Index fund ideas from our Select 50

Index funds, also known as tracker funds or passive funds can be a great addition to a portfolio. As they are passively managed, meaning they track the ups and downs of an index without trying to outperform it, they come at a fraction of the cost.

So, if you’re an investor looking for a low-cost, ‘one-stop-shop’ option, and want your money well-diversified across lots of different companies and regions - index funds are worth considering.

Depending on the fund, they can focus on one index in a specific country - for example, a fund may track the FTSE 100 which is comprised of the top 100 largest companies in the UK - or they may well combine multiple indexes across the world.

They are typically held in a Stocks and Shares ISA, Self-invested Personal Pension (SIPP) or an investment account.

There are 14 index-tracking funds on our Select 50 covering a wide variety of regions and asset classes.

Here’s a closer look at four index funds from this list that focus on the UK, US and global stock markets.

1. iShares Core FTSE 100 

This fund tracks the FTSE 100 Index which is made up of the 100 largest companies by value listed in London. 

Its primary holdings include mega corporations like Shell, AstraZeneca, HSBC, Unilever and BP. These companies are based in the UK but also operate internationally. This characteristic means the fund has more of an international focus than you might think and is less dependent on what’s going on in the UK economy.  

The fund is a really cheap way to access the FTSE 100 - with a 0.10% ongoing charge. 

2. Vanguard FTSE 250 ETF 

This fund tracks the FTSE 250 index and focuses on smaller to medium sized UK companies providing you exposure to the domestic UK economy - more so than the FTSE 100 tracker which includes more multinational companies.

Its current primary holdings include investment trust, Alliance Witan, financial advisory firm, St James’s Place and board game company, Games Workshop.

If you’re looking to add more UK exposure to your portfolio at a low cost, this fund is good value with an ongoing charge of 0.10%. 

3. Vanguard S&P 500 ETF

This fund provides a cheap and easy way to invest in the US stock market by tracking the popular S&P 500 Index. It will provide you access to the world’s largest technology companies including Apple, NVIDIA, Microsoft, Amazon and Facebook-owner Meta.

The fund has a 0.07% ongoing charge - so it’s a great low-cost way to gain exposure to the world’s largest stock market.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. This information is not a personal recommendation for any particular investment. There is a risk that the issuers of bonds may not be able to repay the money they have borrowed or make interest payments. When interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.