This is our updated list of low-cost index funds and ETFs that’s maintained to help UK investors smash the cost of their investments.
Scroll down and you’ll find the cheapest index trackers available in the UK from reputable fund providers. These funds can form the building blocks of a competitive, diversified portfolio that encapsulates Warren Buffett’s dictum:
“Price is what you pay. Value is what you get.”
Crushing charges is a core component of sound investing. Because 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 15 years.
These two types of index tracker are the best value investment vehicles available and the right choice for passive investors .
Low-cost index funds and ETFs – the Total Cost of Ownership
Our cheapest tracker fund list is divided into the key sub-asset classes you may wish to invest in.
The picks per asset class are ranked purely by cost.
We previously used the Ongoing Charge Figure  (OCF) to order the list. This is the best known fee measure which all funds must publicly disclose.
But we’re now switching to a Total Cost of Ownership (TCO) model. The TCO is the sum of a fund’s transaction costs  and its OCF.
Transaction costs are the fees and taxes investment vehicles inevitably incur when trading their underlying assets.
Transaction costs are not unique to index funds and ETFs. Plain, broad-market index trackers actually generate low trading fees in comparison to more active and specialised funds.
That said, now transaction costs are freely available we can see that the average TCO is quite a bit higher than the average OCF.
Total cost of ownership is about twice as high for even the low cost index funds and ETFs that comprise our UK large equity picks.
Global property index trackers and small cap equity cost a quarter or a third as much again by TCO.
But highly efficient markets like global equities are barely perturbed by transaction costs.
Now that we’re able to fold transaction costs into fund charges (thanks to financial data provider Morningstar) the only slice of the fee pie missing is the bid-offer spread .
This shouldn’t be a significant cost for passive investors anyway, but Hargreaves Lansdown publish an estimated spread for investments where this is a factor.
Cheap index trackers and transaction costs – more detail
Transaction costs may well fluctuate more than OCFs from year to year, especially if there’s excessive turnover in the fund’s index.
Fund providers have various methods for managing transaction costs including when and how they trade.
They may also employ revenue generating techniques such as securities lending to offset transaction costs.
The rules and composition of the tracker fund’s chosen index may also help it trade less than rivals.
Your view on securities lending and index selection are one among a range of other factors  to consider when buying a low-cost index fund. It’s always worth reading any documentation to make sure a given fund fits your bill.
Some index trackers register negative transaction costs but I’ve disregarded that from the TCO calculations below. That’s because negative transaction costs may not be sustainable over the long-term.
Using our index trackers 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 removed our limited Environmental, Social, and Governance (ESG) section and instead included an ESG index tracker option 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.
Right, let’s go grab some bargains!
UK large cap equity
- HSBC FTSE All Share Index Fund Institutional (GB0030334345) TCO 0.07%
- Fidelity Index UK Fund P (GB00BJS8SF95) TCO 0.08%
- Lyxor Core Morningstar  UK ETF (LU1781541096) TCO 0.1%
- HSBC FTSE All Share Index Fund C (GB00B80QFX11) TCO 0.11%
- Vanguard FTSE UK All Share Index Unit Trust (GB00B3X7QG63) TCO 0.11%
- L&G UK Equity ETF (LGUK) TCO 0.12%
The L&G ETF has an ESG remit.
UK mid cap equity
- Amundi Prime UK Mid and Small Cap ETF (PRUK) TCO 0.05%
- Xtrackers FTSE 250 ETF (XMCX) TCO 0.24%
- HSBC FTSE 250 Index Fund C (GB00B80QG052) TCO 0.25%
- Vanguard FTSE 250 ETF (VMIG) TCO 0.29%
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 0.51%
- iShares MSCI UK Small Cap  ETF (CUKS) TCO 0.58%
- Baillie Gifford British Smaller Companies B Fund (GB0005931356) TCO 0.7%
- JP Morgan UK Smaller Companies Fund (GB0031835001) TCO 0.83%
UK equity income
- Vanguard FTSE UK Equity Income Index Fund (GB00B59G4H82) TCO 0.28%
- WisdomTree UK Equity Income ETF (WUKD) TCO 0.35%
- SPDR S&P UK Dividend Aristocrats ETF (UKDV) TCO 0.46%
Global equity – developed world and emerging markets (All-World)
- HSBC FTSE All-World Index Fund C (GB00BMJJJF91) TCO 0.13%
- iShares MSCI ACWI ETF (SSAC) TCO 0.20%
- Fidelity Allocator World Fund W (GB00B9777B62) TCO 0.21%
- Vanguard LifeStrategy 100% Equity Fund (GB00B41XG308) TCO 0.23%
- L&G MSCI World Socially Responsible Investment (SRI) Index Fund I (GB00B0CNH9403) TCO 0.25%
- Vanguard ESG Global All Cap ETF (V3AB) TCO 0.32%
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%
- L&G Global Equity ETF (LGGG) TCO 0.11%
- Lyxor Core MSCI World ETF (LCWL) TCO 0.12%
- SPDR MSCI World ETF (SWLD) TCO 0.12%
- iShares Developed World Index Fund D (IE00BD0NCL49) TCO 0.12%
- Fidelity Index World Fund P (GB00BJS8SJ34) TCO 0.12%
The L&G ETF has an ESG remit. We’ve requested confirmation from Amundi that PRWU has zero transaction costs.
World ex-UK equity
- L&G International Index Trust I Fund (GB00B2Q6HW61) TCO 0.13%
- Vanguard FTSE Dev World ex-UK Equity Index Fund (GB00B59G4Q73) TCO 0.15%
- Aviva Investors International Index Tracking SC2 Fund (GB00B2NRNX53) TCO 0.25%
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 0.36%
- iShares MSCI World Quality Dividend ESG ETF (WQDA) TCO 0.38%
- Fidelity Global Quality Income ETF (FGQD) TCO 0.43%
- WisdomTree Global Quality Dividend Growth ETF (GGRG) TCO 0.43%
- Vanguard Global Equity Income Fund (GB00BZ82ZW98) TCO 0.58%
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%
- iShares MSCI World Small Cap ETF (WLDS) TCO 0.35%
- Vanguard Global Small-Cap Index Fund (IE00B3X1NT05) TCO 0.36%
- SPDR MSCI World Small Cap ETF (WOSC) TCO 0.46%
Emerging markets equity
- Amundi Prime Emerging Markets ETF (PRAM) TCO 0.1%
- Lyxor MSCI Emerging Markets ETF (LEMA) TCO 0.14%
- HSBC MSCI Emerging Markets Index ETF (HMEF) TCO 0.21%
- iShares Emerging Markets Equity Index Fund (GB00B84DY642) TCO 0.2%
- HSBC Emerging Market Sustainable Equity ETF (HSEF) TCO 0.31%
We’re awaiting confirmation from Amundi that PRAM has zero transaction costs.
Multi-factor – Global
- JPMorgan Global Equity Multi-Factor ETF (JPLG) TCO 0.26%
- Invesco Global ex UK Enhanced Index Fund Y (GB00BZ8GWR50) TCO 0.35%
- Amundi ETF Global Equity Multi Smart Allocation Scientific Beta ETF (SMRU) TCO 0.41%
- iShares Edge MSCI World Multifactor ETF (FSWD) TCO 0.56%
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%
- iShares MSCI Target UK Real Estate ETF (UKRE) TCO 0.43%
No index fund alternative.
Property – global
- iShares Global Property Securities Equity Index Fund D (GB00B5BFJG71) TCO 0.23%
- Amundi ETF FTSE EPRA/NAREIT Global ETF (EPRA) TCO 0.24%
- L&G Global Real Estate Dividend Index Fund I (GB00BYW7CN38) TCO 0.3
- HSBC FTSE EPRA/NAREIT Developed ETF (HPRO) TCO 0.31%
- SPDR Dow Jones Global Real Estate ETF (GLRA) TCO 0.43%
The SPDR ETF includes emerging markets exposure.
- L&G All Commodities ETF (BCOM) TCO 0.16%
- iShares Diversified Commodity Swap ETF (COMM) TCO 0.26%
- iShares Bloomberg Enhanced Roll Yield Commodity Swap ETF (ROLL) TCO 0.28%
- WisdomTree Broad Commodities ETF (COMX) TCO 0.29%
- Amundi Physical Gold ETC (GLDA) TCO 0.12%
- Invesco Physical Gold A ETC (SGLP) TCO 0.12%
- WisdomTree Core Physical Gold ETC (GLDW) TCO 0.12%
- Xtrackers IE Physical Gold ETC (XGDU) TCO 0.12%
Gold trackers are Exchange Traded Commodities (ETCs).
UK Government bonds – intermediate duration
- Invesco UK Gilts ETF (GLTA) TCO 0.06%
- Lyxor Core UK Government Bond ETF (GILS) TCO 0.09%
- Vanguard UK Gilt ETF (VGVA) TCO 0.1%
- Fidelity Index UK Gilt Fund P (GB00BMQ57G79) TCO 0.12%
- iShares GiltTrak Index Fund (IE00BD0NC250) TCO 0.12%
UK Government bonds – long
- Vanguard UK Long-Duration Gilt Index Fund (GB00B4M89245) TCO 0.13%
- SPDR Bloomberg Barclays 15+ Year Gilt ETF (GLTL) TCO 0.16%
- iShares Over 15 Years Gilts Index Fund (GB00BF338G29) TCO 0.16%
UK Government bonds – short
- Invesco UK Gilt 1-5 Year ETF (GLT5) TCO 0.06%
- L&G UK Gilt 0-5 Year ETF (UKG5) TCO 0.06%
- Lyxor UK Government Bond 0-5Y ETF (GIL5) TCO 0.09%
- iShares UK Gilts 0-5 ETF (IGLS) TCO 0.1%
UK Government bonds – index-linked
- Lyxor Core UK Government Inflation-Linked Bond ETF (GILI) TCO 0.08%
- Vanguard UK Inflation Linked Gilt Index Fund (GB00B45Q9038) TCO 0.13%
- iShares £ Index-Linked Gilts ETF (INXG) TCO 0.14%
- L&G All Stocks Index Linked Gilt Index Trust I (GB00B84QXT94) TCO 0.15%
Total global bonds hedged to £ (government and corporate)
- Amundi Index Global Aggregate 500M ETF (AGHG) TCO 0.09%
- iShares Core Global Aggregate Bond ETF (AGBP) TCO 0.1%
- iShares Global Aggregate Bond ESG ETF (AEGG) TCO 0.12%
- Vanguard Global Bond Index Fund (IE00B50W2R13) TCO 0.29%
- Vanguard Global Short Term Bond Index Fund (IE00BH65QG55) TCO 0.30%
All hedged back to Sterling.
Global government bonds hedged to £
- Amundi Index JP Morgan GBI Global Govies ETF (GOVG) TCO 0.17%
- iShares Global Govt Bond ETF (IGLH) TCO 0.25%
- Xtrackers Global Government Bond ETF (XGSG) TCO 0.29%
All hedged back to Sterling.
Global inflation-linked bonds hedged to £
- Lyxor Core Global Inflation-Linked 1-10Y Bond ETF (GISG) TCO 0.22%
- iShares Global Inflation Linked Government Bond ETF (GILG) TCO 0.24%
- Sanlam Global Inflation Linked Bond Fund X (IE00B7VQTF30) TCO 0.26%
- L&G Global Inflation Linked Bond Index Fund I (GB00BBHXNN27) TCO 0.28%
- Xtrackers Global Inflation Linked Bond ETF (XGIG) TCO 0.28%
- Royal London Short Duration Global Index Linked Fund M (GB00BD050F05) TCO 0.31%
All are short and intermediate options, hedged back to Sterling. Royal London and Sanlam funds are active.
UK corporate bonds
- iShares UK Credit Bond Index Fund (IE00BD0NC474) TCO 0.1%
- iShares Corporate Bond Index Fund (GB00B84DSW83) TCO 0.14%
- Vanguard UK Investment Grade Bond Index Fund (IE00B1S74Q32) TCO 0.15%
- L&G Sterling Corporate Bond Index Fund I (GB00B4M01C47) TCO 0.15%
- Invesco GBP Corporate Bond ETF (IGCB) TCO 0.15%
- Invesco GBP Corporate Bond ESG ETF (IBGE) TCO 0.15%
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,
Note: Some comments below may refer to an older collection of low-cost index trackers. Scroll down for the latest thoughts.