A Global Tracker Fund takes care of all your equity diversification needs in a single investment product.
In this post, we’ll explain how to choose the best global tracker fund for you. We’ll also list our top picks from the options offered.
What is a tracker fund?
A tracker fund is an investment fund that tracks an index such as the S&P 500 for the US or, in the case of a global tracker, an index such as the FTSE All World.
Your money is pooled with many other participants of the global tracker. This capital is invested by the fund’s management team in every major stock market on the planet.
As an investor in an index fund, you get a share of ownership in thousands of world-class firms. As a result, you buy into the possibilities of entire industries, countries and continents in one fell swoop.
The index followed by the global tracker fund is essentially an international league table of the world’s leading companies, ranging from Apple to Nvidia to Taiwanese semiconductor giant TSMC.
Global tracker fund stocks To replicate your chosen index as faithfully as possible. Meanwhile the index is driven by the fortunes of its constituent companies. Over the long term, company valuations rise and fall in line with their performance, investor sentiment and global capital’s best estimate of their future earnings.
Investing this way is known as index investing or passive investing. We believe this is the best strategy for most people to maximize their chances of meeting their financial goals.
Investment greats like Warren Buffet recommend index funds. Even some former hedge fund managers have switched sides and urge everyday investors to choose a global index tracker!
Global Tracker Fund – What Really Matters?
all world – Most products labeled World Index funds only cover developed world countries. They exclude emerging markets like China and India.
Such ‘world index trackers’ are less representative of the global economy. Instead look for ‘all-world’ or ‘global’ index funds that include emerging markets.
Alternatively, if you choose a developed world solution, you can add an emerging markets index fund to your portfolio to make up the difference.
Diversity – Following the above, compare how many stocks are included in your global tracker funds’ shortlist. The more the better, because then your index fund will do a better job of representing the global stock markets it follows.
Cost – This is the most important factor that will affect your returns And that you can control. There is often slight variation in performance between global index trackers. If in doubt, choose the cheapest based on ongoing charge figure (OCF)/total expense ratio (TER).
The reassuringly expensive price will not secure you a better global equity tracker fund. Go for cheap, vanilla flavor trackers. Don’t worry about bells and whistles.
Don’t worry about even small changes in cost. The OCF difference of 0.1% on £10,000 is only £10.
For example, if you have £50,000 in a fund with a 0.25% OCF you would spend:
£50,000 x 0.0025 = £125 annually.
Whereas a similar fund achieving an OCF of 0.15% will cost you £75 per year.
Of course, only you can know the extent of your personal discomfort. Try to figure out whether the impact of the costs over the lifetime of your investment is worth the change.
investor compensation – If your global index fund is based in the UK you get cover up to £85,000. ETFs are not included. Note, investor compensation schemes only kick in when the fund manager goes awry and your money goes missing. Stock market losses are not covered! (Your broker is also covered by the same FSCS scheme. ETFs and offshore index trackers are protected if the broker goes bust, as long as your platform is eligible for the scheme.
index – You should look at the tracker’s index to make sure it is truly global. If it isn’t, find out what’s missing. Also check your product’s factsheet.
Global Index Fund or Global ETF?
Disclosure: Links on the Platform may be affiliate links, where we may earn commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than you invested. Other fees may also apply with commission-free brokers. View terms and fees. Past performance does not guarantee future results.
ETFs and index funds are both types of index trackers. They are both excellent ways to diversify your investments around the world at surprisingly low costs.
We’re equally happy using ETFs or index funds. We include both in our best global tracker funds table below.
The only time the fund type is a deal breaker is when:
- You may want your tracker to be covered under the FSCS compensation scheme. If so, check out this list of UK-domiciled index funds including global options.
- Your stockbroker charges ETF dealing fees which cost more than 1% of your typical transaction price.
- The same broker enables you to trade index funds for free.
In the latter case, we would invest in a global index fund rather than a global ETF. This is because the impact of high dealing fees is surprisingly detrimental in the long run.
See our cheap broker comparison table for more details. Percentage-fee brokers often allow you to trade global index funds for nothing.
Some brokers even enable you to trade global equity ETFs for £0. Check out InvestEngine, FreeTrade, Vanguard, Doddle, Prosper and Lightyear for that option.
Best Global Tracker Funds – Comparison
Source: Morningstar and fund provider data
There is little to choose between these five global equity trackers:
- SPDR’s All Country World Index Tracker is the cheapest. That’s why it tops the table.
- SPDR and iShares ETFs follow the MSCI index while others follow the FTSE index. The indices vary somewhat in composition by country but have performed similarly over the past decade.
- Vanguard’s Global All Cap Index Fund has approximately 6% small cap exposure. That’s why it’s more diverse than the rest.
The reality is that these shades of gray haven’t made much of a difference to long-term outcomes. More on that in a moment.
Ch-ch-change…
There are two relatively new entrants to keep an eye on in the global tracker fund market. They cost less but have not yet had time to build a track record:
- Amundi Prime All Country World ETF – OCF 0.07% (The cheapest global tracker fund available.)
- Invesco FTSE All World ETF – OCF 0.15%
I’ll also throw two other options into the pot because they do something different:
Vanguard’s LifeStrategy fund includes a UK equity bias of approximately 20%. This is compared to the 3% UK allocation for real global index trackers in the table. If you can choose LifeStrategy 100 home bias Suitable for your situation. If you want an all-in-one fund that includes government bonds then choose LifeStrategy 20-80.
(Vanguard has also recently launched the ‘LifeStrategy Global’ range. These funds are similar deals to the regular LifeStrategy range, except with a home bias.)
Fidelity funds are actively managed. This includes a REIT exposure of about 10% and a small cap allocation.
Both are fund-of-funds. They manage their asset allocation by holding other index trackers rather than trading shares of listed firms.
Here’s a useful excerpt on how to compare index trackers.
Best Global Tracker Funds – Check Results
Source: TrustNet’s Multi-Plot charting tools
I’m most interested in the 10-year annual (nominal) returns for the global tracker selection above because this is the longest comparison period we have for most of the funds in the mix.
I have highlighted in magenta the 10-year returns of the MSCI ACWI and FTSE All-World indices. A well-functioning passive fund should perform in line with its benchmark – which is what it selects.
In fact, most trackers should do this interval Their index because the fund pays fees. The index does not bear that cost. (Surprisingly, only the iShares ETF is currently lagging its index. While three of the top four were lagging as recently as February 2026.)
In any event, there is no need to pay attention to the performance difference which is within a few tenths of a percentage point.
A tracker may gain a small lead for a period of time, but this is usually temporary. For example, the HSBC All-World Fund was a big hit over the past few years. But only last month, others have attacked this fund.
Therefore it is not appropriate to pay attention to any minor differences. They can be quickly reversed by short-term market moves.
stress free investing
If you’re starting from scratch, by all means choose the leading fund of the moment.
But there is no need to rule out the other top five funds because of the results in the table.
Index trackers are typically cookie-cutter products. Most of the results show our top five, all work fine. They are practically interchangeable.
The fact is that we’re not checking performance to crown the one, true, best global tracker fund.
With me-too products, you don’t need to over-customize. Any candidate from the field of contemporary competitors would probably be good enough.
Our performance checking just makes sure that nothing on our shortlist is broken, or not working as we think.
world of difference
There are some other things to note here.
fund size – All five index trackers in our top table have hundreds of crores in assets under management (AUM). Efficiencies of scale are typically above £100 million. Beyond that limit, size isn’t a big deal. The iShares ETF is three times the size of the SPDR ETF, but has consistently performed well over ten years.
fixed income – The trackers in our table are purely equity funds. It is important to own additional high-quality government bonds to avoid panicking during stock market declines.
Check out our best bond fund options to find a fixed income Venus for your equity Mars.
Understanding how to build your asset allocation will help you figure out how much you need to invest in such diverse defensive assets.
Income vs Accumulation – Except for the iShares and SPDR ETFs, all of our best global index tracker picks come in both Inc. and ACC flavors. They are available only as cumulative funds.
World And world east britain – I excluded these trackers because it doesn’t make sense to only include the developed world or exclude the UK when you’re trying to diversify across the globe.
Kiss
The beauty of the single global equity tracker strategy is its simplicity.
Yes, you can reduce costs a bit by creating a similar portfolio from different regional trackers.
But is it worth it to Agro in terms of time and transaction fees? And can you trust yourself to stick to the decisions of the global market? Or would you justify cuts in Japan or the US or anywhere because you can clearly see a bubble that everyone else hasn’t seen?
Fill your shoes if you need control psychologically. But know that you don’t have to do this.
No one can predict which strategy will win over your lifetime investment. But putting a global tracker fund at the core of your asset allocation is a rational choice in an increasingly crazy world.
keep it steady,
accumulator
