Share this page:
Stay connected:
Welcome to the Citywire Money Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!

Notification

Icon
Error

Index tracker funds
Steve123
Posted: 28 September 2010 22:49:07(UTC)
#1

Joined: 25/09/2010(UTC)
Posts: 92

Thanks: 10 times
Was thanked: 8 time(s) in 6 post(s)
As few questions on index tracker funds, as a relative newcomer to investing:

Does anyone know where I can find a searchable table of tracker funds only, such that I can look at (for example) FTSE 100 trackers and other types of trackers. At the moment I can only find tables which include them with other types of funds, and rather than a table of tracker funds only.

Also, the fundsupermarket I use offers some tracker funds but charges its own additional fee for these: "Additional annual charge of 0.5% + VAT is applied to this fund when held in the [ ] ISA and SIPP (capped at £200 + VAT per account). This additional charge is not accounted for in the Total Expense Ratio." For example the Scottish Widows All Share Tracker Fund has an annual charge of 0.25% but the fund supermarket would add an additional 0.5% fee (capped at £200pa) to this. This does not seem right - the point of trackers is the low cost and replication of the index. Do all fund supermarkets add additional charges onto trackers funds? Do you know of any which do not, or how to get around these addtional charges?

My final question is what happens to the dividends paid by the shares being tracked? If the index tracker fund tracks the capital price of the index (eg the FTSE 100), what happens to the dividends being paid in relation to the shares held in the tracker fund. If the index tracker fund only tracks the FTSE 100 shares prices, the investor is losing out on the dividends which if reinvested would help the overall performance of the investment. If so,would it be better to buy a range of dividend producing shares across a range of sectors within the FSTE 100, rather than buying an index tracker fund?
Nick L
Posted: 30 September 2010 12:40:09(UTC)
#2

Joined: 30/09/2010(UTC)
Posts: 1

Hi Steve, here are my thoughts:

"Does anyone know where I can find a searchable table of tracker funds only, such that I can look at (for example) FTSE 100 trackers and other types of trackers."

Sorry, can't help with this. ISTR that Trustnet used to have a separate category for indexed funds but they seem to have done away with that.

"Also, the fundsupermarket I use offers some tracker funds but charges its own additional fee for these"

No need to be so coy about which funds supermarket you're using - Hargreaves Lansdown, I presume?

"Do all fund supermarkets add additional charges onto trackers funds?"

No.

"Do you know of any which do not..."

You could try Interactive Investor.

"...or how to get around these addtional charges?"

Yes - if you're sticking with Hargreaves Lansdown, go for the HSBC tracker funds which don't attract the additional 0.5% + VAT.

"My final question is what happens to the dividends paid by the shares being tracked?"

One way or another, you will get the benefit of them. If you buy income units (AKA distribution units), the fund manager will collect the dividends on the underlying investments and distribute them to you as income annually or semi-annually. If you buy accumulation units, the dividends get reinvested, so their value will be reflected in the price of units. Try using HL's fund research tool to compare, say, the income and accumulation units for HSBC's FTSE 100 tracker and you will see how reinvesting the dividends affects the relative performance of the two. (Make sure you click "price" rather than "total return").

Don't forget that you can also index-track with exchange-traded funds (but again you will pay the extra 0.5% + VAT with HL).

Hope this helps

Nick
chris_w
Posted: 01 October 2010 10:46:02(UTC)
#3

Joined: 01/10/2010(UTC)
Posts: 1

The HSBC 100, 250, All share, Japan, Pacific and American trackers now charge 0.25% with no additional charge in HL. I think that makes a good deal - better than index ETFs which attract the 0.5% charge in HL SIPP.

Some other index trackers have much higher charges - why would anyone pay more for an identical product?

What bugs me about HL SIPP is no reduction (loyalty bonus) to the annual managed fund charges in SIPP.
Pauline_J
Posted: 01 October 2010 13:05:45(UTC)
#4

Joined: 06/10/2007(UTC)
Posts: 4

Have you visited the BestInvest site ? www.bestinvest.co.uk

They have a 'Fund Research' tool. First of all, from the home page, select 'Investment Research' from the main menu. Then select 'Fund Research' followed by 'Fund Search'. Having selected that option, you will get a page where you can refine your search in a number of different ways. Go straight to 'Advanced search' (without entering anything else). More selection options will then be displayed. Scroll down to the bottom of the page - to Portfolio Factors. Select the 'Investment theme' drop-down box and choose 'Index Tracker'. Click 'Search' and then you'll got a list of about 70 Tracker funds. You can manipulate this display in various ways including sorting by a variety of different criteria including charges.

I have bought a number of funds through them and I'm very satisfied with their service. Hope this is useful.
Steve123
Posted: 01 October 2010 13:44:48(UTC)
#5

Joined: 25/09/2010(UTC)
Posts: 92

Thanks: 10 times
Was thanked: 8 time(s) in 6 post(s)
Many thanks for the replies.
david rogers
Posted: 01 October 2010 14:09:20(UTC)
#6

Joined: 01/04/2010(UTC)
Posts: 28

Thanks: 2 times
Was thanked: 9 time(s) in 7 post(s)
Does anyone know a fund ot even better an investment trust which is substantially invested in Norwegian and Swedish equities and bonds (including state debt ? Grateful for any ideas
1 user thanked david rogers for this post.
Guest on 16/03/2013(UTC)
David Johnstone
Posted: 01 October 2010 15:04:17(UTC)
#7

Joined: 03/07/2009(UTC)
Posts: 28

Full replication or stratified sampling would be another issue worth considering?
+ Reply to discussion

Markets

Other markets