What are index funds uk
Unlike a more traditional management fund, whereby fund managers will independently select investment products on your behalf, an index fund instead tracks the performance of a particular market. Once such example of this is the S&P 500, which is an index that tracks the rise and fall of the top 500 U.S. stocks by market capitalization. footnote 3 For the 10-year period ended December 31, 2018, 9 of 16 Vanguard bond index funds, 14 of 17 Vanguard balanced index funds, and 94 of 106 Vanguard stock index funds—for a total of 117 of 139 Vanguard index funds—outperformed their Lipper peer-group averages. Results will vary for other time periods. Many investors prefer "tracker" funds that replicate the whole index of stocks rather than paying a premium price for an "active" fund run by a professional investor, where there are no guarantees of superior returns. Trackers allow you to invest for a lower cost, although not all tracker funds are cheap.