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Fund manager Vanguard’s index funds are passively-managed funds that track particular benchmarks or indices, such as the FTSE 100 or the S&P 500 in the US.
Vanguard is one of the world’s largest fund managers and offers a wide range of index funds, in addition to actively-managed funds and the LifeStrategy and Target Retirement ‘funds of funds’.
‘Passive’ funds use computer-based algorithms to select their holdings in order to match their target index. ‘Active’ funds have holdings selected by a manager whose task is to deliver index-beating returns.
Vanguard brought the first ever index fund to the market in 1975. And, nearly 50 years later, index funds continue to grow in popularity with investors, bucking the outflow in active funds to attract a net inflow of £600 billion in 2022, according to Morningstar.
To help investors navigate the range of Vanguard index funds, we asked Dzmitry Lipski, head of fund research at interactive investor, which funds are worthy of consideration and why.
Mr Lipski’s choices are set out below (in alphabetical order), along with the methodology behind his selection. We also take a broader look at investing in index funds.
