Tracker funds don’t let you choose what goes into them, so you can’t personalise your investments.Tracker funds have underlying fees that you’ll need to assess on a fund-by-fund basis.Tracker funds won’t grant you direct ownership of any shares or other assets.There are some disadvantages of tracker funds that you should be aware of before you invest: Tracker funds usually offer broad exposure to the financial markets for lower upfront costs than buying each asset individually.Bear in mind that some tracker funds are more diversified than others – for example, an all-world tracker is more diverse than a technology tracker. So, if one of these company’s stock falls in value, it’s unlikely to have a large effect on the performance of the fund as a whole. Tracker funds offer you diversified exposure to the financial markets because their value is determined by the share price of a collection of different companies.You don’t need to worry about choosing which assets go into the fund and you don’t need a high level of financial knowledge, because the fund provider will take care of that for you. Tracker funds are ‘passive investments’, meaning that you only need to buy shares in the fund itself.Here are some of the benefits of tracker funds and how they can help you achieve your investment goals: The fund invests in a range of sectors including technology and retail, and includes companies like Samsung, Alibaba and Tencent. Fund: track companies in emerging markets like Asia, Latin America and Africa which have been selected based on long-term growth. Fidelity Index Emerging Markets An emerging market is a national economy of a developing country – or sometimes a lesser-known sector – that is beginning to engage more prominently with global markets and which investors are beginning to take more interest in.Legal & General Global Health & Pharmaceuticals Index: gain exposure to the global healthcare sector by tracking the performance of healthcare, pharmaceutical and biotechnology companies that are included in the FTSE World Index like Johnson & Johnson and Pfizer.You’ll track the performance of companies in the FTSE World Index which are leading the way in information technology – like Apple, Microsoft, and Google. Legal & General Global Technology Index: this fund follows the companies who are pioneering some of the world’s biggest digital trends.Index Fund : this fund tracks the MSCI World ESG Leaders Index and it invests in global companies with the highest environmental, social and governance (ESG) performance rating against their competitors. Old Mutual MSCI World ESG Shorthand for environmental, social, governance – which is a set of socially responsible principles that businesses and investors are beginning to pay more attention to.Fidelity Index World Fund : this fund closely follows the performance of the MSCI World Index, and you’ll get wide exposure to around 1,600 global companies including Amazon, Toyota and Netflix.Here are some examples of the tracker funds we offer at Moneybox : When you invest with Moneybox, you’ll always be investing in tracker funds ( excluding our Legal & General Cash Trust and the Moneybox Pension BlackRock LifePath funds). So, if you invested in a Nasdaq 100 tracker fund, you’ll be able to get exposure to the US tech sector without having to buy individual shares in dozens of different companies – which can help to bring down your upfront costs. Remember, we went through index weightings in Lesson 2, and they determine how indices are calculated. It does this by purchasing shares in the companies that are included in the index relative to their index weighting. They can track a range of different areas, from an individual sector to an entire stock market index.įor example, a Nasdaq 100 tracker fund will mirror the price movements of the companies in the Nasdaq 100 index. They can track a range of different areas, from an individual sector to an entire stock market index.?Ī tracker fund is an investment fund that mirrors the price performance of an asset or group of different assets. What is a tracker fund A tracker fund is an investment fund that mirrors the price performance of an asset or group of different assets. Tracker funds, index funds, passive funds… They all mean the same thing – but what exactly are they? In this lesson, we’ll take you through how tracker funds work and how they could benefit your investment strategy.