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Does it matter which Index Tracker you buy?
Tom Bards
Posted: 12 February 2018 17:07:53(UTC)
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Hi all,


Thinking of buying a US index tracker and I'm just wondering if it actually matters which one you get? They are all relatively the same cost.

The only thing I can think to distinguish them is to look back at the last 5 years and find the down years and see which index tracker lost the least. From what I can see (using HL info) the Fidelity US tracker did better than the rest by a few percent the last time where all index trackers ended the year in negatives. I'm therefore thinking of going with that one.

Is there anything else to consider when deciding about Index Trackers?

Sara G
Posted: 12 February 2018 17:28:02(UTC)
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The difference between Trackers is largely due to fees and tracking error. It can be a mistake to go for the best performer if that outperformance has been caused by them not tracking the index closely enough, because they can end up underperforming the index by more than the costs of the fund. Legal & General have a good reputation and low tracking error, and the fee is reduced with HL.

In the case of US Trackers, there may also be differences according to which index they are tracking, so it may be worth comparing them over a 5-10 year period if this is the case.
3 users thanked Sara G for this post.
Tim D on 12/02/2018(UTC), Mr Helpful on 12/02/2018(UTC), c brown on 13/02/2018(UTC)
Aminatidi
Posted: 12 February 2018 17:43:28(UTC)
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The only comment I'd make it do you know you just want a US only tracker?

Only ask as I've seen a few threads where people have read books and assumed they need a S&P type US tracker if they want to go the passive route vs. a global tracker.
John Miskelly
Posted: 12 February 2018 21:14:36(UTC)
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I've got the Vanguard US Equity Index, it's a total market tracker. I don't think the Vanguard S&P500 is available with my broker HL.
Mr Helpful
Posted: 13 February 2018 09:27:17(UTC)
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John Miskelly;57053 wrote:

I don't think the Vanguard S&P500 is available with my broker HL.


See 'VUSA'.
1 user thanked Mr Helpful for this post.
Guest on 18/02/2018(UTC)
Law Man
Posted: 18 February 2018 11:13:54(UTC)
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Two extra points:

(1) if you are with HL, it charges 0.45% p.a. For holding an OEIC fund, but not for an ETF (once you hold above certain amounts of non- Funds: £44,444 in a SIPP, £10,000 in an ISA).

(2) I suggest you choose 'physical' rather than 'synthetic'. The latter carries the risk of default by the counterparts.
Stephen B.
Posted: 18 February 2018 15:31:00(UTC)
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Look at the total market cap of the tracker - generally bigger is probably better, although maybe not if it gets really big.
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