Passive or index tracking Funds aim to replicate the return of a market index, less fees, by investing in its underlying securities. The two distinct types of passives are:
Passive Funds won’t do much more than track the chosen index. Over the long term the average performance of Active Funds has tended to be better in most markets.
If an index is dominated by a particular sector and it does badly, your investment suffers. This happened during the banking crisis in 2008, when the FTSE 100 was dominated by banks.
Index Funds are useful for a simple replication of major indices whereas ETFs offer many more specialised options. Index Funds are priced once a day while ETFs are traded on the stock market, so there is immediate pricing during trading hours.
Passives may be worth considering if you want to get some general exposure to a market quickly and have not got time to research all the Active Funds available. Some investors opt for a combination of Funds – a Passive core complemented with selected Active Funds to try and spice up performance.
Willis Owen offers a wide range of Index Funds. We also provide popular ETFs which can be investigated through our : explore research facility. ETFs are traded like Shares and are charged at our usual online rates, which start from just £7.50 per deal.
To assist you, below is a shortlist of Funds for your consideration that is carefully selected by our in house research team. They work closely with Morningstar's data to filter down the Fund selection into a focused list of high quality Funds for our investors.
When selecting a Passive Fund make sure you understand the Fund’s mandate and that it matches your own objectives.
|Fund Name||IA Sector||FMC||Morningstar
(rel to category)
|HSBC Japan Index C Acc||Japan||0.2300||Average||Buy|
|iShares Pacific ex Japan Equity Index (UK) D Acc||Asia Pacific Excluding Japan||0.3068||Below average||Buy|
|L&G International Index Trust I Acc||Global||0.1234||Average||Buy|
|Vanguard FTSE U.K. All Share Index A Acc GBP||UK All Companies||0.2284||Average||Buy|