Index Fund
A fund that tracks a market index at minimal cost, instead of trying to beat it.
Index funds mechanically replicate an index such as the FTSE 100, FTSE All-Share, S&P 500, or MSCI World. UK options include the Vanguard FTSE Global All Cap Index Fund, Fidelity Index World, and HSBC FTSE All-World Index. OCFs typically range from 0.10% to 0.25%, a fraction of active fund costs. Decades of SPIVA data show that the majority of active UK equity funds underperform their benchmark over 10-year periods after fees. An index fund inside a stocks and shares ISA or SIPP is the default sensible core for most UK investors.
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