Moneywise's First 50 Funds - 20 cheap tracker funds to use as core holdings

14 July 2016
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See our First 50 Funds for beginners homepage for links to the other funds in the list.

INSTANT PORTFOLIOS

Vanguard LifeStrategy 20% Equity Inc or Acc
This low-risk fund provides some upside potential from investing while limiting the risk of losing your money. It has 20% exposure to globally diversified equities with the remainder in globally diversified government and corporate bonds. The underlying portfolios are wholly made up of Vanguard index tracker funds. For a bit more risk, use the 40% equity version.
OCF: 0.22%
ISIN – Inc: GB00B4620290
Acc: GB00B4NXY349

Vanguard LifeStrategy 60% Equity Fund Inc or Acc
This instant, medium-risk portfolio has 60% exposure to globally diversified shares with the rest in globally diversified government and corporate bonds.
OCF: 0.22%
ISIN – Inc: GB00B4R2F348
Acc: GB00B3TYHH97

Vanguard LifeStrategy 100% Equity Fund Inc or Acc
This one-stop fund is aimed at higher-risk investors, who don’t want to think about how to put a portfolio together. The main stock market exposure is to US company shares, followed by UK shares. To reduce risk, go for the 80% version.
OCF: 0.22%
ISIN – Inc: GB00B545NX97
Acc: GB00B41XG308

UK SHARES

iShares 100 UK Equity Fund D Acc
By tracking performance of the FTSE 100 Index of the biggest companies traded on the London Stock Exchange, it seeks to achieve capital growth. Dividends are paid quarterly.
OCF: 0.07%
ISIN – GB00B7W4GQ69

L&G UK Index Trust C Dist or I Acc
It aims to provide growth by replicating performance of the FTSE All Share Index. This index represents 98% of companies traded on the London Stock Exchange. The fund will invest almost entirely in company shares but may use derivatives (contracts which have a value linked to the price of another asset) to help with efficient day-to-day management or to reduce some of the risks of the market.
OCF: 0.1%
ISIN – C Dist: GB00BG0QPH16
Acc: GB00B0CNGN12

Vanguard FTSE 250 UCITS ETF
This Exchange Traded Fund aims to provide long-term capital growth by matching the return of the FTSE 250 index, which represents medium-sized companies on the London Stock Exchange.
OCF: 0.1%
ISIN – IE00BKX55Q28

Vanguard FTSE UK Equity Income Index Inc or Acc
Offering low-cost, diversified access to higher income UK shares, it tracks performance of the FTSE UK Equity Income Index, made up of the highest dividend-paying shares among the largest 350 companies on the London Stock Exchange.
OCF: 0.22%
ISIN – Inc: GB00B5B74684
Acc: GB00B59G4H82

OVERSEAS SHARES

Fidelity Index World Fund P Inc or Acc
A good fund to start a portfolio with, it tracks performance of the MSCI World Net Return Index of large- and medium-sized companies from more than 12 developed countries, including the UK.
OCF: 0.12%
ISIN – Inc: GB00BP8RYB62
Acc: GB00BJS8SJ34

L&G International Index Trust I Inc or Acc
Tracking performance of the FTSE World (ex UK) Index, which has a broad spread of company shares from developed and emerging markets globally (excluding UK companies). Note that it includes emerging markets countries, so it might be a bit riskier than the Fidelity Fund.
OCF: 0.13%
ISIN – Inc: GB00B2Q6HX78
Acc: GB00B2Q6HW61

Vanguard FTSE Developed Europe ex-UK Equity Index Inc or Acc
Good for instant exposure to developed countries in Europe, excluding the UK. Its main exposure is to French, German and Swiss companies.
OCF: 0.12%
ISIN – Inc: GB00B5B74N55
Acc: GB00B5B71H80

HIGHER-RISK OVERSEAS SHARES

Vanguard Global Small Cap Index Fund Inc or Acc
It tracks performance of the MSCI World Small Cap Index of smaller companies in developed countries.
OCF: 0.38%
ISIN – Inc: IE00B3X1LS57
Acc: IE00B3X1NT0
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Fidelity Index Emerging Markets P Inc or Acc
It aims to achieve long-term capital growth by closely matching performance of the MSCI Emerging Markets Index of rapidly developing economies.
OCF: 0.2%
ISIN – Inc: GB00BP8RYT47
Acc: GB00BHZK8D21

US SHARES

HSBC American Index C Inc or Acc
Seeking long-term capital growth, it matches the return of the S&P 500 Index of 500 large companies listed on the New York Stock Exchange or NASDAQ (another American stock exchange).
OCF: 0.06%
ISIN – Inc: GB00B80QG490
Acc: GB00B80QG615

Vanguard US Equity Index Fund Inc or Acc
This is a very cheap one-stop solution for access to the whole US equity market. This tracks performance of the S&P Total Market index, which has nearly 3,800 constituents. It holds smaller companies as well as large and medium-sized companies.
OCF: 0.1%
ISIN – Inc: GB00B5B74S01
Acc: GB00B5B71Q71

JAPAN SHARES

HSBC Japan Index Fund Inc or Acc
This seeks to track the FTSE Japan index by investing in all 494 large and medium-sized companies in the index.
OCF: 0.21%
ISIN – Inc: GB00B80QGM70
Acc: GB00B80QGN87

BONDS

Vanguard Uk Government Bond Index Inc or Acc
This fund can be used to achieve lower-risk diversity from an equity portfolio. It seeks to provide returns consistent with the performance of a market-weighted bond index of UK government fixed-income securities denominated in Pound Sterling.
OCF 0.15%
ISIN – Inc: IE00B1S75820
Acc: IE00B1S75374

Legal & General Short Dated Sterling Corporate Bond Index I Inc or Acc
Holds Sterling-denominated bonds from around the world but mainly from the UK. It consists mainly large, corporate investment-grade bond issues with maturities of between one and five years (the safer end of the maturity spectrum because interest rate changes will have less of an effect on the outcome to the investor).
OCF: 0.14%
ISIN – Inc: GB00BKGR3G14
Acc: GB00BKGR3H21

iShares Overseas Corporate Bond Tracker Fund D Inc or Acc
This fund gives you exposure to corporate bonds worldwide and sits nicely alongside the L&G Short Dated Sterling Corporate Bond fund. It provides exposure to the global market of investment-grade corporate bonds excluding those issued in pounds.
OCF: 0.16%
ISIN – Inc: GB00BNB74B95
Acc: GB00B58YKH53

Vanguard Global Bond Index GBP Hedged Inc or Acc
This highly diversified fund gives exposure to more than 7,300 bonds with the US, Japan, Canada, France and Germany being the highest weighted countries. Investors can use it as a ‘one-stop shop’ for developed market investment-grade-rated fixed-income exposure. The fund is currency hedged into Sterling, which takes out the currency volatility for UK investors, which we think is a good feature for a beginner.
OCF: 0.15%
ISIN – Inc: IE00B2RHVP93
Acc: IE00B50W2R13

GOLD

iShares Physical Gold ETC (SGLN)
Gold tends to make a good diversifier in a portfolio as it behaves differently to other asset classes and tends to rally while other assets are falling. This fund is an exchange traded commodity (ETC) rather than a traditional index tracker fund. However, it is traded on the London Stock Exchange and you can buy it through most investment platforms.

Think of it like buying gold bars without the hassle of having to store your gold. The fund provides investors with the performance of the daily spot price of gold and physically invests in the metal in the same proportion of the value of the ETC. It doesn’t provide an income.
OCF: 0.25%
ISIN – IE00B4ND3602

HOW DO I PUT THESE TRACKER FUNDS TOGETHER?