSCI doesn’t include the UAE or Pakistan. The rest are broadly the same.

    As I am happy to have the exposure to Korea (I want it) then I use the MSCI tracker.

    Good article here:

  • 216 David April 7, 2014, 9:22 am

    Also one last caveat on my numbers – I am a Channel Island resident, so accumuling funds are much more beneficial to me. I don’t pay tax on accumulated earnings – you do in the UK. You also pay tax on capital gains, I don’t. I’m also punished on dividends (20% foreign witholding tax). So accumulating funds like the db x-trackers outperform the Vanguard, for me, even though the TER is 0.65% compared to 0.29%.

    Be VERY careful on the tax side. UK residents are required to declare and pay tax on the accumulated earnings. You should receive an annual tax statement telling you this.

    I am a chartered accountant, but by no means a tax expert. Get tax advice before you pick what you want, as the tax is could have a bigger impact than a slight difference in TER.

  • 217 Ross P April 8, 2014, 2:01 pm

    I was using YouInvest’s ETF quick rank research facility and when sorted by ‘Fund Ongoing Charge’, the cheapest one came up as

    “db x-trackers Euro Stoxx 50® UCITS ETF (DR) 1C (GBP)” with a charge of 0.00%

    That can’t be right can it? I noticed there is a 1D version for which the kiid states an AMC of 0.09% (though it still says the Fund Ongoing Charge is 0.00%).

    Is the ‘Fund Ongoing Charge’ or ‘Total Expense Ratio’ not meant to be the AMC + any other costs?

    I’m getting rather confused by the detail…..

  • 218 David April 8, 2014, 2:28 pm

    The TER should effectively be the total costs, not including the investment/withdrawal fees. It is as close to a tracking error as you can get (just about, but it also depends on how well they replicate the market). So the TER of 0% quoted must be wrong although there may be no “charge”.

    The charge of 0% may mean the initial investment charge. db do charge 3% if you invest direct but like most ETFs its 0% if you invest via an exchange or broker.

    Your costs will be whatever your broker charges you as commission (nearly all ETFs can be bought for £2 per trade if you use a regular investment plan and it’s usually around £12 to sell depending on who you use) + the TER (but this is just taken from the value of the fund by the manager, you won’t see it as a charge as such but you will notice it in the performance of the fund over time).

    I know I have harped on about Halifax a fair bit, because I use them, but their research centre is pretty easy to use. I have checked that ETF for you and the TER is 0.09%, which is very low, so it would seem a good bet if you want the Euro Stoxx 50. It’s also in the £2 per trade deal.


    I would take a look at the makeup of the index and then see what you want to invest in rather than just the TER. I think the Euro Stoxx50 is quite bank heavy but I haven’t checked recently to be honest. Once you have picked your index to track, have a look at these ETF companies. If you can’t find a good tracker with a decent TER, I would maybe think about a different index:
    db x-trackers (now moving to physical replication, yay)

    There are a few others but these tend to cover off most bases I find. You can spend your life checking these things and arguing the toss either way – its very hard to pick! If you are worried, you could always pick two and put money into one for 6 months and then the other? Or both at the same time (increases fees, but would make for an interesting comparison!).

    Vanguard are usually hard to beat if they have an ETF in the area you want.

  • 219 The Accumulator April 9, 2014, 8:27 pm

    @ Ross – Yep, the db X-tracker Eurostoxx 50 ETF is 0% OCF. The AMC will reflect the cost of running it but the management use tax management techniques and securities lending profits to reduce the OCF to 0. This article explains more about how it works:


    David’s point about choosing your index first is spot on.

  • 220 weenie April 15, 2014, 11:35 am

    I think you mean the cheapest is 0.09%, not 0.9%?

  • 221 Oscar_Cunningham April 15, 2014, 11:40 am


    db X-trackers FTSE 100 ETF (XDUK) OCF 0.9%

    a typo? That would make it the most expensive there. Should it be 0.09%?

  • 222 Marc April 15, 2014, 12:22 pm

    Do you have any preference over ETFs which track the index by holding the actual shares (physical) or are synthetic.

    Don’t know if it matters but I prefer the non synthetic ones.

  • 223 Charlie Don't Surf April 15, 2014, 12:40 pm

    Isn’t VVUKEI a better option than VVUEIN for domestic value equity?

    And what’s your opinion on VIUKGV for government bonds?


  • 224 Andrew Williams April 15, 2014, 1:46 pm

    Useful article as always! I guess that this should say 0.09%?

    “db X-trackers FTSE 100 ETF (XDUK)1 OCF 0.9%

  • 225 David April 15, 2014, 2:38 pm



    I don’t like the look of the tracking error. 0.4% last year. The TER is a good representation of what tracking error should be, but in this case you can see quite clearly that it isn’t perfect. The Vanguard FTSE100 fund has a TER only 0.01% higher (at 0.1%) but a better tracking error (0.2%) for the 1 year data is available at least. Perhaps because Vanguard is a not-for-profit entity.


    TER isn’t the only thing to consider. Use the Yahoo Finance graph tools and plot a few of the funds you’re thinking of against each other. This usually pulls out a fairly clear winner (which is usually the lowest TER fund) or will put your mind at rest that the difference is negligible. 5 yrs history is best if you can get it but with only 1 year of data available I’d put my money in the Vanguard (and I do…).

  • 226 David April 15, 2014, 3:18 pm

    Out of interest, anyone know why the Vanguard FTSE100 ETF lost 4% of its value on 17 March? I can’t figure it out…

  • 227 Fred April 15, 2014, 3:49 pm


    I think it’s just the ex-dividend date, if you stick VUKE into google finance it shows a dividend of 3.99% on the 19th March. i.e. if you’re the holder of a share on that date you’ll receive a dividend of 3.99%. if you hold them a day later you won’t, so the value is reduced proportionately. Sites like trustnet/morningstar should allow you to view what you would have had if you’d reinvested the income.

  • 228 L April 15, 2014, 5:16 pm


    If you mean the 19th March 2014, that’s the div date for the ETF.


  • 229 The Accumulator April 15, 2014, 6:41 pm

    @ Oscar & Andrew – Lovely spot, both. Thank you! On the very first one too. What a confidence builder!

    @ Charlie – it’s the same fund, only you’re looking at the income variant that pays out dividends rather than reinvests them automatically.

    @ David – You’re quite right that tracking error is the most important factor but you’ll be very lucky to get an accurate read over a long enough time period. I’ve found the available public domain tools to be riddled with inconsistencies and the fund manager’s arent forced by the regulator to provide apples with apples comparisons which they should be. There is no way to make an accurate call on one year’s worth of data so really we have to fall back on brand equity, in which case Vanguard wins hands down. Which is a long-winded way of saying “I agree with you!” but for slightly different reasons 🙂

    @ Marc – Yes, in a tie-break situation I’d go for the physical ETF but I don’t have a problem investing in synthetics if that’s the best value choice. If the physical ETF lends out its securities then it’s exposed to counter-party risk which is the main drawback of a synthetic. Here’s some posts that discuss the issues in more detail:


  • 230 bigsy April 15, 2014, 7:38 pm

    @TA – the initial fee for VVUEIN (Vanguard FTSE U.K. Equity Income Index Fund) was reduced recently to 0.4%.

  • 231 The Accumulator April 15, 2014, 8:30 pm

    Nice one, bigsy. Thank you.

  • 232 Cowboy April 16, 2014, 9:37 am

    Hi guys,

    Love the resource 🙂

    Has anyone done a decent analysis of the impact of initial charges vs ongoing OCF. I am particularly looking at the domestic value (I know they are all income funds but take what you can get) where the top performer has a large initial charge 8 times the difference between it’s OCF and the next cheapest. I am a big fan of Vanguard so will probably be sticking with them where I can but on a pure numbers basis that seems a lot

  • 233 dawn April 16, 2014, 8:12 pm

    hello every one ,what would we do without this site?
    im trying to decide my emerging market exposure
    i was happily going for blackrocks tracker fund but its been said previously tracking error isnt good! so im now considering vanguards emerging market ETF . i like vanguards EM tracker but its not avaliable on i web platform
    im more of a lump sum investor having aquired too much in savings accounts so i know ETF,s are better for this ,any suggestions?

  • 234 dawn April 16, 2014, 8:21 pm

    hello everyone
    im trying to decide my emerging market exposure
    i was all set to go for blackkrocks EM tracker but it was previously said tracking error was bad. im now considering vanguards emerging markets ETF. as im more of a lump sum investor having saved too much in cash this might be better? i like vangaurds EM tracker but its not avaliable from i web platform . my EM money is in legal and general EM tracker at TER 1% so i need to move it across but funnily enough the same legal and general EM tracker is TER 0.43% on iweb platform? any suggestions???

  • 235 bigsy April 16, 2014, 10:25 pm

    @dawn – why do you think Vanguard’s EM offerings aren’t available on IWeb? I hold their EM ETF (VFEM) on that platform and I’ve just checked that their VIEMKT fund also seems to be available (search under Vanguard Investments (IRE)).

  • 236 Oscar's Dad April 17, 2014, 1:03 pm

    Hi TA,

    What about Fidelity Index UK Fund P-Acc (GB00BJS8SF95) – OCF 0.09% – as a Domestic Equity option?

    Is there any reason you have not listed it?

    Many thanks.

  • 237 dawn April 17, 2014, 6:50 pm

    hi bigsy
    yes, the vanguard EM ETF is available on iweb I spotted it
    but I couldn’t find vanguards EM tracker fund but I will have another look

  • 238 dawn April 17, 2014, 8:26 pm

    I looked at iweb again and just cannot find vanguards EM tracker VIEMKT
    are you sure its on there?

  • 239 bigsy April 17, 2014, 8:53 pm

    Dawn, I’ve checked again & it’s there: log in to your IWeb account, select the Trading option, then select the Funds option. Enter VIEMKT into the fund code box and select ‘Verify’.

  • 240 Hamzah April 18, 2014, 8:27 am

    With respect to the Vanguard and Blackrock emerging markets (and pacific ex-Japan) funds. The constituents of each company offering differ significantly reflecting the different indices being used (the Blackrock pacific ex-Japan contains about 40% emerging Asia). That is a based on whether one considers a particular country developed or emerging in each index. Pairing the two Vanguard funds or the two Blackrock funds in suitable proportions gives broadly similar geographic blends (not identical however).

    The big issue for me is not just TER, but the high unit costs of Vanguard funds. Rebalancing a small portfolio requires making small lump sum purchases (in my case £100 minimum on Charles Stanley Direct). The price of Vanguard funds from about £130-£180 just does not work with that rebalancing strategy. I used to be a Vanguard fan (and still hold three of their funds), but now look for acceptable alternatives with lower unit prices for funds that will be minority components of my portfolio (Blackrock has been winning that comparison).

    An even smaller point (but one raised on this site) is that the Vanguard funds being discussed here are domiciled in Ireland, whereas Blackrock’s are GB based.

  • 241 Hamzah April 18, 2014, 9:16 am

    For the sake of those un-familiar with Charles Stanley Direct, there is a minimum purchase of one unit for a fund. Fraction purchases greater that a single unit are allowed.

  • 242 The Accumulator April 18, 2014, 4:32 pm

    @ Hamzah – Thank you for your thoughtful comments. Another Monevator reader seems to have found a workaround for the Charles Stanley fractional unit problem: http://monevator.com/the-slow-and-steady-passive-portfolio-update-q4-2013/#comment-616861

  • 243 DonF April 18, 2014, 7:40 pm

    Re: World value equity

    What do people think about the UBS Value ETFs for the US / EUR respectively? I feel it might make more sense to just own a cheap proper US Value ETF (TER 0.2%) considering the global reach of US companies rather than a global high yield ETF or worse one of the RAFI ETFs at more than double the cost. Especially after reading this: http://monevator.com/have-the-powershares-ftse-rafi-etfs-done-the-business/

    My default choice tend to be Vanguard, then either iShares, SPDR or db x-trackers. But I’m starting to consider UBS as well. Their ETFs are always pretty competitive in terms of TERs. Does anyone have any experience with them? Is there something I’m missing? Tracking error?

  • 244 The Accumulator April 18, 2014, 8:37 pm

    @ DonF – I think this is very sensible approach. I don’t have any UBS ETFs myself.

    @ Oscar’s Dad – I haven’t listed it because to the best of my knowledge it’s only available through Fidelity’s own platform right now. I’m not including Super Clean funds which are exclusive to one or two platforms and use headline OCFs to lure investors into a less competitive deal overall. Compare the platform charge and OCF for all the funds you want to buy from rival funds before committing.

  • 245 dawn April 18, 2014, 8:41 pm

    yes ,you are correct. having checked again on iweb like you said both vanguards emerging market funds are available. ive just to decide do I go with the ETF or the tracker fund???
    any suggestions anyone???

  • 246 ljmuk April 18, 2014, 11:17 pm

    As a very wet behind the ears investor. I wonder if you could help me to get my asset allocation right?

    This is how my money is divided at the moment.
    In a funds ISA……
    UK equities (small cos + ftse all share tracker) 28%
    US equitites (sm cos + S&P 500 tracker 8%
    European equities 5%

    Cash ISAs 27%
    Index linked savings certs 18%
    Cash 14%

    I have put some of the cash £5760 (12/13 ISA allowance) into Charles Stanley Direct ISA & want to buy some trackers with it.

    What would you recommend?

  • 247 ljmuk April 18, 2014, 11:24 pm

    I meant 13/14 ISA allowance. 🙂

    I also have to move one of my other cash ISAs in June (15%) and intend to invest it in trackers.

    I have just retired and am now a non-taxpayer so do not have any spare cash to invest in an ISA for the 14/15 tax year.

    I prefer my money in ISAs so that I don’t have to fill in a tax return.

  • 248 Bob April 19, 2014, 12:31 pm

    Can you actually buy the likes of XDUK on Halifax’s platform?

  • 249 The Accumulator April 20, 2014, 9:15 am

    @ ljmuk – the answer to your questions depends on what you want/need your assets to achieve, over what period of time versus the amount of risk you can and are able to take on. These are pretty big questions.

    I think you need a starting point that can help you put some structure around your investment plan. A book would be massively helpful. You could try Larry Swedroe’s: The Only Guide You’ll Ever Need For The Right Financial Plan. Or Tim Hale’s Smarter Investing.

    Also, here’s a couple of Monevator pieces on asset allocation:




  • 250 Plan A plus April 22, 2014, 12:11 am

    @Martin (comment 201).

    You can buy the HSBC tracker funds you mentioned directly from HSBC, that way you cut out the middleman of the platform and save yourself some money.

    (Invest enough directly with them and you may qualify for there Premier bank account which has a few useful freebies, like free worldwide travel insurance, but never let the fringe benefits tail wag the investment dog.)

  • 251 @algernond April 23, 2014, 10:29 pm


    For the UK index tracker, is there a reason why the SWIP FTSE All Share Index (Class B) fund is not included? It appears to have a TER of 0.09%

  • 252 Steve April 23, 2014, 11:47 pm

    Thanks to all the information on this site, I am just about to take the plunge and buy a few funds. I have settled on a simple asset allocation based on low-cost funds but there are two questions stopping me.

    For me, domestic equity is between Royal London FTSE All Share Tracker Fund and Vanguard FTSE UK Equity Index. The Royal London one has lower costs so should be the obvious choice? I get the impression that OCF and TER are king but what about all the other numbers to get confused by 🙂 … According to the risk statistics info on iii.co.uk, the Royal London fund has a lower “tracking error” (2% vs 3%) – is this an indication of how well it tracks the index or is it some other number entirely? Does yield tell us anything useful?

    How much is it possible to worry about tracking error? Looking at the graphs on iii.co.uk, the Blackrock property tracker has had some significant tracking blips and the Blackrock emerging markets one became separated from the index graph by 2012. I’d like to find funds with low OCF that track my chosen benchmarks well but not sure if I can tell I’ve found one or how much time and energy to spend looking for them (this was meant to be a lazy portfolio after all 🙂 ).

  • 253 Naar April 25, 2014, 10:15 am

    algernon, I think this list of trackers is for generally available ones, and as far as I know you can only get that fund through Hargreaves Lansdown.

    Steve, you might find these articles interesting: http://monevator.com/ftse-all-share-tracking-error/ and http://monevator.com/tracking-error-how-to-measure-it/
    As a rule of thumb, cheaper trackers are better, but if one consistently underperforms the index by not tracking it very well, that essentially is an extra cost you need to take into account. As far as I know, technically speaking tracking error generally refers to the standard deviation of a tracker’s performance compared to the index. Generally you would expect the performance to be within one or two standard deviations from the index, but it could be more. A simpler measure is tracking difference, which is just the straight difference between the tracker and the index.

  • 254 ivanopinion April 25, 2014, 12:19 pm

    The SWIP tracker is excluded, I would think, because it is not very cheap once you have added the HL platform fee of 0.45%.

  • 255 Geo April 25, 2014, 12:31 pm

    The SWIP tracker is on Charles Stanley too, not sure but could be on others too. The list is said to eb complied purely on OCF. for instance many ETF’s cant be bought on regular investing options on certain platforms making them very unsuitable for regular investors but these still make the list, it would be very hard to distinguish things in this way. All ETF’s should be purchasable in any case, funds are trickier, but Fidelity World index is unavailable on several platforms and is included? However you could maybe carry on forever….. on Charles Stanley there is a Coporate Bond fund with an OCF of 0.15% – UBS STERLING CORPORATE BOND INDEXED but I haven’t the foggiest if its on other platforms.

  • 256 ivanopinion April 25, 2014, 1:54 pm
  • 257 Geo April 25, 2014, 2:16 pm
  • 258 ivanopinion April 25, 2014, 2:33 pm

    Ah, I was looking for FTSE All Share Index (Class B). The Foundation fund does appear in my list of 50. Now I know what I’m looking for, it’s also in Interactive Investor: http://www.iii.co.uk/investing/factsheet/0MEW

    I can’t see why TA would deliberately have excluded this fund, so I imagine he will add it, next time.

  • 259 emanon April 26, 2014, 12:55 pm

    If you decide to switch one of the trackers based on a saving with OCF it becomes that little bit more confusing with managing things on ones local spreadsheets one keeps. Is there an easier way to manage and track this or does it just take time, patience and being extremelly dynamic and reactive in how you do things?

  • 260 The Accumulator April 26, 2014, 5:35 pm

    @ Algernond – The SWIP FTSE All Share Index (Class B) fund was excluded as a Hargreaves Lansdown exclusive. But I’d missed the fact that its identical twin the SWIP Foundation Growth B Fund is now generally available. My thanks to Geo for spotting that one.

    Given the amazing OCF of the SWIP fund, I’ve decided to take out the FTSE 100 options: XDUK and VUKE. I don’t like the concentrated nature of the FTSE 100, although of course its mega cap components will dominate the FTSE All Share anyway.

    The list includes trackers that are generally available but not necessarily available on every single platform. If I had to check that then this list would never be published. Single platform exclusive funds are excluded.

    @ Steve – yield doesn’t tell you anything particularly useful. Total return is the important thing.

    The thing about tracking error is that it’s hard / impossible to get reliable comparisons that use a consistent formula and timeframe to enable you to pit like vs like.

    You stand more chance of making a meaningful comparison with tracking difference as Naar says. The simplest thing would be to use OCF to narrow your choice down to say your top 3 funds then match them against each other using a charting tool. Then you can knock out any that are clearly lagging the others, but you need at least 5 years or some outrageously wonky behaviour for the comparison to be worth while.

  • 261 Hamzah April 29, 2014, 12:10 pm

    @ The Accumulator – Another Monevator reader seems to have found a workaround for the Charles Stanley fractional unit problem: http://monevator.com/the-slow-and-steady-passive-portfolio-update-q4-2013/#comment-616861

    I accept that could work, but for an occasional rebalancing event such a requirement for a manual intervention by Charles Stanley Direct does not quite match my notion of using an online broker. I have a relatively small holding of individual tracker funds to blend my own global fund. The downside of Vanguard fund prices is that two of those funds will have to go out of balance to a greater degree than other equal value fund components from other providers. In the end an irritation rather than a deal breaker.

  • 262 Shetlander May 22, 2014, 3:16 pm

    If I plan to use only low-cost tracker funds, like you suggest here, is there any advantage to buying using a platform? For example, I can find no advantages to buying Vanguard tracker funds on the Hargeaves Landsowne web page. Why not buy the low-cost tracker funds direct? I am investing outside of an ISA or SIPP.
    I guess you need a broker or platform to invest in ETFs because they are traded on the stock market.

  • 263 The Accumulator May 24, 2014, 3:14 pm

    Hi Shetlander, the advantage with a platform is that you don’t have to find the £100,000 minimum you need to deal with Vanguard directly.

  • 264 ivanopinion May 27, 2014, 3:39 pm

    Fidelity has cut its tracker prices. http://www.citywire.co.uk/money/fidelity-slashes-cost-of-tracker-fund-range/a753242?ref=citywire-money-latest-news-list

    They seem to be available on platforms like II (at a slightly higher price than on the Fidelity platform), so they appear to be the new price champions (or at least to match the current champs):

    UK 9bp
    US 10bp
    Japan 12bp
    Europe 12bp
    Asia (excluding Japan) 15bp
    Emerging markets 25bp

    Whether their tracking is as good as the best remains to be seen.

  • 265 Snowman May 27, 2014, 3:47 pm

    Interesting development.

    Not a big fan of the Fidelity trackers because of the tracking difference (at latest on the UK all share tracker).

    A comparison of the OCFs of the share classes on the Fidelity platform and other platforms are shown at


  • 266 Aron May 27, 2014, 6:49 pm

    I’m with Fidelity and stacked with BlackRock trackers so this is an interesting development. As said tracking error is or has been more with Fidelity than others, from what has been reported.

  • 267 Dale Wilson May 29, 2014, 9:31 pm

    Minor error?

    Apologies in advance if I’ve misunderstood. The Emerging Markets section shows SPDR MSCI Emerging Markets Small Cap ETF (EMSM) as one of the ‘next best’. The code EMSM is for the non-Small Cap version, so I think either the code quoted or the name should be amended. One of:

    > SPDR MSCI Emerging Markets Small Cap ETF (EMSD) or
    > SPDR MSCI Emerging Markets ETF (EMSM)

    I’m trying to make a Hale-style portfolio with 6% Emerging markets & 3% Emerging markets Value & Small Cap and struggling to find a candidate for the value/small cap. I’m probably following the advice too rigidly, and should make do with a combined 9% of one of the 2 listed above.

  • 268 The Accumulator May 30, 2014, 8:55 am

    Hi Dale,

    EMSM brings up the £ version of the SPDR Emerging Markets Small Cap ETF: https://www.spdrseurope.com/product/fund.seam?ticker=SPYX%20GY

    EMSD is the $ version. Essentially two faces of the same fund.

    The iShares dividend ETF in that list gives you your value option. High yield funds are a form of value – a weakish one, it’s true but as you rightly say there aren’t many options available when it comes to EM.

    Hale does complicate things a lot with separate funds for value and small cap. I’d be inclined to merge them into one or two EM funds for simplicity sake, unless your portfolio is very big.

  • 269 Tommy May 30, 2014, 4:42 pm

    Hi guys, great insights – thank you

    Quick question about the ETF’s – what happens to the dividends?
    Do these get paid in cash? Or reinvested?

    Either way, does this lead rise to an income/dividend tax payment?

    Same question for ETC’s – or is there no dividends here, as they are commodities?
    Many thanks,

  • 270 The Accumulator May 31, 2014, 7:21 pm

    Hi Tom, few ETFs automatically reinvest dividends. The ones that do are generally called capitalising ETFs and normally it will be mentioned on the factsheet.

    If you’re in an equity ETF then this would lead to a tax payment if you’re a higher-rate tax payer holding the ETF outside of a tax shelter.

    Bond income counts against income tax, so basic rate tax-payers and above are in the firing line if held outside of a tax shelter.

    ETCs = no dividend, no tax.

  • 271 PassiveNoob June 3, 2014, 1:43 pm

    Hi – Apologies for the specific nature of the question, but there are a few examples above where there are similarly priced ETF’s and Index funds in the same category.

    I’m choosing an emerging markets fund, and have shortlisted 2 from above:
    >Vanguard FTSE Emerging Markets ETF (VFEM) OCF 0.29%
    >Vanguard Emerging Markets Index (VIEMKT) OCF 0.40%

    I’ve reviewed the Monevator post on ETF’s vs Index funds and also compared both products side-by-side using Morningstar (slightly different composition by markets). I’m just making a single (well, annual) purchase. The ‘take away’ message from the Monevator post was that Index funds are preferred, but I note the annual cost of the ETF is cheaper. Are there any other factors I should consider? Does the ETF pay a dividend that has to be manually reinvested, compared with the fund?

    Thanks for any advice.

  • 272 Naar June 3, 2014, 1:48 pm

    The Vanguard emerging markets fund tracks a different index (MSCI Emerging Markets) to the ETF (FTSE Emerging), so there is a slightly different allocation by country. Off the top of my head, I think the FTSE Emerging index doesn’t consider South Korea an emerging market – it makes up about 16% of the MSCI index. You would need to manually reinvest the dividend of the ETF, yes.

  • 273 Grand June 3, 2014, 2:10 pm

    Also @PassiveNoob, there maybe a number of different charges based on the platform you use. As ETF are share purchases the dealing fee needs to be taken into consideration as well as any holding charges.


  • 274 Naar June 3, 2014, 3:04 pm

    Yes, that’s a good point too! I forgot to say that (the last time I looked at it, anyway), it seemed like the ETF tracked its index better than the fund did, which you might expect given the nature of ETFs. However, the ETF has only been around for a little over two years so there isn’t really enough data to say definitively.

  • 275 PassiveNoob June 3, 2014, 3:04 pm

    Thanks both. A final question about costs. I’ve re-read the Monevator article “Don’t be misled: think TER not AMC”, but I’m still confused about the 2 costs listed by Morningstar for the 2 funds mentioned.

    Morningstar list the “TER” for ETF vs Fund as 0.29% vs 0.40%
    but they also list a “Management Fee” of 0.45% vs 0.40%

    I thought the management fees were included in the TER (which is why the fund figures are the same) – is the 0.45% for the ETF a possible maximum, but 0.29% the current TER? The TER for this ETF used to be 0.45% but was reduced to 0.29% on 3/12/13; perhaps the Morningstar ‘management fee’ is out of date?

    Thanks for any advice

  • 276 Naar June 3, 2014, 3:09 pm

    I would always double-check anything you read on Morningstar on the factsheet for whatever you’re going to invest in. The TER is supposed to be the AMC + additional bits, so it doesn’t make much sense to have an AMC higher than the TER! If you have a look on Vanguard’s website, you will see the current TER for the fund is 0.4% and the ETF’s is 0.29% as you said.

  • 277 lpgm June 9, 2014, 8:30 pm

    BlackRock has just launched two new iShares ETFs. The iShares MSCI Emerging Markets Consumer Growth UCITS ETF could be interesting – it has a TER of 0.6% and it reinvests income.

  • 278 Robert June 13, 2014, 6:35 pm

    We had a discussion a while back about being able to purchase Dimensional Value Funds from a few providers, including Interactive Investor. Well, I’ve been putting in smallish amounts for a few months now via a regular investment. I noticed that last month’s trades for Dimensional UK & International funds didn’t go through. II have now told me that they can no longer execute “buy” orders for Dimensional, although they can still do “sell” orders. I suppose at least they’re not (yet) forcing me to sell them. So those of you who said “it won’t last”, were absolutely right. Sigh. Back to the drawing board.

  • 279 The Accumulator June 13, 2014, 6:45 pm

    Thanks for the update, Robert. I had been wondering about this. The pattern has repeated itself across a number of brokers. When Dimensional discover these loopholes they shut them down because their model relies on sales through evangelising advisors.

  • 280 ivanopinion June 13, 2014, 7:05 pm

    I doubt you will be forced to sell, because what DFS want is long term, buy and hold investment, so they aren’t forced into unplanned liquidations of assets. They rely on chosen advisors to filter out the flightier investors. Now that you have invested, there’s no reason not to let you hold as long as you wish.

    But with plain vanilla tracker fees getting ever lower, the DFS fees represent an ever bigger differential which they have to overcome with their smart tracking.

  • 281 Craig June 18, 2014, 10:48 am

    Really annoyed at Charles Stanley re Fidelity Index World Fund (GB00B7LWFW05) OCF 0.15%. They had this available in an ISA at 0.08% so thought it was good value. Tried to add to it and now says unavailable. Called CS who said oops we made the wrong fund available, that should have been institutional investors only at min invest £500k, so forced to migrate to more expensive fund. Pretty amateur hour there. Unimpressed.

  • 282 Lorenzo June 21, 2014, 10:45 pm

    I still do not understand why we don’t update the list with the HSBC FTSE All Share Index Instl Acc – GB0030334345 – OCF 0.02%?

  • 283 Ross June 22, 2014, 8:45 am

    Despite an earlier post of mine and the fact the YouInvest universe says I can invest in that amazingly cheap tracker, the computer has said no…(the first time I tried it automatically changed my order to the retail version at 0.27%. One caveat is that I’ve only tried to invest via the regular invest (£1.50) option.

    Has anyone actually managed to buy and hold it?

  • 284 The Accumulator June 22, 2014, 9:25 am

    A reader has confirmed buying it at iWeb. I’m in a quandary with this fund though. I don’t want to litter the list with ‘exclusive’ funds that are not widely available regardless of broker choice. Last time I checked the HSBC All-Share I fund had disappeared from the listings of the main brokers, so I didn’t include it. If other readers can confirm holding it in places other than iWeb then I’ll put it in.

    Also, I haven’t updated the list yet with the recent Fidelity index fund price slashery so readers should look out for that too.

  • 285 Lorenzo June 22, 2014, 10:24 am

    Thanks Ross and The Accumulator. I’m planning to buy it at iWeb in a couple of weeks, I see it in the list of available funds. The KIID says that it’s the institutional version therefore OCF 0.02% but I’ll check and keep you posted. I understand the idea of having a comprehensive list of broadly available funds, just wondered why such a bargain wasn’t listed (my guess was that there was something wrong with this tracker, but it’s not the case anymore).

  • 286 blackcurrant June 26, 2014, 2:22 pm

    I intend to put this year’s ISA allowance into Fidelity’s UK index tracker (All-share), as prices have been cut to 0.07% (through Fidelity, not including their platform fee). The fund is available through two platforms that are both cheaper than Fidelity: iWeb and CavendishOnline. However, they have slightly different names:

    CavendishOnline: Fidelity Index UK Fund P-Acc (ISIN GB00BJS8SF95)
    iWeb: Fidelity Index UK A Acc NAV (ISIN GB0003875324)

    Does anyone know the difference? The Cavendish fund is described on Trustnet as “clean share class”, whereas the iWeb version is listed under “other share classes”.

    Also, a bit worryingly, while the annual management charge is advertised as 0.1% on Trustnet, the OCF comes to 0.3%, and if Trustnet’s notes under OCF are correct then there are further hidden charges described below. Can anyone shed any light on which of the two options above is likely to have the lowest charges overall, including all the hidden charges that are never published?

    From Trustnet:
    “Performance fees, transaction costs, interest on borrowing, costs associated with derivatives, entry and exit fees and soft commissions are not included in the OCF calculation, and should be factored in separately by the investor.”

  • 287 The Accumulator June 26, 2014, 6:22 pm

    GB0003875324 is an older fund with an OCF of 0.3%. It used to be part of their Money Builder range before they rebranded it.

    GB00BJS8SF9 is a newer iteration that’s part of Fidelity’s recent move to headline with a core set of index funds at rock bottom prices. Fidelity are going to make it available through other brokers at an OCF of 0.09%.

    That Trustnet blurb is a catch-all: for example those Fidelity funds don’t charge performance fees or entry and exit fees. However there are costs e.g. transaction fees that aren’t captured by the OCF and they show up in the tracking error.

    The cheaper fund is too new to have any track record that would give you a bead on its tracking error. However the older fund will give you a good indication of how good Fidelity are at managing tracking error. Chart it against Vanguard’s UK equity fund and the FTSE All-Share index on Trustnet and see how closely they all matched.

  • 288 blackcurrant June 26, 2014, 7:14 pm

    Thanks, the Vanguard fund does look like a better choice.

    Are Fidelity really allowed to hide costs in the tracking error? I would have thought an error would cause random divergence from the index, but now that I look on Trustnet I see the error is consistently negative. Interesting…

  • 289 Lorenzo July 1, 2014, 11:25 am

    following my previous comment, I confirm that at IWeb anyone can buy the HSBC AllShare Ins Acc tracker (OCF of 0.02%). I bought also the Fidelity World Index I Acc and they negotiated an awesome 0.08% OCF instead of 0.25%.Too good to be true, but it seems it is.

  • 290 Naar July 2, 2014, 1:55 pm

    Lorenzo, I think iWeb’s site might be misleading on that one – the trading page says 0.08%, but the KIID says 0.15%. I wonder which one is correct?

  • 291 Lorenzo July 2, 2014, 2:19 pm

    @Naar, I’ve asked the support exactly this question before buying it. They told me that they were able to negotiate this unbelievable 0.08% with Fidelity.

  • 292 ivanopinion July 2, 2014, 2:55 pm

    That fund is also showing at 0.08% on II and seems to be purchasable: http://www.iii.co.uk/investing/factsheet/I10K

    I see that they also have the US Index I fund at 0.08%.

  • 293 Naar July 9, 2014, 11:17 am

    It seems the HSBC FTSE All-Share tracker fund mentioned above by Lorenzo has been soft-closed, so it’s time to look at some replacement funds for me…

  • 294 Marcus July 11, 2014, 6:39 am

    I’ve also got a lump sum in HSBC AllShare Ins Acc tracker (OCF of 0.02%) on iWeb – looking at the corporate action notice this means you can sell but not buy this fund.

    HSBC still list the C version of this so I’m presumimg the underlying fund is still going, but iWeb are closing this loophole of low charges for this I varient.

    Am I wrong? or should I be moving out of this fund into the safety of say Vangaurd or DBX tracker for some UK exposure.

  • 295 Lorenzo July 14, 2014, 9:34 pm

    Marcus, I’ve checked iWeb and for some UK exposure Fidelity offers a tracker (although I haven’t checked the tracking error yet) with OCF of 0.09%. It’s the Fidelity Index UK Fund – GB00BLT1YM08 – it tracks the FTSE All Share.

  • 296 Dik July 15, 2014, 1:18 am

    @292 ivanopinion
    For Fidelity Index World I (I10K) you’re correct that AMC is .08% but TER is .15%

  • 297 Andrew July 28, 2014, 4:01 pm

    Has anyone used the Aviva Investors International Index Tracking SC2 fund? I’d like to use the Vanguard Dev World Ex-UK but TD require a minimum of £200 monthly investment. I can’t find any info on tracking error so was wondering if anyone had an opinion on its quality.

  • 298 The Accumulator July 29, 2014, 6:11 pm

    Hi Andrew,

    You can take a look at it on Morningstar: http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000000QXT

  • 299 Andy K July 31, 2014, 10:24 am

    @Larenzo, yes the Fidelity Index UK fund is the same one mentioned in the Slow and Steady Portfolio – http://monevator.com/the-slow-and-steady-passive-portfolio-update-q2-2014/. Not sure why it isn’t included in this list above though, as an alternative to SWIP Foundation Growth B? It has the same OCF

  • 300 Andy K July 31, 2014, 10:40 am

    Ah, just reading in more detail and it’s probably because the Fidelity fund has a higher tracking error than the others.

  • 301 Tom k August 8, 2014, 9:16 am

    Vuke is the one I went for, 100 companies of diversification is enough for me!
    Can anyone tell me is the dividend yield on this fund really 6.76% as the Morningstar page suggests? http://www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P0000WA5M

    I thought ftse 100 yield was around 4% ish, so why the uplift? Any thoughts welcome. Trying to minimise income…


  • 302 L G August 12, 2014, 3:42 pm

    Please explain what a ‘value product’ is. Aren’t all the funds you are recommending supposed to be good value.

  • 303 The Investor August 12, 2014, 10:08 pm

    @LG — Value in this case refers to the *contents* of the fund (what it invests in) not the fund itself.

    Value funds are funds that are biased towards holding so-called ‘value’ shares.

    And what, pray, are those? 🙂 This article may help: http://monevator.com/return-premiums-introduction/

  • 304 Dik August 13, 2014, 2:44 pm

    @Tom k – I am also confused about this! Seems that this ETF paid out 4 divis over the last year totalling just over £2, which on current price of £30 is approx 6.76%, much more than FTSE 100 yield. Most of this seems to be due to a large divi paid in mid March 2014. This could be because most FTSE 100 companies pay a larger divi in March BUT interestingly a chart comparing this ETF with FTSE100 shows a large relative drop. I’ve no idea why Vanguard would do this.

  • 305 Tom k August 13, 2014, 3:43 pm

    Thanks Dik- will take the conservative view when tax planning! Thanks

  • 306 Snowman August 28, 2014, 8:11 pm

    Vanguard are cutting charges on a number of their ETFs and funds according to a number of news sources.

    Nothing on the Vanguard website yet.

  • 307 The Investor August 28, 2014, 10:26 pm

    @Snowman — Thanks — We have the story on Monevator already. 🙂 I linked to a source in the comments (sorry, on phone so can’t easily paste link in here!)

  • 308 Snowman August 29, 2014, 7:20 pm

    Ooops!!! Somehow managed to miss that article. It was a long day yesterday that’s my only excuse. Ha ha.

  • 309 DonF September 2, 2014, 7:59 pm


    I was just about to press ‘buy’ on this one when I noticed that it has an ‘ongoing charge’ of 5% (!) besides the AMC of 0.4% according to Morningstar. Does that actually mean what I suspect it means? Are HSBC really charging you 5.4% to hold this ETF?! That can’t be right or can it?

  • 310 David September 2, 2014, 8:03 pm

    I think the 5% is only if you trade directly with HSBC rather than through a brokerage. Similar thing with DB x-trackers although at 3%. May want to check that though!

    What’s the code for it and I’ll check?

  • 311 DonF September 2, 2014, 8:05 pm

    Yes, that could be it. The ISIN is IE00B5L01S80. Thanks David.

  • 312 David September 2, 2014, 8:08 pm

    Yes that’s the entry / exit charge if you traded direct rather than on an exchange. Realistically I doubt anyone would ever do this

  • 313 Vanguardfan September 7, 2014, 12:47 pm

    Does anyone have any views (rationally based or otherwise!) as to the best alternative global ETFs and OIECs that are not Vanguard?
    I’ve identified Fidelity, Aviva and L&G global tracking index funds, and HSBC and ishares ETFs (but iShares is USD denominated).
    I feel I need to spread my assets between fund managers a little more…

    Alternatives for UK trackers (100, 250 and all-share) also sought. Am finding it hard to shake off my irrational brand loyalty…

  • 314 DonF September 13, 2014, 9:25 am

    Lyxor has launched what looks like a global value factor ETF (with, of course, the word ‘beta’ in the name) at 0.4% TER.


  • 315 Robert September 13, 2014, 6:28 pm

    Does anyone know of any low-cost broker still offering the Dimensional funds to Joe Public? If not, I guess I’ll have to look at this new Lyxor value fund. Or just ignore “value” completely…..

  • 316 The Accumulator September 14, 2014, 5:16 pm

    @ Don – thanks very much for the link. We’re still very underserved in the UK with value options.

    @ Robert – I doubt it. DFA has systematically been shutting down availability on the brokers that were selling them. It’s against their creed. Here’s some more value options: http://monevator.com/uk-value-premium-funds/

  • 317 James September 18, 2014, 2:46 pm

    The Monevator, thanks for the article. Is there an alternative to the 2 gold ETC’s you outlined? I’m with iWeb and both don’t appear to be available. Searching iWeb there are a few alternatives, but they charge anywhere between 0.75% and 1.0%, which is definately not in the passive low cost spirit!

  • 318 Karen September 19, 2014, 7:26 am

    @ James – I had the same issue with iWeb – when I rang them to see why I couldn’t find CRBL, they said that as they can only trade it via one source, they are unable to get ‘best price’ so won’t list it – that’s if I correctly understood what they said.

  • 319 lpgm September 19, 2014, 8:32 am

    Yes, IWeb has also told me they don’t offer stocks with only one market maker. But if you don’t see the stock/fund you’re after, it’s worth checking with them – the same goes if the website says you can’t put it in your ISA.

  • 320 The Accumulator September 20, 2014, 3:09 pm

    @ James – try XGLD – db Physical Gold ETC. SGLD seems to be tradeable on iWeb: https://halifaxiweb.digitallook.com/security.cgi?csi=2085889
    As does XGLD

  • 321 DonF September 21, 2014, 9:47 am

    @ TA – The Lyxor Value ETF I mentioned earlier is listed on the London Stock Exchange although still very new.

  • 322 The Accumulator September 21, 2014, 11:44 am

    @ Don – it sure is. Ticker SGVB. But Lyxor don’t even list it on their website yet. Once they publish some literature on it then we can take a view. It’s always a good idea to give a new ETF time to bed down too.

  • 323 James September 22, 2014, 10:28 am

    @The Accumulator/others, bizarre, I just had a web chat with them, they said they WERE NOT available on iWeb, yet there they are! How did you find them, The Accumulator? I still cannot find either one using the search tool and have tried several combinations of the name/code/etc (forgive me in advance if I’m missing something obvious!)

  • 324 James September 22, 2014, 10:30 am

    @The Accumulator/others, just figured it out after I typed the comment! The trick is to deselect OEIC and Unit Trusts from the search options, then a search for gold will bring them up! Not obvious (unless I’m a little challenged, that is)

  • 325 James September 22, 2014, 10:31 am

    The iShares Physical Gold ETC is also available on iWeb (SGLD)

  • 326 James September 22, 2014, 2:04 pm

    Things get more bizarre. Although all of the gold ETF’s can be found on iWeb’s lookup tool, only SGLD and XGLD are available to trade (look for them under the UK equities tab, not the funds tab). The iShares one is unavailable (except if you buy the USD version), despite it being available according to the lookup tool.

  • 327 Tom September 25, 2014, 10:44 pm

    The last time I checked this article for accumulating Emerging Markets funds for an ISA the following fund was listed:

    BlackRock Emerging Markets Equity Tracker D Acc GB00B84DY642 0.26%

    but now it seems to have been replaced by:

    Fidelity Index Emerging Markets Fund W (GB00BLT1YT76) OCF 0.25%

    Is the 0.01% difference in charge the reason? Is there another reason?

    The two funds have different allocations regarding developed Asia and emerging Asia neither of which I have strong preferences about but the Fidelity fund was created this year. Is there anything I should be careful of?

  • 328 The Accumulator September 27, 2014, 12:21 pm

    @ Tom – this list is collated on the basis of cost, so there’s no intended editorial comment on the BlackRock version. The advantage of a fund with an older track record is that you can be more confident in how well it tracks its index and unquestionably that’s more valuable than a 0.01% sliver of cost. Stick tracking error in the search box for some ideas on how to measure tracking error / difference.

    Re: differing allocations to developed and emerging Asia – this might matter if you had other funds covering these regions and you wanted to strictly control your asset allocation, or if your job depended on these regions and that in turn influenced your exposure. Those differences will influence the eventual returns of the two trackers, but as none of us can predict the future it’s not worth worrying about.

  • 329 The Rhino September 30, 2014, 2:15 pm

    Well I’m going to take the plunge and buy my first ETF via a junior ISA, VUKE.L

    I vaguely remember an article on some issues surrounding the fact that vanguard ETFs are based in Ireland? Haven’t been able to dig it out – hopefully there weren’t any showstoppers in there though..

  • 330 King of Kelsall October 1, 2014, 6:15 am


    Thanks for the up-date: I’ve found the various iterations of this article to be a really handy resource.

    I’ve just had a quick look at the Vanguard website and the ETF page seems to indicate that four new ETFs are about to be launched, covering FTSE 250, Europe ex-UK, Developed World and North America.


    All look pretty cost competitive and could be up for consideration in the best buy league tables!

    Not sure if they are actually available to buy yet, but thought you might appreciate the heads-up.


  • 331 The Accumulator October 1, 2014, 8:16 am

    Great stuff, King of Kelsall, thank you!

  • 332 L October 1, 2014, 1:27 pm

    You can now view the fact sheets for those four funds on the vanguard website.

    You can find the full list of consituents and weightings for FTSE indexes at the link below:


  • 333 Tremaine October 1, 2014, 2:56 pm

    I’m curious about the HSBC FTSE EPRA/NAREIT Developed ETF (HPRD) OCF 0.4%. Is there any reason that this is quoted rather than HPRO? The only difference I can see is that HPRO is in £ and HPRD is in $. Is there any advantage/disadvantage for a UK investor to be invested in HPRD rather than HPRO?

    (note: I’ve invested in HPRO in my ISA)

  • 334 The Accumulator October 1, 2014, 4:29 pm

    No difference. The £ version is just a consumer nicety (people are reassured by the familiarity) but the base currency is still in $ so you’re still subject to currency risk.

  • 335 Tom k October 1, 2014, 8:02 pm

    Can you please list a £ gold fund, and also an energy fund (£ and $)?


  • 336 @algernond October 1, 2014, 10:04 pm

    Excellent on the added Vanguard stock ETF’s. I hope they widen the bond ETF offering soon also…

  • 337 Geezer October 5, 2014, 12:21 pm

    Does anyone here have concerns over the stock lending activity of ETFs?

    The more I look into it the less I like ETFs. But perhaps my concerns are not valid.


  • 338 Rob October 6, 2014, 9:17 am


    You are right to be concerned, and not just about stock lending activity.

    One ETF has an advertised TER of 0.4% but has securities lending income of £83,000. However, that is swamped by the £246,000 it incurs in Realignment Costs which takes the TER up to 0.46%. Still cheap but it is clear that there are issues such as counter-party risk, liquidity that need to be considered.

  • 339 Davros October 6, 2014, 3:38 pm

    Hello, thanks for an excellent site.


    Fidelity Index UK Fund W (GB00BJS8SF9) OCF 0.09%

    Could I check the ISIN code please? On trustnet it’s listed as:



    There is a P-class unit listed as GB00BJS8SF95.


  • 340 The Accumulator October 6, 2014, 8:34 pm

    @ Geezer – you’re concerns should be applied to the whole financial industry rather than just ETFs. Security lending is standard practice across a great many investment vehicles – the difference with ETFs is that they’re transparent about doing it, which you can’t say for much of the industry. Security lending does create counter-party risk, but you can find ETF providers who don’t engage in this practice if you’re worried.

    @ Davros – you’re quite right. My mistake. Thanks for letting me know. Will update the piece. Shouldn’t you be off conquering the universe? 😉

  • 341 DonF October 8, 2014, 10:58 pm

    iShares has just launched four new global factor ETFs at 0.3 TER including a small cap, value and a momentum one:


    There are also some new ETFs from Vanguard:


  • 342 Steve October 9, 2014, 11:26 pm

    I’m sure I’m being hopelessly naive, but what is the difference between Fidelity Index UK Fund W (ISIN: GB00BLT1YM08) and Fidelity Index UK Fund A (ISIN: GB0003875324). I’ve read the KIIDs and I don’t see anything obvious.

    At least on the Intelligent Investor website, the W fund shows an AMC of 0.09% and “-” for TER, while the A fund shows an AMC of 0.10% and a TER of 0.30%. Does the A fund really charge three times as much, or am I being deceived? Even if I’m being deceived, why would anyone choose the A fund over the W fund, since the W fund is at least fractionally cheaper judging from the AMC?

  • 343 Naar October 10, 2014, 8:27 am

    Steve, some people may not have a choice. A class funds are usually ‘retail’ ones that any punter can buy. There are normally other classes of funds for institutional investors, etc., that have higher minimum purchases and lower TERs. When you buy through a platform you can often get access to these fund classes.

  • 344 The Accumulator October 11, 2014, 9:43 am

    @ Steve – the A fund is an older legacy Fidelity index fund with a TER / OCF of 0.3%.

    The W fund is a newer version of the same thing that Fidelity brought out to compete with Vanguard, it’s OCF is 0.09%.

    There’s even a P version you can buy from Fidelity at 0.07%.

    Forget AMCs and look for the OCF / TER on websites. If they only give you the AMC then look at a different site.

    You’ll often find that there’s an alphabetti spaghetti of share classes attached to the same fund. They are different incarnations of the same thing – some are institutional versions as Naar says, some are cheaper versions available to certain platforms on an exclusive basis and some are older versions they don’t bother to reduce the price on because they’re happy to fleece inert investors.

  • 345 Steve October 11, 2014, 3:14 pm

    Thanks guys, that puts my mind at ease.

  • 346 Simon October 24, 2014, 10:35 am

    Anyone else having trouble buying Fidelity Index World I Acc (GB00B7LWFW05, I10K) on Interactive Investor?

    The boring details are: on 23rd Oct, my buy order for the fund was rejected. When I called II to find out why, I was told the fund is “sell tradable only” but that’s about all they could tell me – nothing about why, or whether this is permanent or temporary. I then called Fidelity who said as far as they were concerned the fund was ok buy via II. A second call to II, to follow this up, got the same it’s “sell tradable only” response.

    I’d welcome any thoughts or suggestions… as it now looks like I need to find an alternative World index fund, on Interactive Investor, at least.


  • 347 emanon October 28, 2014, 11:31 pm

    hello again

    Its a sensible move to hedge yourself within the fixed income assets of your portfolio right? Its been a while since i’ve done some reading on the current state of the bond market but assigning both

    SPDR Barclays Capital 1-5 Year Gilt ETF (IE00B6YX5K17) OCF 0.15%
    Vanguard UK Inflation Linked Gilt Index fund (GB00B45Q9038) OCF 0.15%

    is still a safe way to go??

  • 348 Snowman November 4, 2014, 9:19 am

    The Vanguard dilution levy is now 0.2% reduced from 0.4% on their UK FTSE all share tracker from 3rd November 2014 according to the factsheet.

    Haven’t had chance to check if any of the other dilution levies has changed.

  • 349 allie November 4, 2014, 2:56 pm

    I believe Vanguard have been merging the FTSE UK allshare tracker and their FTSE UK equity index tracker over the weekend. This may tie in with what Snowman said.

  • 350 Snowman November 4, 2014, 4:14 pm

    Yes. Good spot Allie.

    As if by magic my Vanguard UK equity index fund on ATS has changed into the FTSE U.K. All Share Index Unit Trust (yesterday?).

    Not had any message about it.

    I’ve got a lot more units now but the unit price is correspondingly lower. The conversion calculation is correct.

  • 351 PassiveNoob November 4, 2014, 4:47 pm

    For info, I did get a notification via iweb on 29/9/14 saying “Vanguard Investments UK LTD (Vanguard) is proposing a Merger by way of a Scheme of Arrangement of its Vanguard FTSE UK Equity Index Fund Acc with its Vanguard FTSE UK All Share Index Unit Trust Acc at a rate yet to be confirmed. Vanguard is of the opinion that, as the two Funds follow the same investment strategy and as the needs of both retail and institutional investors can be met equally under the Unit Trust’s structure, it is appropriate to manage the Funds as a single, combined fund going forward. The Merger is subject to shareholder approval at the shareholder Meeting to be held on 17th October 2014. Following such approval, the Merger is expected to become effective on 1st November 2014.”

  • 352 Snowman November 5, 2014, 12:59 pm

    There is now an item about the fund merger and reduction in dilution levy on the Vanguard website


    For each unit in the FTSE UK equity index fund you should have got 1.28014556 units in the FTSE UK all share index unit trust according to my conversion.

  • 353 ABC1 November 7, 2014, 2:40 pm

    I have a portion of my portfolio allocated to global inflation linked bonds. I purchased the Fidelity Global Inflation Linked Bond Fund GBP Hedged which is actively managed – ongoing charge is 0.52% plus the platform charge of 0.2%. I must therefore be paying 0.72% pa for an actively managed fund which seems to underperform its benchmark (Barclays Global Inflation-Linked TR Hdg GBP).

    I had already looked at the db-trackers XGIG ETF but noticed that it was a synthetic ETF, which did put me off a little. The other ETF i-shares IGIL is priced in USD so I presume you are exposed to currency risk. The L&G tracker looks a good bet but as it’s a fund rather than an ETF it would be subject to a platform charge of some amount (mine being 0.2%).

    Does anyone know of a physically replicated ETF that doesn’t stray too far off its benchmark?

  • 354 The Accumulator November 7, 2014, 5:33 pm

    @ Snowman – thank you as ever! Will update over the weekend.

    @ ABC – those are the only 3 passive global inflation linked bond options I know of. I would only go for XGIG because that’s the only one hedged to the £. The L&G fund would suffer from currency risk too as its unhedged.

    I think the synthetic ETF scare has been overdone and wouldn’t let it stop me investing in an asset class if a synthetic ETF was the only way to get exposure.

  • 355 ABC1 November 10, 2014, 10:42 am

    I agree with you that it probably has been overdone. Has there actually been a failure of a counterparty in an ETF? I am not aware of one, but then I am not in the investment or financial industries.

    I’m not sure if the passive funds can guard against deflation by avoiding bonds which do not offer nominal face value floor (guaranteeing the capital and coupon face value in the event of negative inflation – i.e. deflation).

    Overall though, on cost grounds alone I may eventually transfer to the passive XGIG.

    @ The Accumulator – The L&G tracker says it hedges back to sterling on a monthly basis – see “Investment Philosophy” its fact sheet. But I suppose you still face the platform fee with that one.

    Thanks for a super and informative article though – will you be keeping it updated?

  • 356 dawn November 12, 2014, 9:41 pm

    for my bond allocation im looking for an
    Emerging Market Goverment bond etf
    does anyone know of one ? I believe they are good and offer over 4% yield. can anyone help?

  • 357 ABC1 November 13, 2014, 10:55 am

    I have this emerging market govt bond etf: EMDL


    It tracks the Barclays Emerging Markets Local Currency Liquid Government Index, TER is 0.55% and the current yield is 5.77% according to the above. Not recommending it, but it’s the one I found some time ago.

  • 358 dawn November 13, 2014, 2:08 pm

    many thanks, I will check this one out.
    I did find a vanguard one VWOB .

  • 359 ABC1 November 13, 2014, 2:24 pm

    VWOB is a US based Vanguard ETF. The SSGA one is domiciled in Ireland as are many of the “UK” ETFs.
    I could not find this type of ETF on the Vanguard UK site, but it was in the US site. I can’t remember whether EMDL fund pays dividends in dollars or GBP in any case, but the Vanguard one will be in dollars, so there will be a currency complication there. I’ll check which currency EMDL dividends when I get a chance.

  • 360 ABC1 November 13, 2014, 2:32 pm

    EMDL is GBP London listed trading in £ so the dividends should be paid out that way too – one would think

  • 361 dawn November 13, 2014, 8:41 pm

    many thanks .. that’s just the exact info ive just found out too.
    EMDL sounds the better one as its in local currency bonds which I found out have shorter maturities than US dollar bonds and they wont hurt as much if interest rates rise . am I brave enough to add to my portfolio????

  • 362 ABC1 November 14, 2014, 10:42 am

    I have held EMDL for just under 2 years now – it has lost just over 8% in capital value since then, but that has been compensated by the coupon payments. Tim Hale’s Smarter Investing does not recommend Emerging Market bonds due to their price volatility. I suppose he has been proved right in my case, but I will continue to hold them for the relatively high yield.

  • 363 dawn November 14, 2014, 10:15 pm

    many thanks for your insight. ive got tim hales book, I will look up what he says about EM bonds .but yes the yield is attractive @ almost 6%.

  • 364 PJ November 25, 2014, 10:29 am

    The SWIP Foundation Growth B Fund doesnt seem to be accepting new investment at least on ii.

  • 365 Eagleeye November 25, 2014, 9:05 pm

    They have changed the name of Scottish Widows Investment Partnership – Foundation Growth B Fund Acc to Aberdeen Foundation Growth B Fund Acc with effect from the 24th November 2014.

  • 366 PassiveNoob December 23, 2014, 5:39 pm


    I’m changing a cash ISA into the ‘low-volatility’ (bond) part of a currently equity-only ISA. I’m after a one-off slug of (from above):

    UK Government bonds – mixed duration
    Cheapest:Vanguard UK Government Bond ETF (VGOV) OCF 0.12%
    Next best :Vanguard UK Gov Bond Index (VIUKGO) OCF 0.15%

    The ETF is newer & cheaper (and has no stamp duty) – I re-read the “ETFs Vs index funds: The ultimate battle of the trackers” post from 2010, and the conclusion was index funds are simpler and easier to manage…

    But with the 2 products investing in such similar things, is there anything else to consider? Does the ETF pay out yields which have to be re-invested, compared with the Accumulation nature of the fund?

    Any comments gratefully received 🙂

  • 367 Vanguardfan December 23, 2014, 10:17 pm

    Yes, I think you’ve identified the main issue- the OEIC (fund) can be bought as either income or accumulation units, the ETFS is income producing. Brokers may also have different charging structures for ETFs and funds (both in terms of transaction costs and platform fees). ETFs can also be bought in real time, which matters to some people, but they also have a bid offer spread (though it should be very small for this particular ETF).
    Personally, I prefer to invest in accumulation units of OEICs in my ISA and use brokers which are cheap for this.

  • 368 David December 28, 2014, 7:43 pm

    I’ll shortly be moving some cash ISAs into global trackers and was considering just getting more of the Vanguard Dev World Ex UK (VVDVWE). Not truly global as “Ex UK”, so I’ve also considered the Fidelity Index World Fund Acc which has a similar annual charge of 0.15%. However I also looked at the Vanguard VWRL ETF.

    The Fidelity and VVDVWE funds show very similar performance over the past year. In contrast, the VWRL ETF lags by about 4%. Comparison of the holdings of the ‘global’ ETF and Fidelity funds show they are broadly similar … both in equity held, sectors and geography (VWRL has less US exposure by a few percent, but nothing much else to my untrained eye).

    What am I missing? The VWRL ETF has a TER of 0.25% which surely can’t account for the difference in the returns. Other than the immediate gratification of ETF dealing (which I do so rarely I couldn’t care less about) there seems no reason to consider the ETF any further.

    [Note … all comparisons made using the HL website which, although not worth the 0.45% platform charge, remains my favourite]

  • 369 The Accumulator December 31, 2014, 10:50 am

    VWRL has an emerging market component while the Fidelity fund is developed world only. VWRL is better diversified although it will be a little more volatile due to the EM component. It’s also worth mentioning that around 5 years is the minimum worthwhile comparison.

  • 370 Eagleeye January 4, 2015, 10:17 am

    I was looking at cf lindsell train uk equity d fund .The returns are impressive under FTSE all share index.The literature states that they have invested in UK all companies and UK small market shares.The HL further shows that they have invested in America as well.Do you think that this fund is better than others or is just an expensive tracker.

  • 371 Vanguardfan January 14, 2015, 9:51 pm

    I have a CGT management issue and want to invest in the ‘next best’ alternatives to Vanguard UK all share and Vanguard Dev World ex-UK. They must be income units. I note above that the alternatives suggested are the new Fidelity trackers – for some reason I am not very keen on Fidelity – anyone talk me out of this irrational brand aversion, or suggest an alternative? Legal and General? HSBC?

  • 372 Paul S February 25, 2015, 12:34 am

    question on the property suggestions above. I have looked at ■BlackRock Global Property Securities Equity Tracker D (GB00B5BFJG71) OCF 0.23% and find its a Unit fund and will attract additional 0.2% charges from my SIPP provider…is this right (its a fund not a ETF) or have I missed the ETF version of this?

  • 373 dawn February 25, 2015, 4:35 pm

    tim hale suggesst a value tracker to be included in a portfolio. not sure what value really means. is it underpriced stocks? anyway dbx trackers do one XDEV with a 0.25% charge. which seems heavy with japan though. any reason as to why you suggest VHYL instead?

  • 374 ABC1 February 25, 2015, 6:33 pm

    @Dawn – Maybe because Vanguard is a larger fund manager or it follows its benchmark so closely (4.5% of the fund in Japanese stocks). But it is slightly higher on the AMC. May be worth checking the dividend yields as this is the main purpose of these funds – high dividend yield.

  • 375 dawn February 25, 2015, 10:00 pm

    @ABC1 thanks..
    ok, so value means stocks with high dividend yield as opposed to say ‘growth stocks which would be more about the stocks capacity to grow in capital gains as opposed to what it spews of in yield?

  • 376 abc1 February 25, 2015, 10:47 pm

    Yes very approximately that’s about it – although ‘growth’ doesn’t always grow and ‘high yields’ can sometimes vanish into zero yield or much lower yields (e.g. RSA, Tesco, and Halfords). That’s why I’ve sold most of my so called ‘high yield shares’ and replaced them with high yield ETF’s such as VHYL, EUDV and IUKD – you don’t need to follow what’s going on in each individual company, whilst the ETF benchmark criteria will automatically replace any dividend cutters with new stocks that fit the ‘high yield’ requirements (along with other factors such as dividend cover, market capitalisation, dividend history etc.) Hope that demystifies them a little

  • 377 dawn February 26, 2015, 10:17 pm

    thanks for clarifying.
    i understand , following individual companies all the time is stressful , if i cannot get my full isa allowance together one year i may think about selling down slowly my individual shares and putting money in isa in a high div paying tracker fund/ETF . that way its takes the work away . only problem with this, ive read, is div paying etfs/ trackers can be cyclical.

  • 378 The Accumulator February 27, 2015, 9:54 am

    @ Dawn – here’s a piece explaining value: http://monevator.com/the-value-premium/

    High dividend yield is one form of value though is generally held to be the weakest.

    Companies with strong book to market price, sales to price and cash flow to price are other common ways of measuring value equities. The article explains in more detail.

    The iShares and db X value ETFs weren’t available last time I updated the article which is why they don’t appear in the list.

    You need to do due diligence on any of the above trackers you’re considering. As mentioned in the piece, I only list according to cost i.e. the Ongoing Charge Figure – as a jumping off point for your own research.

    Value funds are likely to be volatile and will deviate substantially from the market’s performance at times – potentially for years. Often that can be a cause of pain for investors when the performance is on the downside. It’s a phenomenon known as tracking error regret and it can be very tough to live with which is why many find value investing hard.

  • 379 Paul S February 27, 2015, 4:00 pm

    Hi All,

    Apology for the above post asking if the blackrock global property option was a fund or a ETF.

    I was cranking the spreadsheets today and noticed I have reached that point where my providers ‘custody’ charges have reached a maximum annual cap level….therefore the decision between ETF and OEI fund only matters in so much as ‘is the fund or ETF a better option for the asset allocation I want’ also its nice to have funds as an option as there is the ACC version which makes re-investmnet of dividends very easy.


    Paul S

  • 380 UK144 April 10, 2015, 3:16 pm

    Really useful list. I too have the Fidelity Global Inflation Linked Bond Fund GBP and looking for a cheaper better performing option. My platform says that the XGIG is not available in an ISA – is that general or just my provider – anyone know?

  • 381 ABC1 April 10, 2015, 5:41 pm

    I have it in my SIPP so I don’t know why it would not be available in an ISA – check with the broker maybe.

  • 382 old_eyes April 21, 2015, 10:16 am

    I have the Vanguard UK Inflation Linked Gilt Index in my portfolio, and whilst browsing around see that it is classified by my platform as a hedge fund. Checked all the other inflation linked gilt funds and they are classified the same way.

    Does anyone have an explanation of why this should be the case. In my ignorance I cannot see the reason.

  • 383 Kris May 5, 2015, 1:43 pm

    More great food for thought….only I seem to have a bit stuck in my throat, which is probably just me rather than the food.

    I have been researching for some european passives. One of the lowest is Vanguard FTSE dev ex UK with OGC of 0.12%. It tracks, funnily enough, the FTSE dev ex UK index. I also identified (following your great advice on searching Morningstar) iShares Euro Stoxx 50 UCTIS ETF which has higher charges at 0.35%.

    Righto – says the ‘minimum cost is King’ bit of my brain – thats much more expensive over time. However the iShares ETF tracks a different index; spookily enough its the Euro Stoxx 50 index.

    When you compare the returns of the underlying indexes over 3 years and 5 years the EuroStoxx index beats the FTSE index handsdown.So now I’m thinking whats the impact of a smaller cost on a smaller return, versus a bigger cost on a bigger return?

    In my simple head ( I am maths phobic) is this as easy as taking a nominal value invested, working out the new gross value based on return % over the 5 years, then working out the cost of the OCG over those five years and subtracting from the gross value of my nominal amount to leave a net amount (Gosh!)

    e.g 1000GBP invested. 57.3% returns over 5 years = new gross value of 1,573GBP. OGC of 0.35% = 27.53GBP, which subtracted form my gross value of 1,573 = a net value of 1545.47GBP.

    Now I know thats simplifying the probelm and would probably need to work out discrete performance and add it all up over the years to be more accurate, but in essence does this give an accurate enough view or have I missed the plot completely, or missed the poitn completely?

    Sorry to turn into a bit of math question but anyone with a better head for figures than I would be most wlecome to help!

  • 384 Kris May 5, 2015, 1:46 pm

    Correction to post above. To clarify its the FTSE Dev Europe ex UK. Not the global one. So they are both European indexes. Sorry.

  • 385 scot May 5, 2015, 5:56 pm

    Hi, re Fidelity Index Emerging Markets Fund ‘W’ Acc with OCF of 0.25% mentioned in this article – can anyone explain the difference between the ‘W’ class and the ‘P’ class that’s available with a lower OCF of 0.23% ?
    Much searching turned up a newspaper article which indicated since the move to clean funds, Fidelity were offering slightly lower fees on their funds if purchased through their own platform, which could explain the two classes. However, on iii I’m able to purchase both versions, so is there any reason not to go for the lower fee one?

  • 386 Kris May 5, 2015, 6:32 pm

    Hi Scot.

    Check the prospectus out. You can get a copy here: http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000SKX8&tab=14&DocumentId=77d9c76abb2b04d4afd50b4699e3fa71&Format=PDF

    Looks like the ‘P ‘ class is only available through partner platforms and has lower minimum purchases. The ‘W’ is available to everyone through other channels so probably is the one with higher charges?

    Happy hunting.

  • 387 scot May 5, 2015, 7:06 pm

    Thanks Kris – that doc states the cheaper ‘P’ class is “Available only through platform distributors who are pre-approved by Fidelity”. I wasn’t aware such pre-approval went on. The Accumulator, if reading, may wish to update the article to reflect the lower charge, not that 2 basis points is going to have a material effect for most.
    Next question – why does the lower charging class of the fund have slightly poorer performance YTD (+12.21% Vs +12.24%) ?

  • 388 The Accumulator May 6, 2015, 8:14 pm

    @ Scot – I’m reading but sadly I don’t have the time to unknot all the exclusive deals going on. Generally, speaking they don’t make a more expensive platform the cheapest anyway. So I’ll cover off the cheapest universally available trackers but it’s always worth checking if your platform has a deal.

    @ Kris – one index beating another for the last 5 years is no guarantee it will do so for the next 5 – assuming there are constituent differences. For a fuller few of costs, take a look at the articles on the site on tracking error and tracking difference.

  • 389 Kris May 7, 2015, 7:08 am

    @ The Accumulator – thanks, I was actually in the middle of researching the tracking error but had not read those articles so was very timely.

    Have to say its hard work trying to figue it out. Especially true when you get two misleading bits of information from the same source. I found the indexes I needed on the FE Trustnet charting tool and so have worked out tracking error for funds tracking the index. Noticed however that one ETF shows on its performance page cumulative returns of +20 / +75.3 & +80.7 over 1,3 & 5 years….however when selected that etf on the plotting tool it came out as +7.8 / +59.0 & +57.1 which is wildy different from what its reportign on its overview page.

    Guess I needed to check out the factsheets anyway, but boy you’re not wrong when you said it’s difficult to get the information you need.

  • 390 Scot May 7, 2015, 12:25 pm

    To update on the ‘P’ & ‘W’ classes of Fidelity Emerging Markets Index as I mentioned above – I’m 99% sure that as of a couple of days ago both were listed to buy on iii, but when I checked last night only the universally available ‘W’ class could be bought through that platform.

  • 391 Paul S May 20, 2015, 4:59 pm

    Hi all,

    I am looking for a index tracker for the FTSE 250, can’t seem to lay my hands on one. Does anybody know of any with a decently low TER or course!

    – keeping it simple – the whole shebang in Vanguard 80% equity/Blackrock REIT/Vanguard U.S. Equity –


  • 392 Vanguardfan May 20, 2015, 9:14 pm

    @paul – there are ETFs tracking FTSE 250 offered by Vanguard, iShares and HSBC -and possibly others (SPDR?). The only fund I’m aware of is Blackrock, only available in accumulation units.

  • 393 Paul S May 21, 2015, 8:26 am

    Hi Vanguardfan

    Thanks! went and had a look and HSBC do a FTSE250 Acc fund with a 0.10% charge (will be a bit more wrapped up in youinvest but not too much) Thanks for the pointer!

    Paul S

  • 394 Linda May 23, 2015, 2:59 pm

    The latest OCF for the Legal & General L&G International Index Trust I (GB00B2Q6HW61) is 0.13% rather than the 0.31% shown in the article, according to the key fact document on Morningstar.

  • 395 eagleuk June 1, 2015, 8:02 pm
  • 396 Bruce July 28, 2015, 6:55 pm

    Looks like Blackrock have upped the game a little bit with announcements today…

    Their UK Index Tracker (D class) OCF reduced from 0.16% to 0.07%, beating the Vanguard leader on this post and without the pesky initial charge either.

    They’ve also reduced the charges on their US and Continental European trackers, although annoyingly not on their emerging markets or corporate bond trackers. Apparently no reduction in sight for these, although the reason for the cuts in the others was the increased size of the funds, so maybe if the funds grow some more!

  • 397 theta August 7, 2015, 11:02 am

    Is it possible that securities lending could change the league tables in terms of actual total return? More specifically, all the top funds from what I can see don’t lend their securities out, whereas some others do. For example IWRD, which is very similar to SWDA, charges .5% but lends securities out which may help bridge the gap (or even come ahead, there are some examples where ETFs are effectively free if you include securities lending income: http://www.forbes.com/sites/simonmoore/2014/08/29/securities-lending-makes-some-etfs-free/). How can we see the past return enhancement thanks to securities lending?

  • 398 theta August 7, 2015, 11:32 am

    To partially answer my own question, I just found out that IWRD specifically had 0.03% return from securities lending in the last 12 months, not nearly enough to tip the scale. Still worth checking this for other funds though.

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