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Recommendation for FTSE tracker share?

Index tracking funds and ETFs
zico
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Recommendation for FTSE tracker share?

#154707

Postby zico » July 24th, 2018, 2:13 pm

I have about £16k in cash in one of my share portfolios which I want to invest in a FTSE tracker share, but there seem to be quite a few to choose from.
Does anyone have recommendations about which one to select, or because they are all trackers, does it not really matter?

JohnB
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Re: Recommendation for FTSE tracker share?

#154711

Postby JohnB » July 24th, 2018, 2:24 pm

Trackers are different because of their tracking error, how close they follow their index. The best way to follow the index like the FTSE 100 is to have a bit of everything, like Vanguard, but others will have a synthetic index, where they hold fewer shares, but try to be representative by clever picking. Often this does not work. Some trackers try to make money by loaning out your shares to other people short term, but again, this increases risk with little benefit to you. Of course some tracking error could be in your favour...

I have Vanguard, iShares, Fidelity trackers, and all seem comparable in approach and fees. You might find that your broker charges less for an ETF than a fund. Funds can have ACC units which are less bother than handing the dividends from an ETF.

Lootman
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Re: Recommendation for FTSE tracker share?

#154712

Postby Lootman » July 24th, 2018, 2:25 pm

The first decision is whether you want an ETF tracker or an open-ended tracker fund. Both do a similar job and that may depend on what other securities you hold. If shares and ITs, you might prefer an ETF. If funds, then you might prefer another fund.

Then which UK index - the FTSE-100, the FTSE-350 or the All-Share? The latter provides the broadest coverage.

Personally I don't think you can do better than Vanguard for cheap, efficient trackers.

zico
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Re: Recommendation for FTSE tracker share?

#154726

Postby zico » July 24th, 2018, 3:12 pm

Thanks for the advice and recommendations. I've just bought a Vanguard FTSE 100 ETF.


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