How Do I Invest In A FTSE Tracker
Posted on Tuesday, 5th May 2020
- An index tracker fund investment can be a great way of investing at low cost where you are not paying for expensive fund management fees.In weighing up the best way to invest in the FTSE there are a number of options open to you.
What are my options when getting a FTSE tracker fund or FTSE exchange traded fund
1. FTSE Tracker Funds
Typically you can buy tracker funds:
- via a fund management company - e.g. Legal and General offer a range of their own low cost tracker funds including a FTSE 100 tracker and a FTSE All Share Tracker
- via an agent with ties to the fund manager
- through a fund supermarket - e.g. Fund supermarkets require you to set up an account through which you can buy and sell funds or shares. You can buy FTSE tracker funds via a platform. Options include Interactive Investor, Fidelity, Hargreaves Lansdown, and AJ Bell. As part of setting up an account there will be an ongoing charge levied by the platform provider.
- through an online share dealing service or stockbroker - e.g. Interactive Investor
- through an independent financial adviser or financial planner.
2. FTSE ETF Tracker
You can also buy exchange traded funds (ETFs) in the same way you would buy regular company shares on the stock exchange.
An ETF can be a low cost way of tracking the FTSE 100. The annual cost of a FTSE 100 ETF can be less than 0.1% pa which over the long term can make a difference.
In order to buy an ETF FTSE 100 Tracker you will first need to set up a trading account. This can be done typically via a trading platform provider.
Examples of FTSE ETF Trackers include:
- Fidelity - Offer a range of low cost FTSE ETF Trackers including iShares FTSE 100 UCITS ETF Tracker with a super low annual management charge of 0.07% pa. If you prefer medium company exposure then the Vanguard FTSE 250 UCITS ETF Tracker provides a greater UK domestic focus. Alternatively if you are looking for global exposure Vanguard's FTSE All-World UCITS ETF Tracker provides low cost exposure to developed and emerging markets.
- Hargreaves Lansdown - You can access Vanguard Funds plc FTSE 100 UCITS ETF and Vanguard Funds plc FTSE 250 UCITS ETF
As with buying shares there will be a trading cost when you first buy
If you’re not sure what kind of investment fits your needs, it’s a good idea to talk to an Independent Financial Adviser (IFA).