Low-cost index funds & ETFs (UK)
An index fund (or ETF) holds hundreds or thousands of companies at once, so a single purchase spreads your money widely. Because it simply tracks an index rather than paying a manager to pick stocks, its ongoing charge - the annual fee - is usually tiny.
That fee still compounds. Over decades, the gap between a 0.07% and a 0.65% charge can quietly add up to a meaningful sum, which is why the fee is worth understanding before anything else. Each fund below shows its own published charge.
Below the list you'll find what an ongoing charge actually is and where to find it, what the fee range genuinely looks like across the funds here, and the costs that sit outside it - because "low cost" describes one number on a factsheet, not the whole bill.
Why should I care?
For most beginners a single low-cost index fund does more good than any amount of stock-picking - and the tiny-looking annual fee is the one number that quietly decides how much of your money you keep over decades.
How this list is put together
Every fund in the Almanac whose published ongoing charge is 0.25% a year or less, listed A to Z. A fund just above that line is not worse than one just below it - the cut-off is a round number, not a verdict.
Ongoing charge (OCF) across all 57 of them
57 names · each links to its full, plain-English explainer.
What is an ongoing charge, and where do I find it?
The ongoing charge figure - OCF, sometimes still called the TER - is the annual cost of running the fund, taken out of the fund itself rather than billed to you. You never see it leave your account: it is already reflected in the price, which is exactly why it is easy to ignore.
It appears on the fund's factsheet and on its Key Investor Information Document, and every platform shows it on the fund's page. A charge of 0.15% means £1.50 a year for every £1,000 you hold - so on £10,000 that is £15 a year, taken a fraction at a time rather than as a bill.
What does the range actually look like?
Across the 75 funds in the Almanac the published charges run from 0.03% at the cheapest to 0.65% at the dearest, with a median of 0.15%. Fifty-seven of them are at or under the 0.25% line used for the list above.
On a £10,000 holding those extremes are about £3 a year and £65 a year. That gap sounds small in isolation, which is the point: it is the sort of number people wave away, and it is charged every year on the whole balance whether the fund goes up or down.
The broad, plain trackers tend to sit at the cheap end and the narrow or specialist ones at the dear end - a fund tracking a single theme costs more to run than one holding the whole market. Neither figure tells you whether the fund suits you; it tells you what it costs.
The full breakdown - how the charges cluster, and what the same index costs through different funds - is set out in what UK tracker funds actually charge.
What does the fee actually cost over time?
Take £10,000 growing at 6% a year before charges. At 0.07% it reaches about £31,650 after 20 years; at 0.75%, about £27,825 - a difference of roughly £3,825 on the same money in the same market.
Stretch that to 30 years and the two become about £56,300 and £46,400, a gap near £9,900. The fee compounds against you in the same way the returns compound for you, which is why a decimal point on a factsheet turns into a real number given enough time.
Those figures assume a steady 6%, which no real market delivers - they are there to show the shape of the effect, not to forecast an outcome. The fee calculator runs the same arithmetic on your own numbers.
What does a low ongoing charge not cover?
The OCF is not the whole bill. Your platform charges its own fee on top, often a percentage of your holdings or a flat annual amount, and on a small pot that can easily exceed the fund charge itself.
There is also the spread - the gap between the buying and selling price - paid each time you deal, and for an ETF that gap can widen when markets are jumpy. Funds also miss their index slightly, a difference called tracking difference, which can be larger or smaller than the headline fee and is reported separately.
None of this makes a cheap fund expensive. It means the ongoing charge is one line of the cost, and the cheapest fund on a costly platform can still work out dearer than a slightly pricier fund on a cheap one.
Index fund or ETF - does it change the cost?
They are two wrappers around the same idea. An index fund is priced once a day and you deal at that single price; an ETF trades on an exchange through the day like a share, so it has a live price and a spread.
Charges overlap heavily and neither form is reliably cheaper. What differs is the dealing: platforms often charge per ETF trade but let you buy funds free or on a cheap regular-investment plan, so for small monthly amounts the platform's pricing usually matters more than the fund's own charge.
Questions about fund charges
What counts as a low-cost index fund in the UK?
There is no official definition. Broad index trackers commonly charge somewhere between about 0.05% and 0.25% a year, and the list on this page uses 0.25% as its cut-off - a round number chosen to draw a line, not a standard anyone sets. Across the 75 funds here the median charge is 0.15%.
Is a cheaper fund always the better one?
No, and the fee is only one of the things that differ. Two trackers at different charges may follow different indices, hold different numbers of companies, be domiciled in different countries or treat dividends differently - all of which change what you own. The charge tells you what it costs to run, not what it does.
Does the ongoing charge come out of my account?
No. It is taken from inside the fund, so the price you see already has it deducted. That is why it is easy to overlook: nothing ever appears on a statement saying you paid it.
Do ETFs cost less than index funds?
Not reliably - the charges overlap. The bigger difference is how you deal with them: ETFs trade on an exchange and often carry a per-trade fee plus a spread, while index funds price once a day and are frequently free to deal or included in a cheap regular-investment plan. On small monthly amounts the platform's pricing tends to matter more than the fund's.
What is tracking difference, and is it worse than the fee?
Tracking difference is how far a fund's return lands from the index it follows over a period. It already includes the ongoing charge and everything else the fund experiences, so it can be larger or smaller than the headline fee. It is reported on the factsheet and is the closest single measure of what holding the fund actually cost.