Analysts Upgrade 4 Tracker Funds

LOW COST FUNDS: Morningstar passive fund analysts have upgraded four tracker funds with positive past performance and commitment to low annual fees

Jose Garcia Zarate 28 January, 2015 | 12:30PM
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Morningstar analysts have upgraded the rating on four passive funds: the L&G All Stocks Index Linked Gilt Index fund, the Vanguard UK Government Bond Index fund, the Vanguard Global Bond Index GBP Hedged fund, and the BlackRock UK Gilts All Stocks Tracker fund.

L&G All Stocks Index Linked Gilt Index

The L&G All Stocks Index Linked Gilt Index fund has been upgraded to Silver. The fund previously held a rating of Bronze. L&G has proactively cut fees on this fund since the inception of RDR. As of this review, the fund‘s fees are at the low end of the cost spectrum for this particular exposure.

The opportunity set available for active managers to add value over the benchmark seems somewhat limited. Investors must consider that the fund’s high duration is an intrinsic feature of the UK linker market and this may cause volatility. Overall, however, Morningstar sees this is a good tracker that is in a position to deliver above-average returns on a medium- to long-term basis. Besides, Morningstar values the efforts undertaken by L&G to become a highly cost-competitive provider of passive funds.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
iShares UK Gilts All Stks Idx (UK) D Acc178.00 GBP-0.06Rating
Vanguard Glb Bd Idx £ H Acc162.48 GBP0.12Rating
Vanguard UK Govt Bd Idx £ Acc177.64 GBP0.85Rating

About Author

Jose Garcia Zarate

Jose Garcia Zarate  is Associate Director of Passive Strategies Research for Morningstar Europe