In the Index Tracker universe, we currently cover Exchange Traded Funds (ETFs) and Open Ended Funds. Within each fund type, we sub categorise into the following peer groups:
- UK Government Bonds
- UK Corporate Bonds Global
- Fixed Income ex-UK
- UK Equity Europe Ex-UK
- Equity North America
- Equity Developed
- Pacific Ex-Japan Equity
- Japan Equity
- Emerging Markets Equity
Within the ETF universe, we also cover Commodities and Global Property as discrete categories. The UK Government Bond ETFs have been combined with UK Index Linked Bond ETFs due to a low number of sector constituents.
Within the Open Ended funds universe, Commodity and Global Property funds have been combined with funds within the ‘Other’ category due to a low number of sector constituents in these.
In terms of how we assess these funds, we first and foremost consider their ability to track their respective index. To do this, we measure their correlation - also known as R-Squared - over the longest of 1, 3 or 5 year periods, dependent on the age of the fund.
We also consider a range of other criteria, including:
- Fund costs – based on standard terms
- Distribution partners (for open ended funds)
- Group and fund assets under management
- Counterparty risk (where applicable and for ETFs only)
- Ease of access