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Aug 2020

Best low cost stocks and shares ISAs: Our Top Picks

Best low cost stocks and shares ISAs: Our Top Picks

Are you wanting to open a low-cost stocks and shares ISA? You’re not alone, and with so much out there to choose from, it can be a bit overwhelming to get a view of the lowest cost options. So, we’ve put together our top 3 picks for FTSE 100 low-cost Stocks and Shares ISAs. 

What’s a FTSE 100 Tracker Fund?

For the sake of this blog we’ve focused on FTSE 100 tracker funds. These are investments which mirror the performance of a market index – they can also be referred to as ETFs, which stands for exchange traded funds.

As a passive investment, these aim to replicate the movement of an index, and then deliver returns which closely align to the index which is being tracked.

You can choose either:

  • Full replication: buying physical shares of the 100 companies which form the FTSE 100
  • Partial replication: use of a more complex investment technique to replicate the movement in the index.

In tracker fund which tracks the FTSE 100 companies, any returns you get will reflect the successes of the top 100 UK companies within the Index.

Our Top Picks

1. iShares 100 UK Equity Index

  • With a 0.06% charge per annum, this is a super low-cost FTSE 100 tracker fund.
  • You can invest from £25 per month or a £100 single lump sum, and with a yearly income yield of 5.09% which is paid bi-annually*.
  • This fund works by intently tracking the performance of the FTSE 100 index, via investment in the index’s companies. Any income generated from this is then reinvested, creating compound interest.

2. Legal & General UK 100 Index Trust

  • With a 0.06% charge per annum, this is also a very low-cost FTSE tracker fund; this rate is after a 0.04% discount if you invest via Hargreaves Lansdown.
  • For this fund, you can invest from £25 per month, or a £100 single lump sum – with a yearly income yield of 4.70% income which is then paid quarterly.
  • This fund works by tracking the FTSE 100 index of the biggest companies in the British stock market. While these are specifically British companies, lots of these companies have an international presence which gives investors exposure to the global economy. Any income generated is reinvested, which means that this fund also creates compound interest.


  • With a 0.07% charge per annum, the HSBC ETF PLC FTSE100 fund is another good low-cost option for those looking to invest in FTSE 100 companies.
  • For this fund, much like the other two, you can invest from £25 per month or with a £100 single lump sum. This fund offers a yearly yield of 5.83% which is paid bi-annually.
  • This funds works by replicating the performance of the FTSE 100 Index, whilst ensuring the margin for error is minimised between the Index and the performance of the fund. Any income generated is reinvested, and then this creates compound interest (like the other two funds in our picks).

*regarding the rates for the yearly yields on these funds, these were correct as of 30/06/2020.

Read more about ETF ISAs

Read more about Index Tracker ISAs.

Selected ISAs

Core FTSE 100 ETF Tracker Fund

from iShares

ISA Option
Allows ISA Transfers
Regular Savings
  • Fund Choice: Tracks the FTSE 100 Index
  • Invest From: £25 pm
  • Investment Options: Provides exposure to the FTSE 100 index of the largest companies listed on the London Stock Exchange at a highly competitive price.

A super low cost FTSE 100 tracker ETF fund with a 0.07% pa annual charge. The product has a record of tracking its benchmark to a high degree of accuracy and scored ahead of rivals on this measure.

This fund is available via: Interactive Investor platform »

Important: The value of investments can go down as well as up so you may get back less than you invested. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.

FTSE 250 Index Tracker

from HSBC

ISA Option
Allows ISA Transfers
Regular Savings
  • Fund Choice: Tracks FTSE 250 Index
  • Invest From: £25 pm
  • Investment Options: The Fund's investment objective is to provide long term capital growth by matching the capital performance of the FTSE 250 Index by investing in companies that make up the index.

A low cost FTSE 250 tracker with a 0.18% pa annual charge.The FTSE 250 is full of medium-sized companies with exciting growth potential. We think this is an excellent tracker fund, offering a low cost way to invest in this area of the market. HSBC has lots of experience running tracker investment funds.

This fund is available via:  Interactive Investor investment platform »

Important information: Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

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Stocks and Shares ISAs

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