The calculation of the SRRI is based on how the share price has moved over the previous five years – known as the volatility of the share price. Details are provided in the literature below.Įach fund has a Synthetic Risk and Reward Indicator (SRRI) which is shown in the KIID. It’s important to understand the specific risks associated with a fund, in order to determine whether it’s appropriate for your needs and circumstances. The risks and growth potential are relatively lower for some funds, and relatively higher for other funds. They don’t have any guarantees and will fluctuate in capital value. Please also refer to the frequently asked questions.Įach of our investment funds carry a risk of loss to capital value but have the potential for capital growth and/or income over the medium to long-term. You can find the relevant fund and product information below. If you require help, please speak to our Scottish Widows customer services team on 03 (Monday–Friday 9am–5pm). This product is only available for top-ups to existing plans. The UK Tracker Fund ISA is no longer open to new investors. Robo-advisors will automatically rebalance your portfolio based on market conditions and have much lower fees than traditional financial advisors.SCOTTISH WIDOWS UK TRACKER FUND ISA – INVESTMENT DOCUMENTATION Once your account is open and funded, you can choose from a number of different index funds, like an S&P 500 fund, a fund that tracks government bonds or a fund that tracks international stocks.Īlso, consider using a robo-advisor like Wealthfront and Betterment (which Select rated highly on our list of the best robo-advisors), which will invest in a handful of index funds and ETFs based on your risk tolerance and investment timeline. To invest in an index fund, you'll need to open a brokerage account, a traditional IRA or a Roth IRA (you can often choose to invest in index funds through your employer's 401(k) too). Large Cap Index tracks large capitalization stocks, which the website says, "are considered to be stocks of the largest 500 U.S. Though the fund doesn't technically track the S&P 500, the Fidelity U.S. Passive, or index funds, generally have a 0.2% expense ratio, so this is notably low.įor an option with no expense ratio, consider the Fidelity ZERO Large Cap Index (FNILX). Its expense ratio is 0.02%, meaning every $10,000 invested costs $2 annually. For example, Charles Schwab's S&P 500 Index Fund (SWPPX) is a straightforward option with no investment minimum. Some of the top index funds are those that track the S&P 500 and have low costs. Get started index investing with a brokerage account The money saved in fees by investing in an index fund over a mutual fund can save you lots of money in the long term and in turn help you make more money.Ī common strategy for many investors who have a long investment timeline is to regularly invest money into an S&P 500 index fund (known as dollar-cost averaging) and watch their money grow over time. Since index funds don't require daily human management, they have lower management costs (called "expense ratios") than mutual funds. The goal with mutual funds is to beat the market, while the goal with index funds is simply to match the market's performance. Mutual funds are actively managed by fund managers who choose your investments. This is why index funds are known as passive investing - and it's what sets them apart from mutual funds. Index investors don't need to actively manage the stocks and bonds investment as closely since the fund is just copying a particular index. Index investing is a form of passive investing
(Just remember that future returns are not guaranteed.) Though the S&P 500 certainly fluctuates, it has historically generated nearly a 10% average annual return over time for investors. Market indexes tend to have a good track record, too. Investing in an S&P 500 fund (one of the most popular) means your investments are tied to the performance of a wide range of companies.īecause the goal of index funds is to mirror the same holdings of whatever index they track, they are naturally diversified and thus hold a lower risk than individual stock holdings.
The S&P 500 is one of the major indexes that tracks the performance of the 500 largest companies in the U.S. When you put money in an index fund, that cash is then used to invest in all the companies that make up the particular index, which gives you a more diverse portfolio than if you were buying individual stocks. Index funds are investment funds that follow a benchmark index, such as the S&P 500 or the Nasdaq 100.