What is a technology tracker fund ISA?
A technology tracker ISA is a Stocks and Shares ISA that holds technology tracker funds.
What is a Stocks and Shares ISA?
A Stocks and Shares ISA is an investment or savings account that is completely free from taxes.
ISA accounts are sheltered from:
- Income tax on interest and dividends from investments
- Capital Gains Tax (CGT) on the growth of your investments
HMRC allows all individuals to invest up to £20,000 into ISA accounts each tax year.
What is a technology tracker fund?
A technology tracker fund is an investment fund that aims to track the collective performance of companies that operate in the Information Technology sector.
A technology tracker fund typically pools investors' money together and then invests proportionately in global technology companies; however, some may target specific geographical areas in particular such as the US or Europe.
They will usually hold shares in a large number of technology companies in order to diversify the risk of the tracker fund and spread the weighting, but as they are tracker funds, they are not actively managed by fund managers like managed funds are.
This means that they will not pick certain companies over others if they think they will perform well, or sell shares if they think they will perform poorly. They simply aim to mirror the performance of the technology index in general.
How do I compare technology tracker fund ISAs?
You firstly need to decide what ISA provider you want to open your Stocks and Shares ISA with.
To invest in a technology tracker fund ISA, you’ll need a self-select or DIY ISA in which you can choose your own funds and shares to invest in, as opposed to a managed portfolio.
Stocks and Shares ISA platforms are set up to facilitate these types of investments, and you can compare ISA providers based on:
- The annual management fee for holding funds and shares
- Dealing fees and other ad hoc fees your ISA provider may charge
- Whether they have a highly rated ISA app or online platform
- How good their customer service reviews are
Once you’ve chosen an ISA provider, you can then hand pick any technology tracker funds you want to invest in, such as the Legal & General Global Technology Index Fund, for example.
How do I open a technology tracker fund ISA?
You can open a Stocks and Shares platform ISA online, and the process can be completed in a matter of minutes.
You’ll need your basic personal information, and a debit card to make a contribution to your new ISA of up to £20,000.
Alternatively, you can also open an account over the telephone or with a postal application should you prefer this method.
Once you have created your account and added funds, you can navigate to the technology tracker fund(s) you wish to purchase via the online portal or speak to the customer service or dealing team to purchase units in the fund(s).